Ted Sarandos, co-CEO of Netflix, has admitted that the streaming giant is not growing as fast as he wants it to. Speaking at Bloomberg’s 2026 Screentime event, Sarandos said that Netflix viewership grew just 2 percent over the first half of 2026.
“I think the plan was solid,” he said. “We won the deal at some point, so we think we priced it right — at our scale.”
Growth Gap Acknowledged
Sarandos opened his remarks by acknowledging the slowdown directly. He framed it as a work-in-progress rather than a crisis, but the numbers are not flattering. A 2 percent gain over six months is a crawl, not a sprint, and the company’s own co-CEO is saying it out loud.
He added that the company is working on accelerating that pace. The admission itself is notable. Most executives talk about growth in past tense; Sarandos is talking about growth in present tense, with an explicit target of moving faster.
Live Sports as a Hook
One of the tools Netflix is deploying is live sports. The company recently moved into live programming, including a few high-profile NFL games. Sarandos said that live programming accounts for about 5 percent of Netflix’s $20 billion annual content investment, yet it generates only about 1 percent of viewership.
That is not a strong return on investment. But the metric Sarandos emphasized is not viewership. It is signups.
Live programming works as a hook, not as a main course. People join to watch a game, and some stick around afterward. The advertisers pay for the airtime. The content cost is real. The payoff is smaller than hoped.
Warner Bros. Bid Defense
Sarandos was asked about the recent Paramount Skydance and Warner Bros. Discovery merger, which carries a price tag of $111 billion. The question was direct: does he regret Netflix’s winning bid for Warner Bros. — the one that did not include the Discovery piece?
“Nahhh,” he responded, basically. He then defended the deal’s economics.
“I think the plan was solid,” he said. “We won the deal at some point, so we think we priced it right — at our scale. That was the top price point where I thought we could return value to our shareholders with that asset. Any more than that, I thought we’d be taking it into negative territory — even with our scale.”
The key phrase is “at our scale.” Sarandos argued that Netflix paid the maximum price it could justify, and that the asset would deliver returns at that level. Pay more, he implied, and the deal becomes a loss.
Netflix had an agreement in place before David Ellison combined Paramount Global and Skydance. The merger was finally given the go-ahead by a judge earlier today.
The Merger Math
Sarandos offered a blunt assessment of the market-share arithmetic. The merger combines two major studios into one massive entity, but Sarandos is not sure what the result will look like.
“It looks on paper— so far it’s one and one,” he said, speaking on the subject of streaming-market share. “So I don’t know if one and one is two, or one and one is one and a half, or one and one is three.”
That is a remarkable admission from a co-CEO. The streaming wars were supposed to be settled by now. A single, $111 billion entity should reshape the field. Sarandos is saying he does not know how it will play out.
YouTube Creator Deals
There was a time when Netflix was racing to become Warner Bros.’ HBO before HBO became Netflix, as Sarandos famously said in 2012 when he served as the streaming company’s chief content officer. Today, it appears Netflix has YouTube in its crosshairs in a similar manner — but Sarandos insists the recent deals with YouTube creators do not define a significant change in strategy.
“We’re definitely… not in the UGC [user-generated content] business,” he told Bloomberg’s Lucas Shaw. “We’re in the professionally produced content business. Now, I think there’s a bunch of people on platforms that are doing pretty close to professional programming already, and if we can better monetize that programming for them, then we can make a deal with them. But we’re definitely not trying to bring over the whole population of creators.”
The distinction matters. UGC is user-generated content — amateur posts, personal videos, community uploads. Netflix is not building that kind of platform. Instead, it is looking at people who are already producing at near-professional levels and offering them a better way to earn from their work.
Netflix can offer better monetization in part due to the fact that it has multiple revenue streams it can split, whereas YouTube is almost entirely advertiser-funded.
No Free Tier
Netflix is playing more and more in YouTube’s creator pool, but Sarandos said the company will not be offering a free tier — a completely ad-supported model — anytime soon.
“No version of FAST [free, ad-supported television] would be worth ‘cannibalizing the core product,'” he explained.
That is a significant position. The FAST model works for some companies; Netflix is not one of them.
Sarandos’s reasoning is that cannibalizing the core product is not worth it. The FAST model works for some companies; Netflix is not one of them.
What This Means
Sarandos is not panicking. He is not predicting a collapse. He is simply stating that the current pace of growth is slower than he wants, and that the competition is getting stronger.
The $111 billion merger changes the landscape. One and one could add up to two, or to three, or to one and a half. Nobody knows. Sarandos certainly does not know.
His confidence in the Warner Bros. deal is real. He believes Netflix priced it correctly. He believes the asset will deliver returns. But he also knows that the market is changing around him, and he is not sure how.
The live programming push is a stopgap. It brings signups and reduces churn. It does not move the needle on overall viewership. Netflix is spending 5 percent of its budget on live content that delivers 1 percent of its audience.
That is not a failure. It is a hedge. The company is buying attention where it can, hoping that attention converts into subscriptions.
The YouTube strategy is similarly cautious. Netflix is not entering the UGC business. It is not trying to become YouTube. It is looking at professional creators who sit outside the traditional studio system and offering them a better deal.
That is a sensible approach. YouTube’s creator economy is enormous, and Netflix can offer a different set of revenue streams. The company is not trying to replace YouTube. It is trying to capture a slice of the creators who are already producing at a high level.
The free-tier decision is the boldest statement. FAST is the model that has reshaped television. Streaming services now offer versions with ads, and the ads fund the entire operation. Netflix is opting out of that path.
Sarandos believes the core product is worth protecting, even if it means missing out on the ad-supported wave.
Key Numbers
- Netflix viewership grew 2 percent over the first half of 2026
- Live programming accounts for about 5 percent of Netflix’s $20 billion annual content investment
- Live programming generates about 1 percent of viewership
- The Paramount Skydance and Warner Bros. Discovery merger is valued at $111 billion
- Sarandos won the bid for Warner Bros., excluding the Discovery piece
| Event | Date |
|---|---|
| Netflix viewership grew 2 percent over first half of 2026 | First half of 2026 |
| Sarandos spoke at Bloomberg’s 2026 Screentime event | Wednesday |
| Paramount Skydance and Warner Bros. Discovery merger approved by judge | Earlier today |
Sarandos is not hiding behind platitudes. He is admitting the slow growth and explaining why the company is betting on live sports, professional creators, and a protected subscription model. Those are three very different strategies, and they are all being pursued at once.
The merger is the biggest unknown. Sarandos does not know how it will play out. That is a rare moment of humility from a co-CEO of a global entertainment company.
The question is whether the combination of live sports, creator partnerships, and a protected subscription model can accelerate the growth that Sarandos admits is currently lagging. Until then, Netflix is betting on attention, creators, and a core product it is not willing to cannibalize.
Source material: “Ted Sarandos Admits Netflix Is “Not Growing as Fast as I Want Us To”,” The Hollywood Reporter.
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