Netflix Growth Slows as Ted Sarandos Expands Live Programming and Theatrical Releases
Netflix’s challenge is converting strong revenue growth into faster audience engagement. Co-CEO Ted Sarandos said the company isn’t growing as quickly as he wants, even as revenue increased at double-digit rates in every region during its latest reported period. Global engagement rose 2%.
“Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,” Sarandos said at a Bloomberg conference in Los Angeles. He also said Netflix is pursuing initiatives that create “a lot of headwind to that number.” The company was valued at $281 billion in the cited market capitalization data and remains the world’s largest streaming service, according to Forbes.
Live content has a retention and advertising role
Netflix is putting more emphasis on live programming as it looks for ways to draw in subscribers and give current customers reasons to stay. Sports, wrestling, comedy and major cultural events are expanding the company’s offer beyond scripted films and television.
Sarandos said roughly 5% of Netflix’s annual content budget, or about $1 billion of an approximately $20 billion total, goes to live programming. Live shows make up around 1% of viewing, so their value isn’t primarily measured by hours watched. Sarandos described them as a way to attract subscribers, support retention and provide more valuable advertising inventory.
Here’s the business case: a live event can give viewers a reason to open Netflix at a particular moment, rather than treating it as a library they visit only when a new series or film catches their attention. If that draws in new members or reduces cancellations, a small share of viewing could still serve a larger commercial purpose. The results will depend on whether those events consistently reach audiences and contribute to subscriber and advertising growth.
Theatrical releases broaden the distribution strategy
Netflix is also planning longer cinema windows for selected films. Sarandos said Greta Gerwig’s Narnia: The Magician’s Nephew will have a wide theatrical release in 2027 before arriving on the platform. The animated Charlie and the Chocolate Factory is also due in theaters later that year.
Deadline reported planned exclusive theatrical runs of 50 days for Narnia and 47 days for Charlie. Those windows mark a more substantial cinema presence for Netflix originals than the limited runs often associated with the service. The company has said it chooses theatrical plans according to each film, including the city, marketing budget and number of days in theaters. Sarandos said Netflix released more than 30 films theatrically last year.
The sequel to KPop Demon Hunters is expected to receive a broader rollout. Sarandos told Deadline audiences should expect a “very broad” debut, describing it as a “big, broad, global” release. He has also characterized the original as a four-quadrant film, with appeal across children, parents, younger adults and older viewers.
That approach gives Netflix more ways to build audiences around titles before they reach the service. The commercial test is whether theatrical exposure adds enough reach and value to justify the longer delay before streaming availability.
AI investment targets production work
Netflix is also applying AI tools to film and television production, with a focus on making workflows faster and less costly. In March, the company acquired InterPositive, the filmmaking technology firm founded by Ben Affleck, for $587 million.
The technology is aimed mainly at post-production tasks such as color adjustments, visual effects and reframing shots. It isn’t designed to generate a complete film from scratch. On Netflix’s second-quarter earnings call in July, Sarandos said the company had used AI on about 300 titles for planning and visual effects.
These initiatives address different parts of the growth challenge: live programming may strengthen engagement and advertising, theatrical runs may widen a film’s audience, and AI may affect production costs and workflows. Netflix’s next measure of progress will be whether these efforts translate into stronger engagement while revenue growth continues.