As Paramount-Warner Bros. merger nears, Ted Sarandos flags Netflix’s slow growth
As the Paramount-Warner Bros. merger resets the streaming stakes, Ted Sarandos works to steady nerves about Netflix’s growth — and his answer isn’t the one you’re expecting.
On stage at Bloomberg’s 2026 Screentime event, Ted Sarandos didn’t sugarcoat where Netflix stands: engagement grew just 2% in the first half of 2026. The candor landed the same day a judge cleared a $111 billion deal combining Paramount- Skydance with Warner Bros. Discovery, instantly creating a bigger rival in streaming.
“Overall, we’re not growing as fast as I want us to,” Sarandos said. “We’re working on making that move faster.”
Sarandos also pulled back the curtain on Netflix’s live push. He said live programming now takes about 5% of the company’s roughly $20 billion annual content spend, yet accounts for only about 1% of total viewing. Even so, he argued the format earns its place: live events spark signups, reduce cancellations, and draw advertiser interest.
Addressing dealmaking, Sarandos said he has no regrets about Netflix’s brief winning bid for Warner Bros., noting he priced the offer at the limit of what made sense for shareholders.
A chattier Netflix
As competitors bulk up, Netflix is testing a new way to help you decide what to watch: a conversational AI that lets you ask by mood instead of title. Ritwik Kumar, the company’s vice president of AI strategy and innovation, told Fortune that early pilots showed people had a lot to say to it.
Think, “Show me a light mystery,” or “I need an easy watch after a long day,” then narrowing the picks with a couple of quick follow-ups. Kumar said spoken requests give the system richer detail about a viewer’s mood and intent than a typical search box ever could.
The company is also experimenting with ads that match the tone of what you’re watching — even referencing what’s on pause, like Stranger Things — as it tries to make marketing feel less jarring and more relevant.
- 2% — Netflix engagement growth in H1 2026
- $20B — annual content spend; live is ~5% of that but ~1% of viewing
- $111B — value of the Paramount-Skydance and Warner Bros. Discovery merger cleared by a judge
- $587M — reported price for Netflix’s March purchase of Ben Affleck’s AI firm InterPositive
- ~300 titles — projects this year where creative partners used Netflix’s generative AI tools
Behind the scenes, Netflix has been buying and building AI tech. In March, it acquired Ben Affleck’s firm InterPositive for a reported $587 million. The company says creative partners leaned on generative tools across roughly 300 titles this year.
Even with those bets, Sarandos stressed that new tech alone won’t answer the broader question of why growth is slower than he wants — a task he says the company is actively working on.