Netflix says growth is slowing as AI, live shows drive spending

Netflix Co-Chief Executive Officer Ted Sarandos has said the streaming giant is not growing as quickly as expected, as the company increases spending on live programming, theatrical releases and artificial intelligence to drive engagement among its 325 million subscribers.

Sarandos disclosed this on Wednesday at the Bloomberg Screentime conference in Los Angeles, noting that Netflix is working to accelerate growth as engagement shows signs of slowing.

Netflix is expanding beyond its traditional film and television business as it looks for ways to increase the amount of time subscribers spend on the platform.

About 5% of Netflix’s $20 billion content budget, equivalent to roughly $1 billion, is being allocated to live programming.

Netflix engagement growth slows

• “Overall, we’re not growing as fast as I want us to, and we’re working on making that move faster,” Sarandos said.

Netflix recorded a 2% increase in engagement during its latest reporting period, despite revenue growing at a double-digit rate across every region.

• The slowdown comes as Netflix shares have declined about 24% this year, with the company forecasting slower revenue and profit growth amid higher spending on content.
• The streaming company has expanded into live sports and events, video podcasts and programming featuring prominent YouTube creators as competition for viewers and advertising revenue intensifies.

Netflix is also planning wider theatrical releases for some of its biggest films. Sarandos said Narnia is expected to receive a wide theatrical release next year, alongside Charlie and the Chocolate Factory later in the year. A sequel to KPop Demon Hunters is also expected to receive what he described as a “very broad release.”

Netflix released more than 30 movies in cinemas last year.

Netflix increases AI investment

Artificial intelligence is also becoming a larger part of Netflix’s production strategy.

The company acquired AI filmmaking technology firm InterPositive for $587 million in March, as it seeks to deploy generative AI across different stages of film and television production.

Sarandos previously disclosed that generative AI had been used on about 300 Netflix titles, primarily during post-production.

The technology is being deployed for pre-visualisation, visual effects and the creation of complex shots and sequences.

Netflix expects AI to help shorten production timelines and reduce costs while maintaining or improving the quality of its content.

Warner Bros. acquisition

Sarandos also addressed Netflix’s unsuccessful attempt to acquire Warner Bros. Discovery’s film and television studios and HBO Max.

• Netflix had initially agreed to acquire the assets in a transaction carrying an enterprise value of about $83 billion, but declined to increase its offer after Paramount Skydance submitted a higher bid.
• Sarandos said Netflix had reached the maximum price at which it believed the acquisition could generate returns for shareholders.

He added that Netflix is not currently searching for another acquisition to replace Warner Bros., with the company’s growth strategy expected to remain primarily organic.

Netflix shifts focus beyond subscribers

In January 2025, Nairametrics reported that Netflix crossed 300 million global subscribers, ending 2024 with 301.63 million subscribers after adding a record 18.91 million users in the fourth quarter. The company subsequently stopped reporting subscriber additions every quarter, shifting investor attention towards revenue, operating margins and engagement.

• By April 2025, Netflix reported $10.5 billion in first-quarter revenue, representing 13% year-on-year growth, supported by subscription price increases and strong content performance. Nairametrics reported at the time that Netflix was expanding its advertising-supported tier as it sought to generate more revenue from existing subscribers amid expectations of slower subscriber growth.

More recently, Nairametrics reported in June 2026 that Netflix was deploying generative AI to improve content discovery, including testing a voice interface that allows subscribers to describe what they want to watch. The initiative forms part of the company’s efforts to increase engagement as its content catalogue expands.