Netflix Inc (NASDAQ: NFLX) co-CEO Ted Sarandos acknowledged that the streaming giant is not growing as fast as desired, stating the company is working to accelerate this move. The comments come as Netflix prepares to report third-quarter results next month, following mixed second-quarter performance where revenue missed analyst estimates while earnings per share beat expectations.

Sarandos spoke at Bloomberg’s 2026 Screentime event, highlighting that overall viewership rose only 2% year-over-year in the first half of 2026. He emphasized that live sports and content are central to the growth strategy and are currently generating "a lot of signups," reducing subscriber churn and aiding advertising revenue. "Overall, we're not growing as fast as I want us to, and we're working on making that move faster," Sarandos said.

Live content economics

Netflix allocates approximately 5% of its annual $20 billion content investment toward live programming. Despite this significant financial commitment, live content currently contributes only around 1% of total viewership. However, Sarandos noted that this segment is critical for expanding the overall subscriber base, suggesting a strategic trade-off between immediate viewership share and long-term user acquisition.

Warner Bros. Discovery bid strategy

Sarandos also addressed the decision not to pursue a higher bid for Warner Bros. Discovery (NASDAQ: WBD), which was ultimately acquired by Paramount Skydance (NASDAQ: PSKY). He stated there were no regrets regarding the pricing strategy, noting that a higher bid might have pushed returns into "negative territory."

"We won the deal at some point, so we think we priced it right — at our scale," Sarandos said. "That was the top price point where I thought we could return value to our shareholders." He added that the potential streaming threat posed by the Paramount-WBD combination remains unclear, describing it on paper as "one and one."

What the numbers show

The data reveals a divergence between capital allocation and immediate viewership impact. While live programming consumes 5% of the $20 billion content budget, it accounts for only 1% of viewership. This indicates that Netflix is prioritizing strategic subscriber acquisition and churn reduction over immediate audience share gains from live events. The modest 2% year-over-year viewership growth in H1 2026 underscores the pressure on the core business to deliver faster expansion, aligning with Sarandos’ admission that current growth rates are inadequate.

Pershing Square Capital Management holds a $934 million stake in Netflix Inc (NASDAQ: NFLX) as of the end of the second quarter, marking a significant re-entry into the streaming giant. The position comprises 13,081,465 shares, representing approximately 4.8% of the hedge fund's total assets.

Strategic rationale for re-entry

Bill Ackman, founder of Pershing Square, cited Netflix's "dominant position" and enhanced cash flow generation as primary drivers for the investment. The firm had previously exited its Netflix position in 2022 due to concerns over the company's expansion into the unproven advertising business.

Since that exit, Ackman noted that Netflix has successfully built a robust advertising segment and won the "streaming wars." He emphasized that the company is now significantly more cash flow generative than it was during the initial holding period.

"At a price that made sense, we bought it back," Ackman stated on The Knowledge Podcast. He added that Netflix remains incredibly well positioned to innovate and serves as the standard for the streaming industry.

Market timing and valuation context

The re-entry follows a period of volatility for Netflix shares. After soaring from 2022 to 2025, the stock began declining in late 2025 and continued to fall into early 2026. Ackman indicated that this downward trend provided an attractive entry point for Pershing Square.

Position details

What the numbers show

The data reveals a strategic shift in Pershing Square's approach to Netflix. While the firm exited in 2022 due to uncertainty around the advertising business, the current position suggests confidence in that same segment's maturity. The $934 million allocation, constituting nearly 5% of the portfolio, indicates high conviction despite the stock's recent decline from its 2025 highs. This move contrasts with the earlier short-term hold, suggesting Ackman now views the advertising revenue stream as a stable contributor to cash flow rather than a speculative risk.