Netflix (NASDAQ:NFLX) said its core strategy remains centered on exclusive original programming, global distribution, product discovery and monetization, while live events, licensed content and selected partnerships are intended to broaden the service rather than replace its main growth engine.
During the company’s third-quarter 2026 earnings interview, co-CEO Ted Sarandos said roughly 95% of Netflix’s spending and nearly all of its revenue remain focused on its core entertainment offering. He described live programming, third-party content and other newer initiatives as tightly managed expansions of that strategy.
“We want to be the must-have entertainment service, the first one members check for a great series or a great film, and the last service they would ever cancel,” Sarandos said.
Live Events and Content Partnerships
Sarandos said live events such as the Canelo-Crawford fight, NFL programming and MLB-related events can stand out in an increasingly crowded entertainment market. He said such programming can attract members, support advertising revenue and add value for existing subscribers.
The company is also continuing to supplement its originals with licensed programming. Sarandos cited recent agreements involving Sony, Disney, Universal and other suppliers, as well as a partnership with French broadcaster TF1 that brings a full network offering onto Netflix in France.
Co-CEO Greg Peters said Netflix is pleased with the early results from the TF1 integration, which he said has added local French programming while keeping the TF1 experience distinct within the Netflix service. Viewing of TF1 programming on Netflix has increased each month, Peters said, and early testing indicates that TF1 engagement is incremental to the platform.
Netflix could pursue similar arrangements where they fit the needs of both parties, Peters said, though he added that the company has “nothing to announce today” regarding potential add-on subscription services or other integrations.
On licensing, Sarandos reiterated that original and exclusive programming remains the anchor of Netflix’s offering. But he said the company sees value in second-run titles that complement its originals. He pointed to the recent Disney agreement, which brought the Ice Age films and other Disney programming to Netflix. All five Ice Age films reached Netflix’s top 10 after arriving on the service, he said.
Sarandos also highlighted a new content licensing agreement with Globo in Brazil, which he called Netflix’s largest agreement with the Brazilian company. The agreement includes programming such as the Oscar-winning film I’m Still Here and the International Emmy-winning telenovela India – A Love Story.
Engagement, U.S. Execution and Leadership Changes
Peters said global engagement remains healthy and pointed to retention and churn as the clearest measures of the value Netflix delivers. Third-quarter churn improved year over year both globally and in the United States, he said, and was better than the company forecast. Recent price changes, including in the U.S., have performed in line with Netflix’s past pricing actions and expectations, according to Peters.
Netflix reported particular strength in the Asia-Pacific, Latin America and Europe, the Middle East and Africa, where local titles are contributing to engagement and business growth. In India, Peters said third-quarter viewing hours rose 24% on an absolute basis, while revenue increased nearly 20% year over year.
While U.S. engagement remains solid, Sarandos said the company believes its domestic content performance can improve. Netflix has named Peter Rice as chief content officer following the departure of Bela Bajaria, whom Sarandos credited with helping build Netflix’s international content organization and expanding its programming into new categories.
Sarandos said Rice’s experience spanning television networks, studios, streaming, film and live sports could help Netflix improve execution, particularly in the U.S. Netflix is not planning a fundamental change in content strategy, he said, but wants more U.S. titles that can become global “home runs.”
The company highlighted a forthcoming slate including additional seasons of The Diplomat, Emily in Paris, Bridgerton and Wednesday, as well as the film The Further Mis-Adventures of Cliff Booth. Looking ahead to 2027, executives cited projects including Narnia, Charlie and the Chocolate Factory, Here Comes the Flood and Grown Ups 3, along with NFL games and the Women’s World Cup in the U.S. and Canada.
Theatrical Releases and Workforce Changes
Sarandos said Netflix remains a streaming-first company but is expanding theatrical releases selectively based on the individual film, audience and filmmaker. The company expects to release about 30 films theatrically this year, similar to last year’s level.
Its approach now includes different release patterns for specialty films and larger family titles. Sarandos said Netflix is using a 47-day theatrical window for the Spanish-language film La Bola Negra, while The Further Mis-Adventures of Cliff Booth will receive an IMAX release four weeks before its Netflix debut. The company has also announced 45-day windows and wide theatrical releases for Narnia: The Magician’s Nephew and Charlie vs. the Chocolate Factory.
Netflix has begun publicly reporting box-office grosses for its theatrical titles. Sarandos said La Bola Negra opened with more than $69,000 per-screen, which he said was the second-highest per-screen average ever for a non-English-language film in the U.S., behind Parasite.
Separately, Peters addressed recent headcount reductions, describing them as part of an effort to maintain discipline in allocating resources. He said rapid growth and changing market conditions can leave companies overinvested in some areas or create opportunities to alter operating structures.
“We do not take these decisions lightly,” Peters said, adding that Netflix believes it must make trade-offs in support of members, partners, employees, investors and long-term growth.
Advertising and 2027 Growth Goals
CFO Spence Neumann said Netflix expects member growth, pricing and advertising to remain its three primary revenue drivers. While the company is not yet providing full-year 2027 guidance, Neumann said Netflix’s financial objectives are unchanged: sustain double-digit revenue growth, expand margins and increase free cash flow.
Netflix’s advertising business is expected to grow more than 80% in 2026, Peters said, though the company is currently behind its own aggressive target for the year. He attributed the shortfall to delays in rolling out some advertising products and partner integrations.
Peters said Netflix considers the near-term setback acceptable if it produces a stronger long-term position. The company continues to prioritize new advertising formats, full-funnel optimization, measurement tools and reporting capabilities. Demand for inventory remains strong, he said, and the range of advertisers using the platform is expanding.
Netflix plans to expand its ad tier into 15 additional countries next year. Peters said average revenue per membership for the ad tier remains below the standard non-ad tier, but the gap is narrowing as the company improves advertising technology, expands demand sources and increases ad-plan membership.
In mature markets such as the U.S., U.K. and Australia, Netflix expects pricing and advertising to account for a larger share of future growth. In less-penetrated markets including India, Indonesia and Colombia, member growth is expected to be the more significant revenue driver, Peters said.
About Netflix (NASDAQ:NFLX)
Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.
The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.
