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Speaking on Bloomberg’s Screentime after a federal judge approved the settlement that cleared Paramount’s acquisition of Warner Bros. Discovery, Netflix co‑CEO Ted Sarandos defended the company’s strategy and its brief pursuit of Warner Bros. He said the move was measured and framed it as a decision made for long‑term shareholder value, not a mistake prompted by pressure from Wall Street.
Why Netflix went after Warner Bros. — and why Sarandos stands by it
Sarandos said Netflix’s approach to the Warner Bros. opportunity “was solid,” arguing the company had bid at the highest price it estimated could still deliver returns at scale. “Any more than that, I thought we’d be taking it into negative territory,” he told Bloomberg.
The episode interrupted the industry narrative, he added, creating extra scrutiny from investors and the press. Still, Sarandos defended the trade‑off: companies sometimes must risk a short‑term business story to secure a long‑term asset that can return value to shareholders.
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Engagement reporting and growth headwinds
Netflix stopped reporting subscriber growth nearly two years ago and shifted to publishing periodic viewership reports — until now twice a year and slated to move to once a year. Sarandos said the company has been “unsophisticated” in explaining what it meant by focusing on engagement, because “not all engagement is equal.”
He pointed to the most recent figures: Netflix is growing engagement on a huge baseline — about 200 billion hours of viewing — and reported a 2% increase in the last announcement. Still, Sarandos conceded the company is not expanding engagement as fast as he would like and cited factors such as the World Cup as headwinds during the reporting period.
Live events as a growth lever
To boost meaningful viewing time, Sarandos said Netflix plans to expand live programming. He noted that live events represent roughly 5% of Netflix’s content spend but account for about 1% of total watching. The key, he argued, is the quality of the engagement: some hours of viewing are far more valuable commercially than others.
He used the contrast of daytime syndicated TV versus major sports as a shorthand — not all watching carries the same revenue potential — and emphasized the business remains healthy, pointing to “double‑digit revenue growth in every region” in the last quarter.
How the combined HBO Max/Paramount+ unit shapes the competitive landscape
Asked about the potential threat from a merged HBO Max and Paramount+ following Paramount Skydance’s acquisition of WBD, Sarandos was deliberately vague. “On paper so far, it’s one and one,” he said. “I don’t know if one and one is two, or one and one is one and a half, or one and one is three.”
The combined service will be overseen by Casey Bloys, head of HBO and HBO Max content. Sarandos acknowledged a widely publicized lunch the two had after Netflix lost out to Paramount and said only that Bloys is “a super talented guy” who will be well positioned wherever he lands.
Overall deals and recent talent departures
Netflix has seen a string of high‑profile creators sign elsewhere: the Duffer Brothers moved to Paramount, Shawn Levy took an overall deal at Disney’s 20th Television, Noah Baumbach signed with Warner Bros., and David Fincher has ended his overall pact with Netflix. At the same time, Netflix has added or renewed major contracts, including an overall deal with Ryan Coogler and an extension with Shonda Rhimes.
Sarandos characterized these shifts as individualized decisions rather than evidence of a new company policy. He described overall deals as flexible tools that serve different purposes — organizing long runs of work, or accommodating creators who need time to develop ambitious projects.
The context behind specific exits
On the Duffer Brothers, Sarandos said they had a longstanding relationship with Netflix but wanted to pursue big theatrical films. He encouraged them to follow that ambition rather than regret it later, and said the creators will remain part of the Stranger Things universe.
Regarding Shawn Levy, Sarandos noted the director’s commitments — including upcoming Star Wars work — made a Disney overall deal a logical fit. He added Netflix will continue to collaborate with Levy on projects already in development.
About David Fincher, Sarandos reminded listeners that Fincher has worked with Netflix since 2011 and has largely done projects for the streamer since 2014. He described Fincher as “one of the greatest living directors” and said Netflix expects to remain in business with him for years to come.
