Netflix admits US content needs a hit-making upgrade

Netflix has acknowledged that its content slate in the US, one of its most established markets, is not delivering the growth it believes it can, even as local programming in India, South Korea and Japan helps drive engagement and business growth across Asia Pacific.

“We do need better execution in the U.S.,” co-CEO Ted Sarandos said during the company’s third quarter earnings call on October 20. “The U.S. is also working. It’s just not growing as fast as it could or as fast as we’d like.”

The admission points to a key challenge for the streaming company as it looks to sustain growth - producing more shows and films that breakthrough in the US and travel beyond their home market. Netflix said its content strategy remains unchanged, but it sees scope to improve the performance of its American slate and turn more releases into global hits.

Sarandos said Netflix had delivered “some really solid doubles and triples” in the US this year, but wanted more titles that could become “home runs” for audiences around the world. The distinction matters for a platform whose model depends on attracting and retaining members through a steady pipeline of exclusive entertainment, while making successful content available to a global audience.

Netflix is looking to Peter Rice, its incoming chief content officer, to help take the slate to the next level. Rice has experience across television networks, movie studios and streaming services. Sarandos described his combination of creative instincts and commercial understanding as particularly valuable, but also highlighted his ability to build relationships with talent.

In a competitive entertainment market, creators have multiple platforms on which to work, Sarandos said. Netflix wants to remain the place where they can do their best work. Rice is expected to help strengthen those relationships and improve execution in the US and internationally.

Sarandos also credited outgoing content chief Bela Bajaria with helping build Netflix’s international content operation, which has become a competitive advantage over the past decade. The company’s next task is to build on that foundation rather than overhaul its strategy.

“There is no need for a fundamental shift in the strategy,” Sarandos said. “We see titles across Latin America, EMEA, APAC, driving engagement, subscriber growth, revenue and profit.”

India shows what the content strategy can deliver

Netflix pointed to India as an example of how a strong local slate can translate into business results. Viewing hours in the country rose 24% in absolute terms in the third quarter, while viewing hours per member also increased. The company said this helped drive nearly 20% year on year revenue growth in India.

South Korea and Japan are also contributing to engagement through local titles, while the Nordic countries have emerged as an example of a mature market where a focused content slate is delivering results. These markets underline Netflix’s approach of developing programming for local audiences while seeking shows with the potential to travel internationally.

The US, meanwhile, remains a source of growth, but Netflix believes its performance can improve. Co-CEO Greg Peters said engagement in the country remained solid and should allow the business to continue growing. The opportunity, he said, was to move “from very good to great” in the performance of the slate.

Netflix has a substantial line-up to support that ambition. Its fourth-quarter releases include East of Eden, the fourth season of The Diplomat, the final season of Emily in Paris and a film featuring Brad Pitt directed by David Fincher and written by Quentin Tarantino. The company also plans to stream NFL games on Christmas Day and introduce a Thanksgiving Eve game.

Its 2027 slate includes Narnia, Charlie and the Chocolate Factory, the fifth season of Bridgerton and the third season of Wednesday, alongside further films and series. These releases give Netflix several opportunities to generate the kind of broad audience interest it says it wants more consistently.

Peters said retention remained healthy, with third-quarter churn improving year on year both globally and in the US. Recent price increases in the US had also performed in line with expectations, suggesting the company continues to deliver value to existing members.

The immediate challenge, therefore, is not to replace Netflix’s content strategy but to improve the results it produces in the US. With international programming already contributing to engagement and revenue, the company is looking for more American titles that can capture attention at home and become global talking points.