From Streaming Disruptor to TV Playbook: Is Netflix rethinking content?

Two decades ago, Netflix changed television by freeing viewers from scheduled programming and building a global business around original stories that could travel across languages and markets. But as streaming matures, its central challenge is no longer simply attracting audiences. It is converting content expenditure and viewing into sustained engagement and commercially durable returns.

The appointment of Peter Rice, former chairman of Disney Television Studios and ABC, as Netflix’s Chief Content Officer brings that tension into focus. Rice takes charge on October 26, succeeding Bela Bajaria, who is leaving after nearly a decade at the company. Co-CEO Ted Sarandos has described Rice as an operator who can work “at-scale”, highlighting his experience in building and managing large entertainment businesses.

The appointment follows Netflix’s decision to cut about 1,000 jobs, nearly 6 percent of its workforce and the departure of film division head Dan Lin. The staff reductions are being viewed as part of a restructuring plan to invest more in live sports and advertising.

Rice also will oversee the film division until a replacement for Lin is chosen. "Peter Rice understands talent relations, and in a competitive market, creative talent have choices of where they want to work," Sarandos said on Tuesday, during an earnings call. "We want Netflix to always be the place that they love to do the best work of their life."

The financial backdrop adds to the scrutiny. Netflix shares have fallen 26% in 2026, while September alone saw a 14% decline. Slowing engagement growth, expensive content and a crowded entertainment market have all figured in concerns about the company’s performance. 

Its third-quarter profit rose 44% year-on-year, while revenue grew 11.8%—its slowest pace in three years, but a weaker-than-expected fourth-quarter outlook and a cut in its 2026 ad revenue forecast to $2.7 billion from $3 billion triggered a fresh sell-off amid concerns over engagement growth, intensifying competition and the sustainability of its premium valuation. The company attributed the ad forecast revision to slower-than-expected rollouts of some advertising capabilities. 

Netflix also won its fewest Emmy Awards in a decade this year. Sarandos has acknowledged that the company is not growing fast enough. The concerns are not limited to awards or audience metrics. As Bloomberg quoted Ken Mahoney of Mahoney Asset Management saying: “The content’s getting very expensive, and there’s just still too many players. I think there’s so many better tech stories out there than Netflix that have sticky customers.”

Netflix has not publicly said Rice’s appointment signals a shift towards traditional television programming. But it raises a timely question: could television’s long-established disciplines of repeat viewing, returning formats and audience habit-building help streaming platforms extract more value from their content investments?

Importantly, Sarandos said on Tuesday the company plans to focus on its core business of producing quality TV shows and movies to make Netflix a must-have service, and the recent executive shakeup was a step toward that goal. In its earnings report, Netflix said it would continue to expand its offerings through licensing more third-party ‌content.

The return on content investment

The streaming giant reported $45.2 billion in revenue for 2025, while its year-end content obligations stood at approximately $24 billion. These obligations cover commitments related to production, licensing and acquisition; they are not equivalent to annual content expenditure, but illustrate the scale of its programming commitments, industry experts say. 

For Phil McKenzie, co-founder of Goldfinch and enGEN3, an entertainment and technology venture, the challenge is the relationship between spending and engagement. In a LinkedIn post, he wrote: “Netflix content strategy is failing because the business model underneath it has matured to the point where $20b a year in spend is producing just 2% engagement growth.”

McKenzie’s argument extends to how content is developed. Creator-led entertainment can test audience demand before substantial production budgets are committed. He points to Iron Lung, based on a game created by YouTuber Markiplier, and The Backrooms, which grew from online horror storytelling into a studio film. The lesson is not that creator-led projects invariably succeed, but that audience response can help reduce uncertainty before larger investments are made.

Patrik Wilkens, Principal and Founder of Mournival Consulting, approaches the problem through viewing and monetisation. Netflix members watched 97 billion hours of content in the first half of 2026, up 2%, while the company guided for 13–14% revenue growth for the full year, he notes. The contrast raises a question about how effectively viewing growth translates into revenue.

“A cultural moment gets you to the meeting. Hours per dollar closes it,” Wilkens writes. His argument is that live events can attract attention and sign-ups, a broader programming slate can sustain viewing, and advertising can monetise that attention. Each category of content, therefore, may need to be assessed against a different commercial objective.

Challenges 

A slate built entirely around established properties can become predictable; dependence on expensive event titles can leave gaps between major releases. The challenge is to balance distinctive originals with programming that gives viewers reasons to return.

Divya Dixit, CEO of RECZ, says commissioning decisions need to look beyond a successful launch. “What interests me about Peter Rice’s appointment is the experience he brings in building both distinctive content and a commercially sustainable slate. Netflix needs both,” she says.

“Having worked across television and OTT, I’ve seen how easily a successful launch gets mistaken for a successful content investment. A show can generate conversation, bring in subscribers and still leave the platform struggling a month later. What do those viewers watch next? Do they return? Do they renew? Those questions need to influence commissioning as much as opening-week numbers.”

Dixit sees a potential connection with television’s experience in building viewing habits. “Television has spent decades building that habit through familiar characters, continuing stories and a dependable programming rhythm. Rice brings experience of that discipline, alongside film and talent relationships. My reading is that Netflix wants more consistency from its enormous content investment.”

Advertising changes the equation

Netflix’s expanding advertising business adds another dimension to the content debate. At its May 2026 upfront presentation, the company said its ad-supported offering reached more than 250 million monthly active viewers globally. This is an estimated viewer metric, not a count of paying subscribers. Netflix also said more than 80% of its ad-supported members watched content each week.

Wilkens estimates that Netflix carries around four minutes of advertising per hour, compared with 15 minutes or more on linear television. That suggests potential to expand inventory, although it is his assessment of the opportunity, not a confirmed Netflix plan. More advertising can improve monetisation only if audiences keep watching and advertisers see value; an excessive load could undermine the viewing experience.

Live programming presents a different calculation. In Wilkens’s analysis, live events account for just over 5% of Netflix’s content spending but around 1% of viewing hours, while contributing to six of the platform’s ten biggest sign-up days. Their value, he argues, may lie in acquisition rather than total viewing hours. Series, films and the catalogue can then sustain engagement between major events.

For India, the economics are complicated by affordability and competition from free, advertising-funded video. Netflix Entertainment Services India LLP reported ₹3,769 crore in operating revenue in FY25, up 32% from ₹2,846 crore in FY24. The company does not disclose an official India subscriber count.

An Indian production-house founder sees potential in advertising. “ A market of 1.4 billion, which largely relies on cost-effective content on ad-supported platforms, has huge potential for Netflix, at least in the current economic scenario.”

Notably, the company had not launched its advertising-supported subscription tier in India at the time of the original reporting; its current status should be confirmed before publication. But the broader question is relevant: can a large audience be monetised more effectively without relying solely on subscription growth?

Pep Figueiredo, COO of PTPL India and a former SonyLIV executive, sees value in adapting established television formats for streaming. “Netflix’s willingness to experiment with established television formats has demonstrated the value of combining familiar viewing habits with a streaming-first approach,” he says. “Locally for us, The Great Indian Kapil Show illustrates how a television-led format can drive audience engagement and sustained watch time, reinforcing the strategic logic behind Peter Rice’s appointment as CCO.”

The example shows how a recognisable format can provide continuity in a crowded entertainment environment. The test is whether such formats consistently deliver engagement while remaining relevant to streaming audiences. 

“Netflix needs blockbuster movies and shows to reverse its $135 billion market value wipeout. Earlier this year, Netflix ⁠lost a bidding war for Warner Bros Discovery and its rich library of characters. It could go after other acquisition targets such as NBCUniversal after Comcast spins it off,” said an observer.