The news: Netflix co-CEO Ted Sarandos lamented the streaming service’s slow engagement growth on Wednesday at a Bloomberg conference and hinted at how the company plans to increase attention after its Warner Bros. Discovery acquisition bid fell apart.

Despite double-digit revenue growth, lagging engagement could limit Netflix’s ability to attract ad spending. Viewing hour growth was just 2% in Q2, and we forecast US adults will spend just 2 more minutes with Netflix this year than in 2025.

Additionally, Netflix’s penchant for canceling shows is taking a toll on repeat viewership: Bloomberg reported a drop of as much as 70% in viewership between the first and second seasons, though Netflix disputes the figures.

Where is Netflix going? Netflix is exploring multiple avenues in search of its next growth engine.

• Creator content: The streamer has acquired rights to many top video podcasts and content from YouTube creators in a bid to expand its offerings and tap into viewer interest—as well as to compete more directly with digital video leader YouTube.
• Live content: Netflix is pushing further into live sports this year with a focus on the NFL. It streamed the league’s first-ever game in Australia on September 10 and will air a Thanksgiving eve game on November 25. Its live content also includes daily broadcasts of “The Breakfast Club” podcast.
• Affordable options: With consumers tightening purse strings and cutting down on costlier streaming subscriptions, Netflix is reportedly exploring options for affordable bundle offerings.

Implications for marketers: Netflix’s status as the subscription video-on-demand leader makes it a valuable channel, but slow engagement growth means marketers may not increase their spending. The company is competing with YouTube, whose user-generated content help keep production costs low. New ad opportunities are emerging, but it will take some time before Netflix can tout proven results from its new ad inventory.