Netflix has 2 problems behind the stock slide — and they aren't YouTube, co-CEO Ted Sarandos says

Netflix ( NFLX ) is seeing its viewership come under increasing siege from the behemoth that is Alphabet's ( GOOG , GOOGL ) YouTube, but the two main issues it will have to confront as it seeks to arrest a major stock slide this year are more internal.

And they can't be fixed immediately by laying off 6% of the workforce and, surprisingly, by pushing out Bela Bajaria as chief content officer in favor of former Disney ( DIS ) exec Peter Rice, as seen this week.

In the end, a Netflix growth reboot will hinge on a steady pipeline of fresh creative talent and more content home runs.

"Most importantly, Rob, Peter Rice understands talent relations, and in a competitive market, creative talent have choices of where they want to work, and we want Netflix to always be the place that they love to do the best work of their life. Peter is the exact right person to lead those efforts in the U.S. and around the world," Netflix co-CEO Ted Sarandos said on the company's earnings call late Tuesday.

"The U.S. is also working," he continued. "It's just not growing as fast as it could or as fast as we'd like. We had some really solid doubles and triples this year. But the other territories count on some of those titles being home runs so that they'll travel around the world."

Netflix delivered a mixed third quarter earnings report amid those doubles and triples on the content front, with earnings of $0.87 per share, beating Wall Street estimates of $0.82.

Revenue of $12.87 billion came in line with analysts' expectations.

For the fourth quarter, Netflix forecast revenue of $13.44 billion, below expectations of $13.57 billion.

The company also cut its full-year advertising revenue outlook to about $2.7 billion from $3 billion previously.

Netflix stock fell 6% in premarket trading. The stock had been down 26% this year ahead of the earnings release.

"2026 has been more of a transitional year than we envisioned. While the latest Ads miss is frustrating, we find comfort in Membership retention that is still healthy and corrective actions within content that can drive a potential re-acceleration in 2027E and into 2028E (which we are not modeling today)," KeyBanc Justin Patterson said.

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