Netflix is scrutinizing whether live programming can accelerate subscriber growth and retention as its overall expansion slows. Co-CEO Ted Sarandos said the company spends about 5% of its $20 billion annual content budget on live programming, which accounts for about 1% of total viewing. He argued that the format’s value extends beyond viewing share because live events generate signups and help reduce subscriber churn, the rate at which customers cancel. The comments come amid concerns about engagement and competition from YouTube. HSBC downgraded Netflix shares to Hold from Buy, and Wells Fargo cut its rating to Underweight, while Deutsche Bank upgraded the stock to Buy after second-quarter results. Sarandos said Netflix remains healthy despite his dissatisfaction with the pace of growth. The key test is whether live programming can generate enough additional subscriptions and lower churn to justify a larger share of the content budget. The article first appeared on GuruFocus, which also displayed six warning signs for TSLA and promoted a free discounted cash flow calculator for testing an NFLX valuation thesis.