Netflix Is Still Growing. But African Content Is Entering a More Selective Era

Netflix is still growing.

In the second quarter of 2026, the streaming company generated $12.56 billion in revenue, up 13% from a year earlier, while operating income rose 11% to $4.19 billion. Its operating margin was 33.4%.

The problem is somewhere else.

Netflix members watched more than 97 billion hours in the first half of the year, but viewing increased by only 2% from the same period in 2025. That was only modestly faster than the 1.5% growth recorded in 2025.

That helps explain why Netflix is doing more than simply making more films and television shows.

It is investing in live programming, theatrical releases, advertising, video podcasts, games, artificial intelligence and other ways of keeping people on the platform.

For African producers, the important question is what this more disciplined Netflix means for the business of making and selling African stories.

Netflix needs more from the same audience

For years, Netflix’s expansion was relatively easy to understand: enter more markets, attract more subscribers and build enough content to keep them there.

That model is becoming less useful on its own.

Netflix stopped making quarterly subscriber additions its main reporting metric in 2025 and has increasingly focused investors on revenue, operating margin and engagement. Its latest results show why. Revenue can continue growing through price increases, membership growth and advertising even when viewing time grows much more slowly.

So Netflix is trying to make each relationship with its audience more valuable.

That means finding more reasons to open the app, more opportunities to show advertising and more ways to turn content into an ecosystem rather than a catalogue of films and series.

Live events are part of that strategy. So are video podcasts, creator-led programming and wider theatrical releases.

AI is another part.

Netflix said generative-AI workflows had been used on roughly 300 titles in 2026, with the largest concentration in post-production. The company says the technology is being used for tasks such as complex visual sequences, with the aim of producing work more quickly and efficiently.

In March, Netflix also acquired filmmaker Ben Affleck’s AI company InterPositive. A subsequent regulatory filing put the cash purchase price at approximately $587 million.

The message is straightforward: Netflix is looking for more efficient ways to make content and more effective ways to get audiences to consume it.

That changes the economics of what gets commissioned.

Africa is still important to Netflix

It would be wrong to interpret Netflix’s changing economics as a retreat from Africa.

The company has continued to invest in African stories.

In September, Netflix marked 10 years in South Africa by announcing a new slate and said its partnerships with more than 30 local production companies had supported more than 8,000 jobs.

The company has also continued to build relationships with established African media businesses.

In July, South African broadcaster eMedia and Netflix announced a licensing agreement under which e.tv’s new daily drama The Four of Us would become available on Netflix across Africa the day after its television broadcast.

That deal is interesting because it is not simply Netflix commissioning another original production.

It is a distribution arrangement between an established African broadcaster and a global streaming platform.

For Netflix, that can provide a steady supply of local programming without requiring it to carry every part of the production and development risk itself.

For African media companies, it creates another way to monetise content after—or alongside—its first window.

That may become increasingly important.

Nigeria shows the other side of the strategy

Netflix’s Nigerian business appears more cautious.

A detailed tracking of Netflix’s Nigerian activity in 2026 by WhatKeptMeUp found a return to more regular licensing of Nigerian films after their theatrical runs, while describing the company’s overall approach as smaller and more selective than its earlier expansion into Nigerian originals. The publication also found that some 2026 Nigerian titles received narrower territorial releases than filmmakers might previously have expected from a Netflix deal.

The distinction matters.

Netflix is still buying Nigerian content.

But buying an already tested film after its cinema run is different from financing the film from development through production and global distribution.

In the first model, some of the commercial risk has already been absorbed by the producer, investors, cinema operators and audiences.

Netflix is buying a product with evidence of demand.

That is a very different proposition from saying, in effect, “We think this Nigerian story could become a global hit, so we will fund the bet.”

And that is where Netflix’s global shift becomes relevant to Nollywood.

The streamer may increasingly want proof

Netflix’s own African results show why local content remains valuable.

South African drama The Polygamist, produced by Stained Glass Productions, had reached 27.6 million views by early August and had appeared in the Top 10 in 62 countries, according to Netflix.

Netflix also reported that South African content could travel beyond its home market, while its broader strategy continues to rely on local production teams that understand the audiences they are serving.

That is encouraging for African producers.

But it also raises the bar.

A global streaming company that is trying to improve engagement cannot treat every local production as equally valuable simply because it is local.

It needs stories that can attract audiences, retain them and potentially travel across borders.

That could favour producers with stronger distribution, recognisable talent, reliable production infrastructure and enough capital to make a project commercially visible before a streamer has to take a large risk.

For smaller Nigerian producers, that may make the market harder.

The opportunity may move closer to the cinema

This is where the relationship between Nollywood’s theatrical market and streaming becomes more important.

If Netflix increasingly licenses films after they have demonstrated commercial demand, the cinema becomes more than a place where producers earn ticket revenue.

It becomes a form of market validation.

A successful theatrical run gives a producer evidence that audiences will pay attention to a title before Netflix decides whether to buy it.

That does not mean every successful Nigerian film will get a Netflix deal. Nor does it prove that Netflix has adopted a formal rule requiring theatrical success.

But the pattern is commercially significant enough to watch.

It suggests that producers may increasingly need to think about a film’s entire revenue chain rather than treating a streaming sale as the end goal.

Cinema.

Streaming.

Television.

International licensing.

Advertising.

Remakes and adaptations.

The more fragmented the market becomes, the more valuable strong distribution becomes.

Netflix could still be a major buyer of African stories

There is a temptation to read Netflix’s changing strategy as bad news for Nollywood.

That would be too simple.

Netflix has demonstrated that African stories can become global products.

Its South African investment continues. Its Nigerian catalogue continues to expand through licensing and returning originals. And the company is still investing in local creative ecosystems.

The change is in the nature of the opportunity.

The earlier Netflix story was largely about access.

A Nigerian filmmaker could work with a global streaming company and suddenly reach audiences far beyond Nigeria.

The next phase is more likely to be about economics.

Which stories are worth the investment?

Which productions can generate enough viewing?

Which projects can travel?

Which titles can be licensed rather than commissioned?

And how much of the production risk should Netflix carry?

Those questions are becoming more important as the company tries to extract more value from a mature global audience.

The Netflix opportunity is changing, not disappearing

Netflix’s slowing engagement growth does not mean the streaming company is running out of money or abandoning international content.

The financial numbers show the opposite.

It means the company is becoming more deliberate about how that money is used.

For African producers, that distinction matters.

The opportunity to sell African stories to the world remains. But the era in which simply being African was enough to make a project strategically interesting to a global streamer was never going to last forever.

The next phase will reward businesses that can prove their audience, control their production economics and build multiple routes to market.

Netflix can still be one of those routes.

It just may no longer be the route.