Business · Companies · 1 hr ago
Netflix users are opening the app less often and watching less
Netflix users are opening the app less often and watching less than they did a few years ago, according to confidential company metrics.
The share of US subscribers who did not open the app rose 16.6% in the third quarter from a year earlier, based on data from app-tracking firm Apptopia.
The decline began after Netflix restricted password sharing in 2022, and it has continued longer than executives initially expected.
The trend may mean customers see less value in Netflix or are spending more time with rivals, although the reported decline in use has been modest.
Netflix is increasing its programming budget and adding areas such as podcasts and live sports to attract and keep customers.
US cancellations have remained steady at 2%, which research firm Antenna says is the best rate in the industry.
Netflix leaders say viewing in the US is growing more slowly than they want, while the company faces slowing revenue growth and investor concern about its outlook.
Netflix users are opening the app on fewer days and spending less time watching individually, according to people familiar with confidential company metrics.
The decline began after Netflix cracked down on password sharing in 2022 and has continued.
Netflix executives have cited possible causes including greater competition, programming and a new user interface.
The company is expanding into podcasts and live sports as it seeks to attract and retain customers.
The usage decline has not led to mass cancellations, and Netflix’s US churn rate has remained at 2%, according to Antenna.
- Who
- Netflix users are watching less and opening the app less often.
- What
- Internal metrics show declining engagement and viewing time per customer.
- When
- The trend began after the password-sharing crackdown in 2022 and has continued.
- Where
- The reported decline is especially apparent in the US; the articles also describe the broader Netflix service.
- Why
- The reason is not established. Executives have cited possible factors including competition, programming, a new interface and less marketing.
Netflix executives
Concerned investors
Business outlook
Netflix executives
Netflix co-CEOs said the company has a healthy business model and is doing well outside the US.
Concerned investors
Investors are concerned about slowing growth and declining user engagement.
Growth
Netflix executives
Executives said the company is delivering on its metrics and has a strong slate of programming ahead.
Concerned investors
Investors worry that slowing revenue growth and reduced viewing could threaten future growth.
Netflix cracked down on password sharing, after which the decline in usage began.
Total time spent on the app increased by a couple of percentage points as Netflix added customers, while individual users watched less.
Apptopia data showed that the share of US subscribers who did not open the app rose 16.6% from a year earlier.
Ted Sarandos told analysts that US viewership was not growing as fast as the company would like.
- Usage measure
- QPD, or qualified play days, tracks how often customers use the app.
- US churn
- 2%, steady and described by Antenna as the best in the industry.
- App non-use
- The share of US subscribers who did not open Netflix rose 16.6% year over year in the third quarter, according to Apptopia.
- Advertising sales
- Forecast to fall about $300 million short of earlier projections this year.
- Shares
- Netflix shares had slipped about 29% this year.
3 sources
What people are saying
just not growing as fast as it could or as fast as we’d like.
Two things can be true,
We have an enviable growing and profitable business. And at the same time we know there’s more work to do to drive more growth.