People aren’t opening the app as often as they did a couple of years ago, and when they do open it, they’re spending less time watching. Netflix tracks this with an internal number called “qualified play days.”
Total viewing hours went up a little in the first half of the year, but only because the company added more subscribers. On average, each person is watching less.
The drop started after Netflix cracked down on password sharing in 2022. Leaders thought it would be temporary (fewer people per account), but it has continued. Possible reasons include a new app design, more competition, weaker shows and movies, and less marketing outside the app.
Other data matches this picture. Bloomberg reports research firm Apptopia found that the share of U.S. subscribers who didn’t open the app rose 16.6% in the latest quarter compared with a year earlier.
Netflix’s stock is down about 29% this year. U.S. viewership isn’t growing as fast as the company wants, competition from free options like YouTube is strong, and revenue growth has been slowing. Advertising revenue is also expected to miss earlier targets by roughly $300 million.
Co-CEO Ted Sarandos has said U.S. viewing “is just not growing as fast as it could or as fast as we’d like.” The company is still profitable and doing better overseas, but leaders acknowledge they need to do more to grow.
Netflix is spending more on programming, adding things like podcasts and live sports, and recently changed some top content leaders (including firing its chief content officer) to try to turn things around. The company declined to comment on the internal numbers.