US viewing share and member hours fall as Netflix tells investors not to worry, even though they’re watching less

Monetization moves up the agenda

In its third-quarter earnings report, Netflix named improved monetization as a major focus, alongside boosting entertainment value and making use of new technology. The company did not specify exactly how it will pursue that goal.

Netflix said these efforts could create member value that allows occasional price increases and strengthens advertiser demand. It also cited intense competition and a growing volume of content competing for people’s attention.

Viewing figures show declines

Jefferies estimated that Netflix members watched an average of 49 hours per month in the first half of this year, compared with 66 hours in the first half of 2023, according to Reuters. The New York Times reported that Netflix accounted for 7.8 percent of US viewing in July, one percentage point below the same month last year.

On an earnings call, co-CEO Ted Sarandos said titles from Latin America, Europe, the Middle East and Africa, and Asia-Pacific were driving engagement, subscriber growth, revenue and profit. He said the US business was also working, but not growing as quickly as desired.

Programming and leadership changes

Netflix cited upcoming NFL games, a Grand Theft Auto VI preview and a partnership with French broadcaster TF1 as examples of its broader content offering. The company reported $12.9 billion in revenue over the past few months, a 12 percent increase from a year earlier.

The company plans to bring its ad-supported tier, which generated $1.5 billion last year, to 15 additional countries in 2027. Last week, Netflix laid off around 1,000 employees and announced executive changes; former Disney executive Peter Rice is set to become chief content officer on October 26th, replacing Bela Bajaria.

Competition and possible changes

Netflix faces potential competition from HBO Max and Paramount Plus, which David Ellison has said he plans to combine into one service after the Skydance megamerger. The company is also competing with YouTube, which has reportedly offered some channels millions of dollars not to post videos on Netflix.