Netflix users open the app less often as internal metrics show declining individual watch time

Netflix Inc. users are opening the app on fewer days a month and watching the streaming service less than they did a couple of years ago. The company tracks this frequency with a metric called QPD, or qualified play days. Total time spent on the app rose by a couple of percentage points in the first half of the year only because the platform added more subscribers, while each individual person actually watched less.

Leadership Changes

This drop in usage alarmed Netflix executives, who initially believed the trend would pass after the platform cracked down on password sharing in 2022. Co-Chief Executive Officer Ted Sarandos told analysts that US viewership is not growing as fast as leadership wants, though Co-CEO Greg Peters noted the business model remains healthy outside the US. To address these challenges, Netflix replaced Chief Content Officer Bela Bajaria and film chief Dan Lin, cut 6% of its staff, and named former Walt Disney Co. and 21st Century Fox executive Peter Rice to lead content strategy.

Market Pressures

Research firm Antenna reported that US customer churn stayed steady at 2%, and the company noted price increases did not cause abnormal cancellations. However, Netflix shares fell about 29% this year amid slowing revenue growth for three straight quarters. Advertising sales will fall short by about $300 million due to a slow product rollout, and US TV viewing share stagnated as users moved to free services like YouTube. Apptopia data shows the share of US subscribers who skipped opening the app rose 16.6% in the third quarter compared to the prior year.

Context

Streaming platforms rely heavily on consistent daily user engagement to retain subscribers and sell advertising space in a crowded digital media market. Companies often adjust executive leadership and expand into new content categories like live sports and podcasts when traditional viewership metrics begin to slow down.