Netflix is still adding subscribers, but the engagement layer beneath that growth is softening. People familiar with the data told The Economic Times that customers now open the app on fewer days each month than they did a couple of years ago, and the average user is spending less time watching.
The metric Netflix is tracking
Netflix measures app use through QPD, or qualified play days. Total time on the app rose by a couple of percentage points in the first half of the year, but only because the company added more customers. On a per-user basis, viewing is declining.
The slide began after Netflix enforced its 2022 password-sharing crackdown. Leadership initially expected a short-lived dip, since fewer people were sharing each account. Instead, the trend has continued, raising the question of whether subscribers see less value in the service or are spending more time with competitors.
Usage is slipping, but churn is not
The usage decline remains modest and has not produced mass cancellations. Antenna puts Netflix’s US churn at 2%, stable and the best in the industry. Netflix also said this week that price increases have not caused abnormal cancellation spikes.
- Apptopia found that the share of US subscribers who did not open the app rose 16.6% in Q3 year on year.
- Netflix’s share of US TV viewing has stagnated as viewers flock to free services such as YouTube.
- Advertising sales are tracking about $300 million below earlier projections for the year, blamed on a slower rollout of new products.
Why this matters for media planners
For entertainment marketers and buyers, QPD is a leading indicator. Churn tends to lag engagement by quarters; a per-user usage decline can show up first in time spent and ad-supported inventory before it appears in subscription cancellations. Netflix has also reported its third consecutive quarter of slowing revenue growth and projects another slowdown this quarter. Shares are down about 29% this year.
The company has identified several possible causes: a new user interface, tougher competition, weaker programming, and limited marketing outside the service. Fewer breakout hits and weaker second and third seasons have compounded the problem.
The leadership reset
Netflix has already moved on the content side. Earlier this month it dismissed Chief Content Officer Bela Bajaria and film chief Dan Lin, cut 6% of staff, and brought in Peter Rice, previously of Walt Disney and 21st Century Fox, to lead content strategy.
Co-CEO Greg Peters acknowledged at a town hall that “we know there’s more work to do to drive more growth,” while defending the business as profitable and growing. For the market, the next question is whether the new content team can reverse per-user engagement, not just protect the subscriber total.
Source: The Economic Times
