Netflix usage slips as subscriber growth masks slowdown

Netflix subscribers are using the service less often, according to people familiar with internal data, despite growth in overall viewing.

Those people describe declines in both viewing frequency and average watch time, with subscriber additions lifting aggregate consumption. The distinction matters for Netflix: a larger customer base can support higher total viewing even when individual engagement weakens.

The people cited confidential information as the reason for remaining anonymous. Netflix declined to discuss its internal measures, leaving the scale of the reported deterioration undisclosed.

Subscriber additions obscure weaker engagement

Netflix tracks viewing frequency through qualified play days, a measure abbreviated as QPD. According to the people familiar with the figures, customers now use the service on fewer days each month than they did roughly two years earlier.

The supplied account places the beginning of the decline after Netflix tightened restrictions on account sharing in 2022. Executives initially viewed lower engagement as a temporary consequence of fewer viewers sharing an account, the people said, but the weakness persisted.

That explanation remains a management assessment rather than an established cause. The account also describes executives considering several alternatives, including interface changes, competing services, programming quality and insufficient promotion beyond Netflix itself.

Separate mobile-use figures point in a similar direction, although they measure something different. Apptopia reported that the proportion of US subscribers who never opened Netflix’s app increased 16.6% in the third quarter from a year earlier; that is a relative increase, not a percentage-point change.

US cancellations remain steady

Lower usage has not coincided with a comparable deterioration in customer retention in the supplied figures. Research firm Antenna put Netflix’s US cancellation rate at 2%, unchanged, while Netflix said its price increases had not produced unusual cancellation surges.

Co-Chief Executive Officer Ted Sarandos acknowledged slower-than-desired US viewing growth during an analyst call. He described it as “just not growing as fast as it could or as fast as we’d like.”

Sarandos and fellow Co-CEO Greg Peters offered a more favorable assessment of operations beyond the United States and defended the company’s business model. Their position separates regional viewing weakness from the financial performance of Netflix as a whole.

The company nevertheless reported a third successive quarter of decelerating revenue growth and forecast another slowdown. Netflix also put expected annual advertising sales about $300 million below its previous forecast, attributing the revision to delays in introducing products.

Programming spending faces a retention test

Netflix has raised its programming budget and is adding formats including podcasts and live sporting events. The expansion broadens its offering as management seeks both additional subscribers and continued subscriptions from existing customers.

If those investments lift viewing frequency while cancellations remain steady, Netflix would have evidence that its larger content offering is drawing subscribers back more regularly. For competing streaming businesses, that outcome would make breadth of programming a more relevant competitive benchmark, rather than subscriber totals alone.

If usage instead continues weakening, stable retention would remain the counterweight to concerns about perceived value. The decisive indicators would be whether cancellation rates change, whether new programming brings repeat viewing and whether advertising sales recover against Netflix’s revised expectations; the supplied figures do not establish a broader macroeconomic effect.