Netflix Viewership Declines, Major Drop in Stock
Previously, Netflix introduced a major overhaul to the platform's interface. While the design was completely revamped, all these efforts failed to increase viewership; on the contrary, further declines are occurring.
Rising costs, increasing subscription prices... Netflix is now losing customers, and its viewership is declining every passing year. The company, which previously aimed to increase its subscriptions by cracking down on password sharing, cannot prevent the drop in subscribers and viewership despite all its efforts.
DECLINE IN NETFLIX VIEWERSHIP
The per-person viewing time spent on the platform by Netflix users is showing a decline. According to Bloomberg's report, although total watch time increased in the first half of the year, this rise stems from new subscribers joining the system. The platform tracks the loss of engagement through "Qualified Play Days" (QPD) data, which measures the days users play content.
It is reported that the decline in usage time emerged when the company began restricting password sharing in 2022. Management anticipated that this picture would be temporary, but the trend has not changed. Following these developments, company shares have lost approximately 29 percent of their value since the beginning of the year.
Why Are Viewership Rates Declining?
According to Netflix management, there are many factors behind the decline in usage time. Among these are the renewed user interface, competition from alternative platforms, and productions failing to generate sufficient viewer interest. Inadequate marketing efforts outside the platform are also among the topics being evaluated.
On the other hand, it is stated that the platform has recently struggled to produce hit content and is losing viewers in the second and third seasons of existing productions. To overcome this situation, the company is increasing its content budget while turning to live sports and podcast broadcasts.
In my opinion, the new interface is better in every way. However, it is still not entirely satisfying when it comes to selecting content. Therefore, the decline might be related to this, or it might have nothing to do with it at all.
YouTube Competition in the US Market and Financial Picture
The company admits that viewership rates in the US have fallen below expectations. With the rise of free platforms like YouTube, Netflix's share of total TV viewership is experiencing stagnation. According to Apptopia data, the proportion of subscribers in the US who never open the Netflix app rose by 16.6 percent year-on-year.
| Indicator | Actual / Expected Change |
|---|---|
| Stock Value (Year-to-date) | 29 percent decline |
| US Monthly Subscriber Churn Rate | 2 percent (Lowest in the industry) |
| Annual Advertising Revenue Outlook | 300 million dollars below previous estimate |
| Subscriber Rate Not Opening the App (US) | 16.6 percent increase |
In addition, Netflix's revenue growth has recorded a slowdown for three consecutive quarters. Due to the slower-than-planned rollout of ad products, annual ad revenue is expected to fall 300 million dollars short of the previous target.
How Does This Situation Affect Users?
Although usage rates have declined, viewers do not appear to be canceling their subscriptions en masse. According to data from research firm Antenna, the company's monthly subscriber churn rate in the US is hovering around 2 percent. Netflix states that the price increases did not lead to an unusual surge in cancellations.
Aiming to halt the decline, the company took action at the management level in early October. While Content Director Bela Bajaria and film division head Dan Lin were dismissed, the workforce was reduced by 6 percent. In the coming period, it is planned to offer users more live sports broadcasts, podcasts, and different types of content.
This article was translated from Turkish. Read the original article in Turkish.
