Users of Netflix Inc. are spending less time watching the streaming platform than before, according to individuals with knowledge of the situation, marking the most recent indication of engagement challenges for the most valuable entertainment firm globally.

Subscribers are not launching the application on as many days per month as they did a few years ago, the sources said, requesting anonymity because the information is private. The business employs a measure called QPD, or qualified play days, to track how frequently users access the app.

The typical subscriber is also dedicating less time to viewing. Although overall time on the application rose by a few percentage points in the first half of the year, this is attributable to the addition of more subscribers. Each person is watching less.

The drop in these metrics has concerned Netflix's leadership. It began after the company took action against password sharing in 2022, and initially, executives believed it would be temporary, since fewer individuals were using each account. However, the pattern has persisted, heightening the danger that users are perceiving less worth in the service or devoting more time to competitors.

Netflix has boosted its content budget and is venturing into new areas, including podcasts and live sports, to draw in new subscribers and keep existing ones.

The company chose not to provide comments on internal metrics.

Co-Chief Executive Officer Ted Sarandos informed analysts during a call this week that viewership in the US specifically is "just not growing as fast as it could or as fast as we'd like." Yet he and Co-CEO Greg Peters also stated that the company is performing well beyond the US and possesses a very robust business model.

The usage decrease has been slight and has not resulted in widespread cancellations. The company's churn rate in the US has stayed constant at 2% and is the top in the sector, as per Antenna, a research organization. Netflix mentioned this week that price hikes have not caused any unusual surges in cancellations.

Netflix's shares have dropped approximately 29% this year as investors fret about the company's decelerating growth. Netflix's overall portion of TV viewing in the US has leveled off as subscribers turn to free offerings like YouTube. The company disclosed its third straight quarter of slowing revenue growth and predicted it would decelerate again in the present quarter. Netflix stated that advertising sales this year will miss their earlier estimates by about $300 million, which it attributed to a slower introduction of new products.

Netflix has not generated as many fresh hit TV programs and movies as it did in previous years and has found it difficult to draw viewers to second and third seasons of current shows. Company executives have pinpointed numerous potential causes for the usage drop, such as a new user interface, heightened competition, inferior programming, and a scarcity of marketing beyond the service.

Apptopia, a company that monitors mobile app usage, has indicated signs that Netflix subscribers are devoting less time to the service. The percentage of US subscribers who did not open the app climbed 16.6% in the third quarter, relative to the previous year, based on Apptopia's figures.

Sarandos and Peters have tried to calm rising investor worries by stating the company was meeting its metrics and by promoting a strong lineup of upcoming programming. "Two things can be true," Peters remarked in a town hall with staff this week. "We have an enviable growing and profitable business. And at the same time we know there's more work to do to drive more growth."

The company tackled its weakness in the US by altering leadership. Earlier this month, Netflix dismissed Chief Content Officer Bela Bajaria, along with film chief Dan Lin, and reduced 6% of the staff. Peter Rice, a veteran of Walt Disney Co. and 21st Century Fox, will now head the company's content strategy.