Wells Fargo estimates Netflix subscribers watch about 9% less than three years ago

Netflix is leaning on advertising and price increases as subscriber growth matures, and fewer viewing hours can mean fewer opportunities to deliver advertisements. The company lowered its 2026 advertising revenue outlook to about $2.7 billion from $3 billion, citing delays in its advertising technology rollout. Wells Fargo expects advertising to account for more than a third of Netflix's revenue growth next year.

Fewer hours per subscriber

Netflix said it passed 97 billion viewing hours in the first half of 2026, a record for a first half. Total time on the platform rose only a couple of percentage points, according to Bloomberg, and that increase came from more customers rather than each customer watching more.

The share of U.S. Netflix subscribers who did not open the app rose 16.6% year over year in the third quarter, Apptopia data cited by Bloomberg shows. Netflix tracks usage through a metric it calls qualified play days, and that measure has declined over the past couple of years.

Bloomberg reported that the slide began around the 2022 password-sharing crackdown. Executives expected the drop to be temporary. The trend persisted.

Wells Fargo estimates that viewing per subscriber is about 9% lower than three years ago. Netflix has pointed to stronger competition, a weaker run of hit programming, changes to the user interface and thin promotion of titles outside the service.

There is no evidence of a mass subscriber exodus: U.S. churn has stayed around 2%, according to Antenna, and Netflix said recent price rises did not cause an unusual spike in cancellations.

Revenue growth slows

Revenue growth slowed in the third quarter. Netflix reported $12.9 billion in revenue, up 11.8% year over year, its slowest quarterly growth in three years. The company remains profitable and continues to grow.

YouTube competition

Nielsen put YouTube at a record 14.2% of U.S. television viewing in July, up 6% from June, and Netflix at 7.8%. YouTube draws roughly twice Netflix's share.

HSBC downgraded Netflix to Hold from Buy on 22 September and cut its price target to $76 from $96, arguing YouTube is taking viewing share. Wells Fargo downgraded the stock on 18 September, citing weakening viewership, lowered its 2027 and 2028 operating margin forecasts and said a weaker content slate could require increased investment.

Bloomberg reported in August that YouTube has discussed paying creators millions of dollars to keep their videos exclusive, a countermove while Netflix courts the same creators.

Company response

Netflix has responded with cost cuts and a content leadership change. On 14 October it announced about 1,000 job cuts, roughly 6% of its workforce and its largest round since 2022. Peter Rice became chief content officer on 26 October, replacing Bela Bajaria, with oversight of global programming including scripted and unscripted series, films and live events.

Netflix stopped reporting subscriber figures last year and said it will publish its What We Watched engagement report annually in the first quarter beginning in 2027, after the edition covering the first half of 2026, a change it said keeps focus on revenue and operating profit as its primary financial metrics.

Ted Sarandos told analysts on the second-quarter call that Netflix sees no material change in second-season viewing and that its second seasons perform within its bands of expectation.