Netflix is placing monetization at the center of its strategy as user viewing time continues to fall, according to the company's third-quarter earnings report released Tuesday. The streaming service identified better monetization as a core priority moving forward, alongside boosting the value of its entertainment offerings and adopting new technology. While Netflix didn't specify exactly how it would strengthen revenue generation, the company said these objectives would help it "create member value that lets us occasionally raise prices, and increase advertiser demand."
An estimate from Jefferies, a financial services firm, showed that Netflix members watched an average of 49 hours per month during the first six months of this year, a decline from 66 hours during the same period in 2023, according to the report. Meanwhile, Netflix accounted for 7.8 percent of total viewing time in the United States in July, representing a one-percentage-point decrease from July of the previous year. Despite these headwinds, the company brought in $12.9 billion in revenue over the past quarter, reflecting a 12 percent year-over-year gain.
During an earnings call, co-CEO Ted Sarandos highlighted the company's international performance when asked about content strategy. "We see titles across Latin America, EMEA (Europe, the Middle East and Africa), APAC (Asia-Pacific), driving engagement, subscriber growth, revenue, and profit," Sarandos said. "Now, the US is also working. It's just not growing as fast as it could or as fast as we'd like." The company also noted it faces "intense competition and an explosion of content competing for consumer attention," prompting plans to expand into more original programming, live events, and third-party content.
The report explains that Netflix is responding to declining domestic engagement through both organizational restructuring and platform expansion. Last week, the company eliminated roughly 1,000 positions while replacing senior leadership, including chief content officer Bela Bajaria and film head Dan Lin, with former Disney executive Peter Rice taking over as chief content officer on October 26th. To broaden its content portfolio, Netflix pointed to upcoming NFL games, a Grand Theft Auto VI preview, and a partnership with French broadcaster TF1. The company also plans to roll out its ad-supported tier—which generated $1.5 billion last year—to 15 additional countries in 2027. Netflix has explored even larger platform changes, including potentially integrating third-party streamers like Peacock and Fox One, as well as adding always-on channels.
The streaming giant faces intensifying competition on multiple fronts. HBO Max and Paramount Plus may present tougher rivalry following the Skydance megamerger, with co-CEO David Ellison planning to merge the two services into one application. Netflix has also signed deals with various creators as it competes against YouTube, which has reportedly offered channels "millions of dollars" to keep their videos off Netflix's platform. For business leaders watching the streaming wars, the tension between engagement metrics and revenue growth signals a fundamental shift in how platforms define success. Companies that once chased raw viewing hours are now betting that pricing power and advertiser appeal can matter more than time spent, a gamble that will test whether subscription fatigue has limits or breaking points.