Chart of the Week: How Much Time Do People Spend Watching Netflix?
In a surprise move, Netflix earnings crushed expectations this week, with revenue and subscriber numbers far above Wall Street (and its own) projections – news which sent its stock price soaring by 20%. While Netflix has made a few stumbles as it expands to international markets, its latest numbers show that it’s still a dominating force in the U.S.: its quarterly domestic net subscriber growth exceeded expectations by nearly 25%.
But while Netflix’s revenue and subscriber growth numbers are impressive, will these new subscribers stick around? We took a look at Netflix user data among U.S. adults, ages 18 and over, to assess whether Netflix’s user engagement data reflects the same trends as its latest earnings report.
Netflix User Engagement by the Hour
Verto Analytics data show that while Netflix reported an increase in subscriber numbers over the past quarter, Netflix’s monthly user activity actually fluctuated significantly: including June as a reference point, Netflix’s monthly unique users declined over the course of the summer, before rising again in September – perhaps a reflection of changing user behavior over the summer vacation period. Conversely, user engagement—as measured by the amount of time spent per user—rose as monthly uniques fell; the average amount of time spent per user per month actually peaked during the months with the lowest number of monthly unique users.
In fact, in July, as Netflix saw a 5% drop in unique monthly users, the average user spent more than seven hours engaged in Netflix content – that’s an increase of more than an hour of viewing activity compared to the previous month. Notably, Netflix released its hit original series Stranger Things on July 15, and Verto Analytics data suggests that binge-watching activity may partially explain these higher user engagement numbers during that month (seven hours is almost the full run time of Stranger Things: Season 1). While Netflix has purportedly unlocked the key to creating addictive content, it remains to be seen if this formula will actually lead to long-term subscriber growth, or—as we observed this summer—the development of a highly engaged but small user base. It’s also unclear if Netflix can replicate this success overseas; even in other English-speaking markets such as the UK, Netflix faces some stiff competition from local incumbents. Can Netflix convert these strong subscriber numbers into engaged long-term customers?
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