Netflix Says Monetization Is Priority as US Viewing Time Slips
Streamer tells investors it will raise revenue from members and advertisers as outside estimates show people watching fewer hours
By AXY Tech Desk ·
Key points
- Netflix named monetization a top priority in its third-quarter earnings report on Tuesday, October 20, 2026.
- Netflix said the goals would help it occasionally raise prices and increase advertiser demand.
- Jefferies estimated monthly viewing time per member fell to 49 hours in the first half of this year, from 66 hours in the first half of 2023.
- Netflix accounted for 7.8 percent of US viewing time in July, a one-percentage-point dip from a year earlier.
- Netflix laid off around 1,000 employees last week and is replacing key content executives, with Peter Rice taking over as chief content officer on October 26.
Netflix has made earning more money from its audience one of its top priorities, a move that comes as outside estimates suggest people are spending less time watching its service. In its third-quarter earnings report on Tuesday, October 20, 2026, the streaming company listed improvements to monetization as one of its main focuses. It put that goal alongside efforts to boost the value of its entertainment and to use new technology.
Monetization is a plain business word for turning viewers into revenue. For Netflix, that mostly means the subscription prices members pay, the advertising it sells on its cheaper plan with ads, and other deals that bring in money. The company did not say exactly how it plans to improve monetization. Its investor letter did say the goals would help it "create member value that lets us occasionally raise prices, and increase advertiser demand."
That sentence is the core of the message. Netflix is betting that it can keep giving subscribers enough reasons to stay, so they will accept higher prices from time to time. At the same time, it wants advertisers to see the service as a better place to spend their budgets.
What Netflix told investors
The investor letter also pointed to a wider mix of programming. Netflix said it plans to push further into original titles, live events and third-party programming. As examples of opening the platform to a broader range of content, it cited its upcoming lineup of NFL games, a preview of Grand Theft Auto VI and its partnership with the French TV station TF1.
Netflix framed the push in competitive terms. The company described an "intense competition and an explosion of content competing for consumer attention." That is a fair description of the market. A typical household now chooses between many streaming services, free video platforms and social media feeds, all competing for the same evening hours.
The company also reported earning $12.9 billion over the past few months, a 12 percent increase from a year earlier. That is a sign the business is still growing in revenue terms. The harder question is whether that growth can continue if people spend less time with the service.
How viewing time became the question
The concern behind the earnings message is viewing time. An analysis from the financial firm Jefferies estimated that Netflix's monthly viewing time per member dropped to 49 hours in the first half of this year. In the first half of 2023, the same estimate was 66 hours. Those are Jefferies' estimates, not figures Netflix published in the material available for this report. Investors should read them as an outside view of how engaged subscribers are.
The pattern is not limited to one analyst. Netflix's share of US viewing time was 7.8 percent in July, according to earlier press reports. That was a dip of one percentage point from the same month a year earlier. A single point may sound small. For a company that once seemed to dominate the living room, however, it shows the pressure is real.
Why should an ordinary viewer care? Viewing time is the currency advertisers and subscription businesses watch closely. If members watch less, the service has fewer chances to show ads, and it has a harder case to make for raising monthly prices. Lower engagement can also make it harder to justify spending heavily on big shows and films, which can mean fewer new titles for the people who already pay.
The context matters too. Netflix began as a DVD-by-mail business before moving into streaming. Over the past several years it has raised prices, introduced a cheaper plan with advertising, and cracked down on account sharing. Each of those steps was meant to grow revenue. Now the company has to show that the money keeps coming in while people are watching for fewer hours.
Why the US is the harder market
During the earnings call, co-CEO Ted Sarandos drew a clear line between regions. Asked about the company's content strategy, he pointed to success abroad. "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. He then turned to the United States. "Now, the US is also working. It's just not growing as fast as it could or as fast as we'd like."
That answer tells investors that the company sees growth in other regions and is not yet satisfied with the American market. The US is Netflix's most mature market, and in mature markets growth is usually harder. Most people who want the service already have it. Growth then has to come from keeping current members, earning more from each one, or winning back people who have left.
Earlier press reports said Sarandos had complained internally that US-based users were spending less time on the service, and that Netflix was "short on new hit shows." The company has not, in the material available for this report, given a detailed explanation of those internal comments beyond its public remarks.
Rivals and creators are closing in
Competition is shifting as well. Netflix may face tougher rivals in the coming months from HBO Max and Paramount Plus. Their parent company has changed hands in a deal known as the Skydance merger, which combined Skydance with Paramount. Co-CEO David Ellison has said he plans to combine the two apps into a single service. A merged service with a large catalogue could appeal to people who now pay for two platforms, and it could draw money and attention away from Netflix.
YouTube is another pressure point, and it is not a traditional studio. Netflix has struck deals with several creators as it competes for their audiences. YouTube has reportedly offered channels "millions of dollars" not to post their videos on Netflix. That is a fight for talent and attention that goes beyond big film and television production. Creator videos are often cheaper to make than a scripted drama, and they can build loyal audiences quickly.
Layoffs and new content leadership
The earnings message comes during a period of change inside the company. Netflix laid off around 1,000 employees last week. It is also replacing key executives, including chief content officer Bela Bajaria and film head Dan Lin. Former Disney executive Peter Rice takes over as chief content officer on October 26.
The content leader matters because content decisions shape what subscribers watch. The chief content officer decides which shows get made, renewed or cancelled, and how the company balances expensive franchises against cheaper projects. A change at the top often signals that a company wants a different mix. Netflix's public material does not spell out what that new mix will look like.
Layoffs add another layer. Cutting roughly 1,000 jobs can reduce costs, but it can also raise questions about how much the company is investing in new productions. Investors will look for signs that the savings are being reinvested in the programming that keeps people watching.
What to watch next
Several things will show whether Netflix's approach is working. The first is how the company plans to raise revenue from members and advertisers without driving people away. Its ad-supported tier brought in $1.5 billion last year, and Netflix plans to bring that tier to 15 new countries in 2027. Analysts will watch whether those launches add meaningful revenue, and whether advertisers respond to them.
The second is viewing time. If outside estimates such as those from Jefferies keep showing fewer hours per member, Netflix will need to show that its new originals, live events and sports can reverse the trend. The NFL games and other live events on its schedule could be an early test. Watch for whether the next estimates show any change in hours per member.
The third is how the content leadership changes play out. Peter Rice's first decisions as chief content officer, which begin after October 26, will show how Netflix plans to rebuild its slate of hit shows, especially in the United States. Competition from a combined HBO Max and Paramount Plus service, if it arrives as planned, would make those decisions more urgent.
For subscribers, the practical questions are simple. Will the service keep offering enough reasons to stay? And will the price of staying keep rising? Netflix says it wants to do both. The next few quarters will show whether viewers agree.
Questions and answers
Why is Netflix focusing on monetization?
Netflix listed monetization as a top priority in its third-quarter earnings report on Tuesday, October 20, 2026. The company said the goals would help it occasionally raise prices and increase advertiser demand.
Is Netflix viewing time falling?
An analysis from Jefferies estimated monthly viewing time per member dropped to 49 hours in the first half of this year, from 66 hours in the first half of 2023. Netflix also accounted for 7.8 percent of US viewing time in July, a one-point dip from a year earlier.
Why is the US market a concern for Netflix?
Co-CEO Ted Sarandos said the US is working but is not growing as fast as the company would like. The American market is Netflix's most mature, which makes growth harder.
What could change for Netflix next?
Peter Rice takes over as chief content officer on October 26, and his decisions will shape the content slate. Netflix also plans to bring its ad-supported tier to 15 new countries in 2027.
Topics: Netflix, Netflix earnings, streaming monetization, Ted Sarandos, Peter Rice, HBO Max, YouTube
Sources: The Verge
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