Netflix user engagement declines following password sharing crackdown

Netflix is experiencing a decline in subscriber engagement, with users opening the app less frequently and spending less time watching content. This trend follows the company’s implementation of policies to combat password sharing in 2022 and 2023.

Data from Jefferies indicates that the average monthly viewing time per subscriber dropped from 66 hours in the first half of 2023 to 49 hours in the same period of 2026. Additionally, Apptopia reported a 16.6% increase in the proportion of U.S. subscribers who did not open the app during the third quarter compared to the previous year.

While total viewing time saw a slight increase in the first half of 2026, this was primarily driven by new subscribers rather than increased usage from existing ones. Despite these engagement metrics, cancellation rates in the United States remain stable at approximately 2%, according to Antenna.

Market concerns regarding growth momentum have contributed to a decline in Netflix’s stock price. To address challenges and competition from platforms like YouTube and TikTok, the company has undergone organizational restructuring, including a workforce reduction of approximately 1,000 employees, and is expanding into areas such as live sports and podcasts.