Netflix, the world’s largest streaming platform by subscriber numbers, is facing a decline in viewership, with one major investment bank warning that reduced audience engagement could become a serious problem for the company.
Although Netflix has more global subscribers than any competing streaming service, viewers are spending less time watching its content. During the first six months of the year, audiences watched 8 percent fewer hours of Netflix shows, movies and live events compared with the same period in 2023, according to Wells Fargo analyst Steven Cahall, who spoke to Yahoo Finance in late September.
The decline could have a significant impact on the company’s revenue and long-term prospects, particularly as Netflix expands its advertising business. Advertising revenue depends heavily on how much time viewers spend watching content, not simply on the total number of subscribers.
“Engagement trends look worrying to us,” Cahall said.
Netflix shares have fallen approximately 32 percent since the beginning of the year, and the stock could finish the year at its lowest level since 2023, according to the report.
Wells Fargo’s negative outlook is partly tied to Netflix’s advertising revenue, which is vulnerable to declining viewing hours.
According to Wells Fargo data cited by The Wall Street Journal, Netflix users watched an average of 1.81 hours of content per day in June 2023. Over the past three years, that figure has dropped to 1.64 hours.
Netflix introduced its “Basic With Ads” subscription plan in October 2022 for $6.99 per month, marking the first time the company offered an advertising-supported membership. Netflix also runs advertisements during live events, including boxing matches and NFL games, regardless of viewers’ subscription plans.
Despite the popularity of some of its productions, Netflix has struggled to place more exclusive titles among the most-watched programs. According to audience analytics firm Nielsen, Stranger Things recorded the most viewing hours during the first half of the year. However, the only other Netflix original series to make the top 20 was the period drama Bridgerton.
Another setback for the company’s ambitions was the collapse of its proposed acquisition of Warner Bros. Discovery.
Cahall expects viewing hours to decline further, potentially reducing advertising revenue. He estimates that Netflix shares could lose another 21 percent of their value before the end of the year.
Not all analysts share that pessimistic outlook.
Neil Patel, an analyst at The Motley Fool, argues that Netflix’s purchase of nearly 70 million of its own shares between July and September signals confidence in the company’s long-term prospects.
“The overarching takeaway is that executives must believe the stock is cheap. If they didn’t think this was the case, they would’ve repurchased far fewer shares or paid down debt, for instance,” Patel wrote in his analysis.
He also points to Netflix’s dominant position in the streaming market as a factor that could help the company recover from its stock decline.
“With over 325 million subscribers (data from year-end 2025) and expected 2026 revenue of $51.1 billion, it operates with tremendous scale,” Patel wrote.
That scale, he argues, strengthens Netflix’s brand and allows the company to spread its growing content-production costs across a massive subscriber base.
