People are watching Netflix less even as it adds millions of subscribers

Key Points
  • Average Netflix viewership time declined from 206 minutes per user in March to 179 minutes in June, according to Verto Analytics.
  • The decline may be due to Netflix trying to reach a mass audience, which does not watch as much video as its early-adopter subscribers.
  • It may also be reaching a more mobile-first audience, which traditionally has shorter viewing sessions on their phones.
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Netflix may have a challenge keeping the attention of its audience as more rivals release their own original content.

According to data measurement firm Verto Analytics, people are watching Netflix less even as subscriber numbers grow. Average viewing time decreased 13 percent over the last quarter alone — 179 minutes per month in June compared to 206 minutes in March.

Though the data fluctuates month to month, there is an overall decline over the last year. In July 2016, Netflix viewers spent an average of 268 minutes on the platform, and last December it was still at 222 minutes. Verto's data comes from 20,000 of its SmartPanel users, which have installed on-device measurement apps on their phones, tablets and computers.

Still, Netflix is going strong. The company added 5.2 million subscribers, according to its Q2 earnings report on Monday, far above estimates of 3.2 million. (It also posted $2.79 billion in revenue, and earnings per share of 15 cents.)

Netflix's decline in viewership time could be due to the fact that newer users may not watch as much video as its early-adopter subscribers, Verto Analytics CEO Hannu Verkasalo told CNBC by email.

"As Netflix grows bigger, it is also gaining mass market consumers into their user base, which decreases average engagement metrics," he wrote.

The shorter sessions could also mean more subscribers are moving to mobile screens, which traditionally have shorter viewing times. Netflix is now competing against Facebook, Snapchat and YouTube, as they develop more robust video programming, Verkasalo added.

"Netflix is going more and more towards the short-form competition and mobile competition," he wrote.

And as other companies release their over-the-top TV viewing options and premium original video offerings, Netflix is facing stiffer competition. Hulu with Live TV, YouTube TV, PlayStation Vue, AT&T's DirecTV, and Dish's Sling TV all offer ways to watch TV without a cable or satellite subscription. Meanwhile, others, such as Apple and Amazon, are ramping up original content.

Still, the company remains the leader in viewership time. For comparison, viewers spent 102.8 minutes on Amazon Video and 67 minutes on HBO Go in June, according to Verto Analytics data. It still has 4 times the monthly users as Amazon, and 28 times the number of subscribers as HBO Go, per the company's analytics.

Netflix declined to comment.

Note: CNBC's parent company NBCUniversal is a co-owner of Hulu.

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