Netflix faces questions on user engagement ahead of third-quarter report

Oct 19 (Reuters) - Netflix investors are expecting details on how the streaming giant plans to sustain growth when it reports third-quarter results on ‌Tuesday, as competition intensifies and user engagement shows signs of fatigue.

Ted Sarandos, ‌the co-CEO of Netflix, recently admitted the company "is not growing as fast as I want us to", ​and suggested live programming could be an opportunity to accelerate growth.

The streamer is contending with a fundamental shift in entertainment as lower-cost, creator-led videos chip away at premium scripted content. YouTube, the dominant streaming platform in the US, has nearly double the ‌viewing time of Netflix and ⁠continues to gain market share, according to Nielsen.

• Netflix is expected to post its slowest third-quarter revenue growth ⁠in three years, with sales forecast to increase 11.8% to $12.87 billion, according to data compiled by LSEG.

• It cut about 6% of its workforce in a move that analyst ​Ross Benes ​of Emarketer said reflected the streaming industry's ​shift to profitability.

• Netflix also ‌saw a change in its content leadership, with longtime head of content Bela Bajaria leaving the company and former Disney executive Peter Rice taking over.

• Its US user churn rose 16.6% year-over-year in the third quarter, roughly double the pace of the prior three quarters, while downloads in the US and Canada fell 20%, according ‌to market research firm Apptopia.

• Jefferies estimates average ​monthly viewing time per Netflix member fell to ​49 hours in the first ​half of this year from 66 hours in the first half ‌of 2023.

• The 2026 FIFA World ​Cup and a weaker ​content slate than last year weighed on Netflix's engagement, analysts said.

• The company recently acquired broadcast rights to air the 2030 FIFA World Cup ​in Spain and Andorra.

• Netflix ‌is betting on advertising to diversify revenue, with Jefferies forecasting ad revenue ​to reach $7.5 billion in 2029.

(Reporting by Harshita Mary Varghese in Bengaluru; ​Editing by Edmund Lee and Devika Syamnath)