[Digital Today reporter Chi-gyu Hwang] Netflix released its third-quarter results on Oct. 20 local time and showed its ability to make money remains intact. But the market response was cold.

Netflix posted third-quarter revenue of $12.9 billion, up 12 percent from a year earlier. But quarterly revenue growth was the slowest in three years. Net profit jumped 44 percent to $3.66 billion and operating margin rose to 34.6 percent from 28.2 percent a year earlier. Even so, the stock fell more than 5 percent in after-hours trading.

Foreign media including the Wall Street Journal and the New York Times said worries that viewing time is not increasing weighed on the stock.

In a letter to shareholders, Netflix acknowledged investor concerns about viewing-time growth and pointed to the United States and Canada. Revenue growth in the two regions slipped to 11 percent from 17 percent a year earlier. Co-CEO Ted Sarandos (테드 서랜도스) said on a conference call, "We don't need to fundamentally change the strategy, but we need to execute better in the U.S."

YouTube is also a variable. Nielsen said Netflix accounted for 7.8 percent of TV viewing time in the United States in July, down 1 percentage point from a year earlier. YouTube topped 14 percent, the New York Times reported.

A lack of hit titles added to the pressure. The complaint is that no follow-up has emerged to succeed 'Stranger Things' and 'Squid Game'. Viewers fell sharply for the latest seasons of 'Beef' and 'The Night Agent'. There was also no buzz title this summer like last summer's 'K-pop Demon Hunters'. The top-grossing film in the third quarter, 'The Last House', logged 91 million views but drew harsh reviews from both critics and audiences.

Jesse Cohen (제시 코헨), a senior analyst at Investing.com, said, "Netflix has an engagement problem. Users are shifting the attention that Netflix used to capture to TikTok and YouTube," adding, "It needs another hit."

The stock's performance has also been weak. Netflix sought to acquire Warner Bros. Discovery's (WBD) studio and streaming business for about $83 billion in September last year. It later backed away, saying it would not engage in a bidding war with Paramount Skydance, but the stock failed to gain traction. Compared with a year ago, Netflix shares are down more than 40 percent.

Against that backdrop, Netflix has also pulled out a reorganisation as a card to turn around sentiment. It cut about 1,000 jobs last week, about 6 percent of its workforce. In the process, Chief Content Officer Bela Bajaria (벨라 바자리아) and Dan Lin (댄 린), head of the film division, also left the company. Netflix tapped Peter Rice (피터 라이스), who worked at Fox for 30 years and later served as a senior Disney executive, as its new CCO.

Some have said Lin, the former CCO, clashed with creators after emphasising cutting production costs and selecting projects that were more likely to work. The New York Times reported that Noah Baumbach (노아 바움백) and director David Fincher (데이비드 핀처) ended their relationship with Netflix during the process.

Sarandos also made clear the company will focus on its "core" of TV series and films. It has expanded into video podcasts and games, but said about 95 percent of its content budget is spent on its core areas. "The core is the growth engine," he said.

Whether Netflix expands theatrical releases under Rice is also a point to watch. Sarandos has called theatrical distribution an "old way" for years. Against that backdrop, Netflix disclosed box office revenue for the first time over the weekend related to the Spanish-language film 'La Bola Negra', which it bought at the Cannes Film Festival. The film will run in theaters for 45 days before being released on Netflix. It is a shift for Netflix, which has prioritised its own service over theaters.

Viewing time is raising concerns, but the story changes when it comes to churn. Antenna said Netflix's subscription cancellation rate in September was about 2 percent, the lowest level in the industry.

Even so, concerns about viewing time are an important task Netflix must solve, some said. The Wall Street Journal reported, "Viewing time is a signal of customer satisfaction and a safety valve that prevents cancellations even when prices rise. That's why viewing time matters for streaming companies."