# Netflix needs a mobile format as viewing shifts to social video

Markdown copy of https://realalpha.app/s/netflix-needs-a-mobile-format-as-viewing-shifts-to-social/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Ed Elson](https://realalpha.app/people/ed-elson/) (Host)
- Host: [Scott Galloway](https://realalpha.app/people/scott-galloway/)
- Show: Prof G Markets
- Episode: [The Stock Market Is Already Pricing In A Democratic Sweep](https://realalpha.app/v/zvYLy3WrK2c/), Nov 2, 2026
- Moment: 1:03:54 to 1:12:25 of the episode (9 min), playing on https://realalpha.app/s/netflix-needs-a-mobile-format-as-viewing-shifts-to-social/; the episode from there: https://realalpha.app/v/zvYLy3WrK2c/?t=3834

## Quote

> “average viewing time per member on Netflix has **fallen 26**% in the past three years.”
> — [Ed Elson](https://realalpha.app/people/ed-elson/) at [1:06:16](https://realalpha.app/v/zvYLy3WrK2c/?t=3976) · Prof G Markets

## Takeaways

1. Netflix viewing time per member has fallen 26% in three years.
2. Social platforms rely on user-made content, not a $20 billion studio budget.
3. Scott argues Netflix should add short-form mobile content and trim spending.

## About this segment

Ed Elson cites Netflix viewing time down 26% in three years as creator-led platforms pull attention. Scott says Netflix needs mobile short-form content and a lower content budget to respond.

From “The Stock Market Is Already Pricing In A Democratic Sweep”, Nov 2, 2026. [Watch the full episode](https://realalpha.app/v/zvYLy3WrK2c/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[1:04:07](https://realalpha.app/v/zvYLy3WrK2c/?t=3847) I think this is the perfect encapsulation of what the problem is for a company like Netflix, because it says a lot that we are immediately down to do this. It tells you something about the way the media ecosystem works today, which is that it's not about contracts. We're not inking deals with Netflix or even YouTube. we're just trying to get our stuff out there. Wherever there are eyeballs, wherever there's attention, that's where we're trying to go. And we're not alone in that. That is the way most of this works. And so to me, this is an indictment of the traditional production.

[1:04:47](https://realalpha.app/v/zvYLy3WrK2c/?t=3887) budget model and, honestly, the traditional streaming model. And this shows you where things are headed, which is that it's all going into a user-generated content direction. Like, you've got Netflix's production budget of $20 billion. Compare that to Meta's production budget of literally zero, because it's the users that are making the content. And I think that, you know, that might sound counterintuitive. Like, why? I mean, Meta doesn't pay its creators.

[1:05:15](https://realalpha.app/v/zvYLy3WrK2c/?t=3915) that's a striking thing how is it that there is literally billions of hours of content that is being produced every day on that platform despite the fact that meta isn't paying them the reason that that is happening is because people think of media differently and the reality is people on instagram people on reels people on people people on tiktok too they want to get famous and they want to get followers and they want to get likes and that in and of itself is a market that is an ecosystem that drives more production, more user-generated content. And it's something that Meta has been able to exploit. In addition, they're basically telling people like us, you guys figure out how to make money yourselves. We're not going to pay you an ad share program.

[1:06:03](https://realalpha.app/v/zvYLy3WrK2c/?t=3963) You guys go figure it out. Figure out your third-party agreements. You can negotiate your own deals by yourself. You guys are adults. Handle it yourself. That's exactly what we are doing, is what we've done with our YouTube model as well. And I think it's what a lot of other creators are going to be doing as well. And all of this means that that viewing time number for Netflix specifically, which has been falling quite precipitously over the past several years, average viewing time per member on Netflix has fallen 26% in the past three years.

[1:06:35](https://realalpha.app/v/zvYLy3WrK2c/?t=3995) That's going to keep going down. And I think it's really, really tough considering that Netflix stock is already down 44% in the past year. We know that they're getting killed by YouTube in terms of TV viewing time. And I think this really begs a very important question for Netflix, which is what are you going to do about this? What is your plan? Because you're living in a very, very different world from what the world was five years ago. You used to be competing with HBO Max.

[1:07:06](https://realalpha.app/v/zvYLy3WrK2c/?t=4026) You're competing with Meta, TikTok, YouTube. This is a very, very different media ecosystem. and I'm not totally sure what the answer is. I have been noodling on. on some ideas. But, you know, if you're on the Netflix board and you see this headline, what do you think and what do you do? Netflix faces an existential crisis of being lumped into media companies that are struggling, like Disney, that gets commands two times sales in the marketplace versus it's at five now and it used to be at eight or 10 because it was considered a tech company. They have to find either a choir. You know, I initially thought, why wouldn't they merge with NBCUniversal?

[1:07:47](https://realalpha.app/v/zvYLy3WrK2c/?t=4067) they can go into parks. And I thought they don't want to be in the media business. They want to be seen as a tech company with a media platform. I think it's got to be something around trying to, as you put it, start to own or get into the clip economy. And that a short form video that plays well to a phone. You know, my idea was open source kind of TikTok with their 99% long tail content. But they're in a difficult spot. I think that they're basically saying we need better content, that we haven't had our K-pop demon hunters.

[1:08:16](https://realalpha.app/v/zvYLy3WrK2c/?t=4096) I actually think the content's really strong. I'm watching East TV and I think it's fantastic. They're saying when they fired Bella Bajaria, they're saying we have the wrong cook and no one's eating at a buffet. And my analogy is I wonder if everyone's gone vegan and that it's just fewer and fewer people are willing to sit down. I won't invest an hour in anything that doesn't have 90 plus percent on Rotten Tomatoes.

[1:08:40](https://realalpha.app/v/zvYLy3WrK2c/?t=4120) I mean, the bar is just becoming so high for what you're actually willing to spend that time on also and this is just anecdotal but i think it does show up in the earnings of meta i find that the best use of ai to date that people aren't really talking about is one that's invisible behind the curtain and that is i believe instagram reels literally deploys ai to turn your brain inside out it's as if it knows what i want before i want it and i'm just i can't get over like i felt that way five or seven years ago the first time i was on tiktok i'm like how did it figure out i like great danes like how did it how did it find some weird economist in south africa talking about income inequality that i would be interested in like how did it pick up on this i believe the algorithm everyone said oh tiktok it's about the algo right i believe the in the

[1:09:38](https://realalpha.app/v/zvYLy3WrK2c/?t=4178) algorithm now at instagram courtesy of of the capex and ai is dangerously addictive I think it is so good right now. And when they apply that to content that competes against YouTube, wow, I'm really curious to see how these wars play out. But Netflix, I was actually looking at Netflix as a buy because I think the management team is so strong and a built-in user base, but they don't want to consolidate with another media company because it just cements them as having the same problems as everybody else.

[1:10:15](https://realalpha.app/v/zvYLy3WrK2c/?t=4215) they have to serve up a different type of food here they have to get into short form that is really mobile friendly because the other thing that's just hard to ignore is that in the things are going really well in the sense that the the flow of capital has been pretty much one way and that is it's been from a bigger screen to a smaller screen to the smallest screen right in general i know movies will pass 10 billion dollars for the first time, fine. It's a dead cat pounce. Movies is a shitty business. Television, still a huge business, maybe not growing, flat, fine, whatever. Any great content on a phone, champagne and cocaine, right? What's interesting is the biggest screen is actually doing really well right now, and that is the screen of IRL, right? Going out, concerts, meeting people in real life,

[1:11:06](https://realalpha.app/v/zvYLy3WrK2c/?t=4266) that's actually picking up, which is a really encouraging sign. But this ecosystem, I think that i think that i'm summarizing but i think meta meta doesn't even look at netflix meta is going to go after youtube and in general just what this is showing is that our brains we are evolving a new species of people who just don't have the attention for to justify to create the consumption to justify the cap or the amount of money that's gone into content we were saying this two or three years ago like how can they sustain this investment in content and original content. And the answer is they can't. So I think it's only a matter of time before Netflix one announces, you know, innovation acquisitions, developments of new things that give people a different type of food. Also, I think what's coming, they're going to announce they're going

[1:11:56](https://realalpha.app/v/zvYLy3WrK2c/?t=4316) to reduce their content budget. They just can't. They're in the arms race and they've probably gone out too far. Twenty billion dollars. Anyways, I don't. So the answer is I don't know what they do other than trying to get into short form content and start to cut the content budget.