Netflix faces unexpected challenge as streaming prices soar, customer interest shifts

I’ve been hooked on Korean dramas for years, but lately my Netflix viewing has expanded well beyond fictional K-dramas.

From watching both seasons of Culinary Class Wars to keeping up with the latest season of Single’s Inferno, I’ve found myself spending considerably more time on Netflix.

Then there are shows like Better Late Than Single and the rather bizarre Kian’s Bizarre B&B, for which I had to switch between different platforms earlier.

My Netflix consumption has increased so much that I even switched to an ad-free subscription.

And now there is data to prove that consumption has definitely increased.

During the first half of 2026, Netflix viewers consumed over 97 billion hours of programming, the entertainment giant’s highest 6-month total on record.

However, a subtle shift in viewing habits suggests Netflix may need to work harder to sustain this engagement, especially as competition intensifies for eyeshare and streaming prices increase.

Netflix faces a surprising challenge as streaming costs rise

So, while global viewing hours are a record for Netflix, according to a recent Morgan Stanley research note shared with TheStreet, they increased just 2% year over year during the first half of 2026.

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Morgan Stanley analysts Sean Diffley and Daniel Duran, in their report titled “Ice Age: Dawn of the Dinosaurs?” pointed to stagnant viewing hours and the absence of a major English-language breakout hit as concerns.

Not to forget, competition is intensifying.

According to Nielsen’s July 2026 report, YouTube captured a record 14.2% of U.S. television viewing.

Unlike Netflix, YouTube can draw on an enormous supply of creator-generated content without the same production costs associated with premium entertainment.

Netflix, meanwhile, has a content budget exceeding $20 billion, according to Morgan Stanley.

But keeping viewers engaged isn’t its only challenge. Streaming subscriptions have become considerably more expensive.

If you’ve felt you’re spending more on your monthly budget, one likely reason is the rising costs of streaming services.

According to Deloitte’s 2026 Digital Media Trends study, the average U.S. subscribing household spends $69 monthly on streaming video.

The study also found that 73% of consumers are frustrated by rising entertainment subscription prices, while 61% would likely cancel their favorite streaming service after a $5 monthly increase.

How much popular streaming services cost in 2026

I created a table to compare the costs of different streaming services, including the with-ads and ad-free versions:

The table was created using publicly available prices for these subscriptions and is before any taxes or discounts. 

The Amazon figure is the monthly equivalent of its $139 annual Prime membership, which is the ad version. The Prime Video ad-free version costs an additional $4.99/month or $45.99/year.

Now, consider a household paying for just three ad-free subscriptions: Netflix, Disney+, and Apple TV.

Together, these cost $56.47 monthly, or $677.64 annually. Add Amazon Prime, and the total comes to $816.64 per year, or roughly $68 per month.

And if you thought those subscriptions were cheaper when you first signed up, yes, you are right, and the numbers back it up.

How streaming subscription prices have changed

Higher prices aren’t the only change consumers have faced.

In 2023, Netflix began restricting password sharing outside subscribers’ households, requiring people living elsewhere to purchase separate subscriptions or use paid extra-member arrangements.

I was not happy about it as I had a shared account with friends in different US cities.

Still, not everyone is cutting back.

Deloitte found that entertainment fans spend an average of $71 monthly on streaming services, compared with $56 among nonfans.

This does help explain why Netflix is investing heavily in programming for different audiences.

Netflix expands Korean reality shows and Indian programming

Netflix’s investment in Korean entertainment has become an important part of its strategy.

In 2023, the company announced a $2.5 billion investment in Korean content over four years, covering films, fictional series, and unscripted entertainment.

Its 2026 Korean lineup includes a third season of Culinary Class Wars, as well as returning reality shows and new dramas.

The appeal extends well beyond South Korea. 

Netflix reported that the Korean series Teach You a Lesson attracted 48 million views during the first half of 2026.

Also, K-Pop Demon Hunters remains Netflix’s most-watched and most popular film. 

India is another growing market.

Netflix is expanding into regional-language entertainment, offering comedies and reality shows such as Chumbak, The Great Indian Kapil Show, and Lock Upp.

Morgan Stanley estimated that Netflix’s viewing hours in India increased 25% to 30% year over year during the first half of 2026, supported by local programming.

Netflix is also bringing familiar Hollywood favorites to its subscribers.

Morgan Stanley highlighted a Disney licensing deal that brought all five Ice Age films to Netflix. According to the report, all five reached the platform’s U.S. top 10.

These moves, alongside live sports, games, and video podcasts, could give viewers more reasons to return between major original releases.

Morgan Stanley sees an opportunity despite Netflix concerns

Despite slowing engagement growth, Morgan Stanley remains optimistic.

The firm estimates Netflix delivers approximately 110 minutes of domestic streaming per subscriber each month for every dollar of revenue.

This compares with 96 minutes for Amazon Prime Video and 87 minutes for Disney’s streaming operations.

Advertising also offers growth opportunities.

Morgan Stanley expects Netflix’s advertising revenue to climb from approximately $1.6 billion in 2025 to $4.8 billion in 2027.

So whether or not you are subscribing to its ad-free tier, Netflix will still make up for it with ad revenue.

Netflix also plans to expand its ad-supported offering into 15 additional countries, giving more consumers a lower-priced subscription option.

Morgan Stanley may have lowered its Netflix price target to $80 from $83 while maintaining its Overweight rating.

But the firm expects double-digit revenue growth and improving profitability, given that Netflix continues to give people enough reasons to stay subscribed.

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