Consumers have a bevy of new streaming options to choose from over the next year, and many investors in consumer discretionary stocks are worried about subscribers leaving Netflix (NASDAQ:NFLX). Disney's (NYSE:DIS) 10 million sign-ups for Disney+ within 24 hours of launching the service earlier this month certainly resonated across the market. Netflix has only added about 10 million U.S. subscribers over the last two years.

But Netflix CEO Reed Hastings doesn't think subscriber numbers are the best way to judge success for the crop of new streaming services. Instead, he thinks it's important to look at how consumers are spending their time.

At the New York Times' DealBook conference earlier this month, Hastings said:

Apple (NASDAQ:AAPL) and Disney's not going to break out revenue for the service. And you'll hear some subscriber numbers, but you can just bundle things in, so that's not going to to be that relevant. So, the real measurement will be time.

An office building with Netflix logo above the entrance.

Netflix's offices in L.A. Image source: Netflix.

Why time is the best measure

With the launches of several new streaming services from large, well-established companies, the competition is looking to attract a lot of subscribers quickly. To that end, Disney has already succeeded. It's also partnering with Verizon to offer a free year of Disney+ to millions of its subscribers. Apple is giving a free year of Apple TV+ to anyone that buys a new Apple device. AT&T (NYSE:T) says anyone with HBO currently will get HBO Max when it launches in May, and it's going to bundle it with its wireless and home internet plans. Comcast (NASDAQ:CMCSA) is giving its cable TV subscribers access to Peacock, and may even offer an ad-supported version of the service to everyone.

Every single one of Netflix's competitors will have a substantial number of "subscribers" within a year. But most subscriptions will be subsidized through bundles and partnerships. It might be worth having Apple TV+ or HBO Max when the marginal cost is nothing for consumers, but is it worth consumers' time?

The amount of time people spend actually engaged with each service is a good indication of the potential long-term value those services will create for their parent companies and investors. If every Comcast subscriber gets unfettered access to Peacock's best content through an ad-supported service, but nobody's actually watching it, then it's not producing value for the company. And if millions of people get a free year of Disney+ through Verizon, but they don't really care about the new originals or plan on rewatching every Marvel movie, they probably won't stick around and pay for the service on their own after a year.

Will Netflix keep growing its share of screen time?

Netflix hasn't historically provided much detail on how much time its subscribers spend streaming the service. One estimate it's shared before is that it accounts for an estimated 10% of television screen time in the United States, equal to about 100 million hours per day. In the same breath, Netflix's management said it competes with the video game Fortnite more than with HBO.

The question investors are trying to answer, then, is whether new services like Disney+, Apple TV+, HBO Max, and Peacock, among others, will take screen time away from video games like Fortnite, veteran streaming services like Netflix, or something else. Netflix may represent just 10% of screen time, but it's a direct substitute for the type of screen time these new competitors offer.

Trends suggest Netflix won't lose that much screen time, if any. Roku has seen average time spent per user on its platform grow quarter after quarter. And it's doing so even as it grows new users at a strong pace, which suggests it's seeing increased time spent across cohorts. Those numbers indicate linear TV, which still accounts for the majority of television screen time, is much more likely to lose share to new streaming services than Netflix is.

The challenge for investors comes in measuring time spent on various services. First-party reports might not be comparable, but third-party reports might miss certain data. For example, if Apple TV+ users stream more on mobile than the average streaming service, data focused on TV viewing could skew the comparison.

That said, a metric shared by a company ought to be comparable to itself from prior periods. So if Hastings believes time spent is the ultimate measure of success in the streaming wars, he better be willing to share updates with investors on a regular basis.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.