Netflix (NASDAQ:NFLX) saw a massive spike in subscribers in February and March as people everywhere started staying home more amid the coronavirus pandemic. In fact, the entire video-streaming industry saw an influx of couch time, especially after leagues suspended sports and many scripted series ended their seasons early.

After peaking in April, total U.S. streaming hours among Netflix, Amazon (NASDAQ:AMZN) Prime, Disney's (NYSE:DIS) Hulu and Disney+, and Apple (NASDAQ:AAPL) TV+ has started to fall back to Earth, but it's still above March levels. Netflix, being the most popular streaming service, has the biggest influence on total streaming hours. But smaller competitors have displayed some strength, while Netflix viewers show some fatigue.

A family watching TV in the living room.

Image source: Netflix.

Subscriber additions have been key to Netflix's strength

Netflix's declining engagement shouldn't worry investors. Viewer data from 7Park indicates most of the consumers that signed up for Netflix in March aren't canceling. 

Netflix saw average streaming hours across all households climb over 50% in April compared to February. The majority of that growth appears to have stemmed from new subscribers. Average streaming hours per Netflix user grew less than 20% in the same period. 

Importantly, those new subscribers are still sticking around. While streaming hours across all households fell about 13% from April to June, average streaming hours per subscriber fell about the same amount.

While subscribers are watching less Netflix on average, Disney has seen growth in total viewing hours. The average household watched 102 hours of video on Hulu and Disney+ combined in April. That actually climbed to 113 hours in June. And that number should climb higher still after the early July release of Hamilton. The Broadway musical accounted for 22% of streaming hours across all platforms in the first five days of July, according to 7Park. And Disney+ didn't release the film until July 3.

Disney's growth has notably stemmed from growing subscribers as well. Average watch time per subscriber on Disney+ actually declined between April and June, despite a 20% increase in watch time among all households. But it doesn't look like those increased subscriber numbers are coming at Netflix's expense.

Apple TV+ is experiencing the opposite effect. Streaming hours have declined slightly among all households, but those that have kept streaming Apple TV+ averaged more streaming hours in June than any previous month. That may be an indication that Apple is starting to find content that resonates with an audience, but it hasn't found titles with mass appeal. That could change in July with the release of Greyhound starring Tom Hanks, aka America's Dad.

The ultimate measuring stick of the streaming wars

Just after the launch of Disney+ and Apple TV+, Netflix CEO Reed Hastings said time spent will be the most important metric to watch in the streaming wars. And to that end, Netflix is still a dominant force. It accounted for 70% of all household streaming among the services examined by 7Park. When it comes to average time spent per viewer, Netflix reclaimed the top spot in June, after Amazon Prime Video had a few months at the top of the leaderboard.

And Netflix ought to show a strong share of viewing hours going forward. Despite even more competitors entering the market, Netflix is best positioned to keep subscribers engaged through the end of the year with its slate of original content. Management assured investors in the FAANG stock during its first-quarter earnings call that its 2020 release schedule shouldn't see much impact from COVID-19. By comparison, traditional media companies have much shorter production windows before a series debut, so their content slates are more compromised.

While many consumers are decreasing the amount of time they spend with Netflix, and some are subscribing to new services like Disney+, Netflix remains in the dominant position among streaming services when it comes to competing for viewers' time. Both new and old subscribers seem to be sticking around and streaming more, on average, than they do on other services. Investors should see that reflected in its subscriber numbers.