In the context of the full sentence, the audio for смотрю sounds correct. But if you play the audio for the individual word, it sounds a little more clipped -- I think it's still saying смотрю but I can see why someone could hear смотрим instead; it does sound very close.
Why is this 'are you watching' and not 'do you watch'? I've now seen this exact same verb construction so many times, each translated in a different way, some with the -ing meaning and some not. They have such different meanings - how do you know which is implied?