Several months ago, I wrote a post on Facebook sharply criticizing Netflix for raising their prices yet again but not actually improving their product in a way that makes it more valuable to justify the cost. Like most of my Facebook posts, it largely went unnoticed, but the few people who did respond did not seem convinced there was an actual problem. I could now jump on Facebook and say, "Ha! I told you so," but that would probably also go unnoticed. Thanks, Facebook algorithm.
But this is not about Facebook. This is about Netflix. To be clear, I was one of the early adopters. Back when Netflix was shipping DVDs via snail mail, I was there. There were no "originals," only movies, everything from indies to blockbusters (no pun intended, ok, maybe a little). For someone like me who generally hates going to places, it was nice not having to drive to Blockbuster. Yes, I'm old.
Netflix eventually pioneered streaming in a way that had not successfully been done before. Yes, video-on-demand existed, but Netflix was offering movie and TV streaming over the Internet for a low monthly fee. Many people continued getting DVDs for the time being because plenty of movie studios resisted Netflix, despite the fact that Netflix was willing to throw money at them. This was not about money. It was about power and control.
Fast forward to the 2020s, and we can see this power struggle playing out in a big way. Hulu has been around for a while, but make no mistake, it was born with a vendetta, not just a desire for cash. At the time, NBC/Universal, News Corp and later Disney collaborated to form Hulu, not because they loved each other, but because they equally hated Netflix. What we see now are multiple (much more powerful) companies, from Apple to Amazon, replicating what Netflix did, but you also have the content owners like Warner Bros. Discovery (HBO Max), Lionsgate (Starz), Paramount (Paramount+) and yes Disney offering their own subscription services.
If you do the math, subscribing to every major service would cost you more than basic cable, quite a bit more, in fact. It is, therefore, no surprise that people have started picking and choosing which one or two services they are going to use.
Netflix, being the first, has been operating for nearly two decades under the false assumption that no one else offers what they do. Even when the competition increased, they rested easy knowing that their "originals" like Stranger Things put them in a class of their own. But back to my original Facebook post, they really have not improved the quality of content, and their early days of supporting studio creativity, even if it is risky, are long gone. They will now cancel a show within a week if people do not immediately binge watch it. To put it short, Netflix was feeling itself.
Now, Netflix is bleeding subscribers, over 200,000 and falling. Their whole financial model has always depended on the myth that their subscriber base would continue to grow. It is how they convinced investors to let them operate in debt while continuing to pour hundreds of millions into their originals. We now all know that was a myth, and Netflix shareholders are suing the company.
Instead of recognizing they were wrong and attempting to correct, Netflix wants to institute an ad tier, crackdown on password sharing (something they famously encouraged for years) and lay people off.
If you ask people what they want from a streaming service, they would probably say quality content that does not get cancelled after a week, ad-free video, low prices and more control over the interface (I'm looking at you, Autoplay). That is the rub though. Netflix never asked. They really do not care, and there is now no illusion that they ever did. The things that made Netflix appealing have all melted away. They are no different than Comcast, which was famously voted America's most hated company.
Netflix can survive, but they will not do it by continuing down this current path. In this capitalist society, they must compete because, thankfully, they no longer have a monopoly on streaming. 2022 is Netflix's reckoning. How they respond will determine their fate.
