Last week was a rough week for Netflix. The company that basically invented modern-day streaming, binge-watching, and kicked off the endless rebooting of shows, is in a world of hurt.
Last week Netflix officially let go 150 employees. On the surface, this may seem like no big deal. Netflix is a giant company with many thousands of employees. The company is losing hundreds of thousands of subscribers. They're seeing their stock slide on all this news. However, there's more to it than that. This is the culmination of a company whose MO led them to catch lightning in a bottle twice and still manage to squander it.
It wasn't long ago that Netflix did something amazing: they brought content to viewers that allowed for longform storytelling and ample budgets. House of Cards, Stranger Things, and Voltron: Legendary Defender are all prime examples of Netflix letting productions do what they want in order to produce the best product. But for every Stranger Things, there is a long path of shows that never saw the light of day on future seasons.
It seems like a switch was flipped at some point to prioritize quantity over quality. Netflix is flooded with tons of content, most of it will never be seen. There's even been jokes that Netflix should launch a "browse endlessly" plan. Right before our eyes we were deluged with a ton of Adam Sandler movies. More and more shows were rebooted. And then the worst of it all: cancelations.
I hear endlessly how The OA was axed before it could gain its footing. There has been endless outcries about Jenny And The Phantoms going a single season. The list is long, but imagine paying for a streaming service to then get hooked on a show that goes a whopping 8 or 10 episodes. Then, the ax falls.
On top of it all, Netflix keeps raising subscription rates and losing some customers in the process. Where they once embraced password sharing, those days look to be coming to a close. But whose fault is it? Netflix wants to think its financial issues are one of the customers not paying their fair share.
In actuality every single aspect of Netflix's "panic mode" is self-inflicted. 200k people canceled their accounts as of last month. Competition is fierce now. Where Apple TV+ was once a joke, it's now a powerhouse of original content. Hulu, Disney+, and Paramount+ are other major players that are looking to eat Netflix's lunch. One big difference: they offer LESS content, but more specialized. Let's face it: Paramount+ is Star Trek. Disney+ is Star Wars and Marvel. Hulu is Handmaid's Tale. As of right now, Apple TV+ is Ted Lasso, but Severance is fast becoming a second tentpole show for the service.
Netflix actually is in the third phase of its existence. At first, it was a DVD rental service with a 7-day window. This model wasn't sustainable so they moved to the now-famous subscription model. Three discs out at a time for a flat monthly rate became something everyone wanted.
In the early days of streaming, Netflix pivoted to being available on Roku devices and spread like wildfire. Now it seems improbable to ever want to rent a DVD from them. Hell, even Netflix tried to spin off its DVD service into something else. The results were disastrous and quickly abandoned. Netflix, by happenstance or by making a big bet, became synonymous with streaming.
Netflix is planning to crack down on password sharing. They plan to introduce a free tier supported with ads. Will this work? It's hard to say. What I do know is Netflix has never faced as stiff competition as they do right now.
I think they were complacent and now don't know what to do. A bit of the "old guard", if you will. Netflix owned the streaming space exclusively for so long, that they now don't know what to do. They lobbed tons of crap onto their service and hoped to keep it valuable. However, they forgot to do the one thing that mattered: act as stewards of stories and see them through to the end. Paying customers won't tolerate getting hooked on shows repeatedly and then having the rug pulled out from under them.