Netflix’s Recent Crisis Shouldn’t Come As A Shock

It Certainly Hasn’t To Me

The people behind Netflix can’t chill any longer.

I am not the kind of person who delights in schaudenfraude. I’m the kind of person who doesn’t wish ill even on his enemies — a rare quality for a critic. But I am not immune to taking a victory lap when a theory that I have believed for a very long time has finally been proven. And given the current crisis that Netflix is facing, I think I’m entitled to do so.

Netflix’s stock has spent the last week tanking, announcing huge quarterly losses and the lack of growth for the first time in a decade. This apparently has come as a shock to the business world, but honestly not to me. I’ve been waiting for a day like this for a long time; I’m just surprised it took so long for Netflix to get to this point.

For years I have railed against binge watching, the process that Netflix basically invented when it came to original programming. I’ve modified my opinion on it over the years; I still don’t think it’s the best way to enjoy television, but I can understand why people who don’t have the time would need to do it. However, I always considered a deeply flawed business model for any service to operate on.

One of the major reason is I think it doesn’t work for the idea of television as a communal experience: whatever I personally may think of Game of Thrones, it worked in large part because it was an event that people could talk about week after week. And the reason that so many of the great series of the 2000s worked was because we were talking about them week after week. We wanted to discuss everything that happened around The Sopranos and Lost and Mad Men, and appointment television let us.

Netflix never did that. No matter how many people may have loved House of Cards or Orange is the New Black (I’m going to get to that in the next paragraph) the ability to binge watch a series at your convenience takes away that spirit of community that made so much of the television experience great. A quote on line sums that up: “You talked about Game of Thrones for months; you talk about Ozark for fifteen minutes.” And not having that shared experience doesn’t help.

Assuming of course, millions were sharing that experience to begin with. For years Netflix has been the only source for telling the world how many people are watching a given series. This has always struck me as shady from the get go — like a drug sponsoring a scientific study saying that same prescription is safe for consumption. During 2020, we found out that in fact, this rubric was untrustworthy as it seemed. Netflix has been based the number of viewers on anything that airs on its service entirely on whether or not you watch it for ten second. In other words, if you just watch one minute of The Crown, it counts the same as if you’ve binged an entire season.

We shouldn’t have been shocked by this. The numbers that have come out of Netflix for series have been sounding inflated since the start. Do we really believe that fifty million people have been watching Stranger Things? We can’t that many people to vote in an election. And the numbers we have been getting have been absurd — Netflix recently announced that combined viewers have watched 50 billions minutes of the second season of Bridgerton. Honestly, why not just that eleventy kajillion people watched the season? It frankly would sound more believable.

And the answer to a business model that doesn’t seem sustainable has been for Netflix to just keep throwing shows on the Internet and seeing what sticks. SNL actually parodied this a few years back and it’s actually pretty accurate in hindsight. I don’t know how many original programs Netflix has right now — one hundred fifty? Two hundred? — but it’s a number that even the biggest TV fan could never keep up with? Netflix almost single handedly contributed to the glut of television everywhere and each year adds more series. They have to, because all of there show don’t run that long — the average run for a series on Netflix is three years by design. Now maybe this adds to creativity but it’s not a very good long term business model. And that’s assuming these are all good, which I’m willing to be eighty to ninety percent just aren’t. Those are, of course, just the successful ones: I have no idea how much experiments like Baz Luhrman’s The Get Down and The Dark Crystal series ended up costing the service before they were cancelled after one season.

It actually makes you wonder where Netflix has been getting the billions of dollar they are sinking into these programs. They seem based on the idea that Netflix was just going to keep growing sustainably forever — sort of a streaming Ponzi scheme. That might have been plausible when Netflix was the only game in town. But now services like Amazon, Hulu, both its regular service and FX, Paramount + Apple TV and HBO Max are all out there with more options. And by having fewer series and more importantly, leaving room for ad revenue, all of these services have time to invest in their shows and more importantly, allow them to air at a more measured pace. On most of these services, episodes do not drop all at once. Some even are willing to air an episode a week a method that many showrunners — like Matthew Weiner — have said that they would only work on a streaming service if that was allowed.

Netflix’s answer to this has been to pull out their checkbooks and throw money at big names. The problem is, of course, not even Shonda Rhimes and Ryan Murphy can guarantee that they will produce a hit every time. For every Scandal, there’s a Rebel; for every American Horror Story; there’s a Scream Queens.

And Netflix has tried to compete in the film industry claiming it has been able to the greatest directors and actors available. To be clear, this says infinitely more about the state of movies today then anything about Netflix’s granting artistic freedom. Does anyone honestly believe Martin Scorsese chose to debut The Irishmen on Netflix because he liked Peaky Blinders so much? Studios only seem to be interested in superhero movies these days, and no one wants to give even Scorsese a chance to make a movie any more. And that’s not counting the mess of independent films: Marriage Story and Power of the Dog wouldn’t be Netflix property if smaller films studios would give directors like Noah Baumbach and Jane Campion the freedom they deserved.

Anyone with a sense of reality would know that Netflix was going to finally hit a wall. Last week, they finally seem to have to hit. So what do they do going forward? Based on what I’ve heard on the net, they’re probably not going to change direction until they hit rock bottom.

I know; this kind of market drop doesn’t count as rock bottom? Financially it may. But they’re not going to hit until they do creatively. That’s going to come in a couple of years when Stranger Things and Dead to Me and Russian Doll and The Crown are all gone and all the money in the world can’t buy the showrunners they need to get the volume they had before. At that point, there are two things they should to do to save themselves and because they’re counterintuitive they’re going to resist. They need to make fewer shows over the course of the year and not release all the episodes of them at once.

Honestly, these solutions are so obvious I think they’ll pull against him. When Amazon started to embrace original programming, it was at a small scale: the first year they went in they only had four series eligible for Emmy consideration in 2015: Transparent, Mozart in the Jungle, Alpha House and Bosch. They did build up gradually year by year, but never to excess and never keeping series on too long; even now, they rarely have more than a dozen original series airing over the course of a season. Hulu has followed that same model and has a similar number even now, Apple TV is sticking close to it and HBO Max hasn’t gone over half a dozen in its first year. Granted all of these services have other sources of revenue and forms of entertainment, but they’ve stuck to that model creatively.

For the last six years Netflix has never stuck to that model: they always seem to have twenty to twenty five eligible series every season and that’s not counted the number of limited series they have running. When services like Amazon and Hulu send out their series for awards consideration, they could fit a yearly collective output in a DVD case. Netflix would need a bookshelf for one season. That’s not just bad business creatively, it’s bad business financially. Not even at the height of Broadcast TV dominance did any of the big three try to premiere more than fifteen to twenty shows in a season; it was too much of a drain financially. To have this many series on in a year and keep adding to it every year, no service, no matter how rich, could survive with that.

As to staggering their release schedule, one can argue this has already hurt Netflix creatively. Matthew Weiner only went to Amazon with The Romanoffs when he received assurances that they would stagger the release, a guarantee he would never had gotten from Netflix. And some of the deans of television — I speak of Vince Gilligan and David Simon — have said they’d never put a series on a service that drops all its episodes at once. Rhimes and Murphy are known for creating hit TV, not always Peak TV and you can argue that in Rhimes’ case in particular — a showrunner used to dropping bombshell after bombshell on her series — would be far better suited to Netflix. But it’s hard to argue that Bridgerton or The Politician is anywhere near in quality of even lesser Peak TV like Mr. Robot or The Deuce.

In a way, Netflix is starting to accept the latter: the final season of Ozark was scheduled to be released in two parts: the second half dropping this week. But they have to go further and embrace what every other service is willing to accept.

Now it may seem like I’m shitting on Netflix, which isn’t true. Over the last decade, I’ve loved much of their original programming: I love The Crown and Stranger Things. I loved comedies like The Kominsky Method and Master of None and Dead to Me and intend to rave about Russian Doll soon. I love limited series like Unbelievable and The Queen’s Gambit and Maid. And I will eventually get around to Squid Game.

But don’t pretend that all of your series are like that. Don’t pretend that all of it is even Grace and Frankie or Peaky Blinders. You put on so many series so fast that there’s no time to watch them all or even notice them. When a truly brilliant show like Bloodline debuted, it was drowning under so much attention to Orange is the New Blank and Unbreakable Kimmy Schmidt that no one could have even noticed it. I don’t know if the cliché ‘ninety percent of everything is crap’ applies to Peak TV, but there’s so much on Netflix it’s hard to believe it isn’t. Quantity has never equaled quantity, but the way you guys turn out programming, it’s hard to believe you don’t hold that to be the case.

You have to turn it down a notch, if not only for your company’s sake than surely for the members you’re desperately trying to hold on to. It’s hard enough to keep track of everything on cable; how can you hope to do so on a server that is premiering a new series every day? Netflix’s problem isn’t that people are sharing passwords on their membership; it’s that you have so many shows; eventually you were going to run out of enough eyeballs to watch them all. I know the whole purpose of the internet seems to be sustainable growth, but your method was never going to be sustainable. The only way to try and help yourself is take a breath, and reduce.

At least that’s my suggestion. It may not be as advisable as the strategy that has brought you The Chilling Adventures of Sabrina and Ghost in the Shell and Ratched, but you might want to consider it anyway. Or hell, if all else fails why not embrace the punch line of another SNL sketch involving lunatic advertisers with insane pitches: ‘Netflix: We do porn now.” Probably get more viewers than Halston did.



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David B Morris

After years of laboring for love in my blog on TV, I have decided to expand my horizons by blogging about my great love to a new and hopefully wider field.