The Accidental Turitz: Need An Identity, Netflix’s Collapse Was A Long Time Coming – Below The Line

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If you’ve paid any attention to this space in the last year or so, you’ll recall that there were a few mentions of Netflix and the inevitability of its decline. From the start, I never believed its business model was sustainable, simply because it required an ever-growing number of subscribers to feed the multi-billion dollar beast. Followers that don’t exist, mainly because there aren’t an unlimited number of people on the planet.

And yet, that’s how the Netflix model worked. Keep pumping money into programming knowing that subscribers would be there, and more every month, even if it weren’t possible to sustain that level of growth. The cavalier attitude with which he threw the dough was acceptable, they said, because the role model supports him. Every month, about another million people would sign up for Netflix, then another country or territory would be added, and then China! And with it, hundreds of millions of additional potential subscribers and more opportunities to create programming for a specific audience.

The model was one that worked quite well for quite a long time, but Ted Sarandos and the Netflix team acted like the ride was never going to end. The numbers would never stop growing! The money was never going to stop flowing! Having billions of dollars in debt was not a problem because the influx of monthly dollars would eventually compensate!

But, if there was any doubt that it wasn’t remotely possible, that pipe dream ended last week, when Netflix announced it had lost 200,000 subscribers just after getting rid of 700,000 in Russia due to the war in Ukraine. Russia’s loss was not serious, as it was considered a bargain, but the loss of the $200,000 elsewhere was enough to raise alarm bells, and the market reacted accordingly, the stock price dropped by 25%.

This comes on the heels of an announcement that Netflix is ​​cracking down on password sharing while finally backtracking on its pledge to never use ads, and will now offer cheaper subscriptions that would include ads. People behaved like bananas as expected, swearing they would die before allowing ads on their Netflix account, perhaps disregarding the fact that they wouldn’t actually have to. do – that it would be a choice and, if the consumer makes that choice, Netflix would actually cost less, but that’s not the point.

The fact that Netflix feels it must making this move, bringing ads and a lower cost model in an effort to generate some much needed revenue, is pretty much expressing desperation in the back row. It’s a desperation that’s been building for years, no matter what the company says, as the streamer’s scattered programming strategy has given viewers ever-diminishing returns.

Card castle

Picture via Netflix

When Netflix was the first real streaming service, it used a lot of licensed programs to bring people to the service, and after it started spending money on original content – starting with David Fincherthe remake of the British series Card castle – he started spending countless dollars to create as many programs as possible for as many different potential viewers as possible. With an infinite number of hours to fill, an inordinate number of series and films were needed. So Netflix just started throwing stuff at the wall to see what stuck.

Therein lies part of the problem.

Can you honestly say what a Netflix Show is? Hulu, HBO Max, Disney+ and even Peacock all seem to have a sense of commonality with their programming, but not Netflix, which is everywhere. He always tried to please literally everyone, no matter what it took to keep people glued to his service. But it has come back to haunt the company, with the overall quality of its TV shows and movies suffering. The cinema side has been particularly difficult lately. As Netflix releases its share of award contenders, from Roma and The Irishman to last year’s tick, tick… BOOM! and The power of the dog, these are woefully outnumbered by the cannon fodder that’s supposed to fill hours – cookie-cutter movies that are forgettable by the time the end credits roll. Often even before. Not that you’ll ever be able to watch the end credits on Netflix anyway.

So where does Netflix go from here? Especially since it should lose another few million subscribers over the next few months? Well, less money is going to have to be spent, which is bad for the streamer and bad for an industry that has seen so many cuts lately. We’ve already started to see cuts in marketing as well as editorial, as at least 10 writers who were paid fairly well to create content for various Netflix verticals were laid off this week, just months after their moving to California. Additional layoffs are also inevitable, unfortunately.

Netflix will also have to find an identity. I actually think the ad model might just attract new subscribers who don’t want to pay $20 a month for the service and won’t mind watching a few ads once in a while. It would be a start.

hubie halloween

Picture via Netflix

The identity thing is key, though. Netflix can continue to do Adam Sandler cheap movies and romantic comedies and melodramas to appeal to a certain demographic, but it also needs to be more targeted and decide if it wants to be a source of prestige cinema. After The power of the dog and less The weekend. Really cater to moviegoers who feel like they’ve been left behind in recent years. Or maybe do the higher mid-budget movies that studios have stopped making because they’re too busy with tentpoles. Either way, a more targeted approach can lead to an increase in quality, and with that, those lost subs will come back and overall churn will slow down.

But as with most things, there’s also a bigger picture here. When Netflix came out the door before anyone else and hit a home run, other streamers followed suit and replicated the pattern. While the other services have mostly honed in on what works for them in ways that Netflix hasn’t, this should still be a giant red flag for them too. If people log out of their Netflix accounts, what will stop them from logging out of other, smaller ones?

If you don’t have kids, Disney+ becomes consumable unless you desperately need to watch Marvel and star wars programming. HBO Max, Peacock, Paramount Plus, and Hulu don’t necessarily have big headlining series to draw people in and keep them there. Amazon is relatively light on programming, but it has the built-in advantage of having the largest online marketplace in the world to help keep people around, so the downsides don’t apply equally.

We live in a time of belt-tightening, and while the pandemic has caused us all to spend more and more time in front of our devices, it has also diminished our disposable income and forced us to be more careful in the how it is spent. Now that people are leaving Netflix in droves, what will stop them from leaving Netflix too?

It may sound alarmist, but it’s not ridiculous. I think all the different streaming services will be busy watching their numbers over the next couple of months, hoping they keep going up. Don’t be surprised, however, if they don’t.


Neil TuritzNeil Turitz is a journalist, essayist, author and filmmaker who has worked and written about Hollywood for nearly 25 years, although he never lived there. These days, he divides his time between New York and the Berkshires. He’s not on Twitter, but you can find him on Instagram @6wordreviews.

You can read a fresh install of The Accidental Turitz every Wednesday, and all previous columns can be found here.

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