Netflix Kind of Sucks Now

You may have heard that Netflix took a bit of a nosedive on the stock market the other day. Shares fell more than 35% after the streaming service announced a loss of about 200,000 subscribers and expects to lose another 2 million by the end of the year. The company attributed this to a few factors: people sharing passwords, the war in Ukraine, inflation concerns, and the lifting of many pandemic restrictions. But I think it’s a lot simpler than that: Netflix kind of sucks now.

Let’s go back to the late aughts. In 2007, Netflix launched its streaming service. They had already destroyed the movie rental business with their DVD-by-mail service and were looking to expand and future-proof their company. Streaming was a relatively new thing and there wasn’t a huge market using it at that time. Movie studios and production companies were more than happy to sign over the streaming rights to their IP for a little extra cash. Netflix got some great titles for a song during this time. But the deals were limited and as streaming became mainstream, they realized they’d need to produce their own content to compete with companies who were taking their content back and launching services of their own.

Their first big hit was House of Cards. That came out in 2013. A few months later they hit gold again with Orange Is the New Black. People couldn’t get enough of Netflix. Between 2013 and 2014, revenue jumped by more than a billion dollars and the share price nearly doubled. The company continued to invest in original programming spawning hits like Stranger Things, Grace and Frankie, Ozark (which I’ve never seen and probably never will but lots of people like it), and Narcos. They also bought the rights to hot IP, like Marvel, and produced several miniseries that culminated in an Avengers-lite one-off The Defenders. They also spent money reviving older shows like Arrested Development and bringing foreign series to American audiences like The Crown and Peaky Blinders. Then the pandemic hit and people started raving about documentaries like Tiger King, true-crime series, and outsider content like Squid Games. They also invested heavily in buying standup comedy specials from Dave Chappelle, Michelle Wolf, and Jerry Seinfeld. Everything seemed to be going well for Netflix.

But lately… things have taken a downturn. For me, it began in 2019 when the company announced (or leaked, depending on your perspective) that they typically only want to produce 2-3 seasons of any given show. After that, they get really expensive and don’t really add a lot of value to the company. Why would I invest my time in a series knowing that it’s not going to be around very long? One of the longest-running shows (by season length with eight) is The Ranch, which I have never seen and don’t know anyone who has watched it. There are a couple of shows with 6 seasons but not much more. The average seems to coincide with their stated goal of only 2-3 seasons.

There’s another problem with Netflix though. They take WAAAAY too long between seasons to release new material. Take Stranger Things. There was a two-year gap between seasons 2 and 3. And there will be a three-year gap between seasons 3 and 4 (also the final season). And sure. You can blame the pandemic if you want to. But this was happening before the world shut down. Look at Arrested Development. People waited more than seven years for the series to be revived (going from Fox to Netflix). And it was a massive disappointment when it finally came out. The show was super disjointed and jumped around in time. It felt little like the original and was not received well. To counteract this, they re-released the season once more but presented it in chronological order. That didn’t help things much. People, like myself, held out hope that perhaps season five would be better. And after a long five-year wait, it wasn’t.

Netflix relies heavily on algorithms to determine its programming. If something is getting a lot of views, then they order more of it. If something isn’t, they avoid it. This has worked for the majority of television history. But what made Netflix special when it began making original content was that it took chances on things that mainstream TV couldn’t provide. They weren’t beholden to advertisers so they could make content about whatever they wanted. Their only interest was making sure people kept subscribing. That’s it. And for a long time, it worked well.

But as things tend to, the cost of doing business went up. As their number of subscribers was naturally limited by circumstances, Netflix had to find more ways to make money. Streaming is dependent upon a number of factors. First, customers need to have access to high-speed internet. Next, they need a way to watch the service (either through a box like ROKU or AppleTV) or a smart TV. Last, they have to have access to a credit card to be charged monthly. And while the majority of Americans probably have these, the motivation to subscribe might not be there.

The cost of the subscription has risen pretty steadily since 2014. What originally cost between $8-12 per month now runs anywhere from $16 - $20. That’s a pretty big jump in not a lot of time. And sure, the company has invested in A LOT of programming over that time. But that doesn’t really matter to consumers. All they care about is “how much do I use this thing” and “how much does it cost a month?” There seems to be a natural point where anything more than $9.99 a month makes a person pause before subscribing. That’s probably why most streaming services clock in around there or less.

There’s another factor to be considered here and that’s competition. When Netflix started, they were pretty much the only ones in the streaming game. But now? There’s HBOMax. There’s Disney+. There’s Hulu, Discovery+, Paramount+, Amazon Prime Video, YouTube Premium, and many, many others. (As an aside, what’s with all the + naming? Seems weird to me.) With each of those costing less than Netflix to subscribe to and all of them having good-to-great content, that monthly bill adds up fast. And when you look at all of the charges and Netflix is the biggest, it’s the easiest one to cut.

The content is still pretty good but I find I don’t watch it nearly as much or for as long as I used to. I’ve got other stuff to watch, like Bones on Hulu. We quit Netflix for a month or two a little while back because we hadn’t even logged in for several months. I can usually live without their stuff. But Netflix has a serious issue on its hands going forward.

I see a couple of paths for them to take. One, they can cut costs and reduce the subscription cost. I don’t see this happening anytime soon. Two, they can add a cheaper tier and have ads. This seems to be the most likely option and they might even be exploring it. Three, they can reinvent the wheel once more. How? Well, if I knew for sure I’d be rich. There are some ideas out there. One thing I think they need to explore is adding live programming. Like sports. Imagine if they outbid Apple for NFL Sunday Ticket. I’d pay to watch that. Or any number of other sports leagues. They could buy the rights to big award shows, like The Oscars. If they wanted, they could challenge ESPN and scoop up lots of smaller-tier leagues to expand their audience. They created the world of streaming. Maybe they can create a new world of live entertainment.

All of this taken together leads me to one conclusion. Netflix kind of sucks. The content is still good but it’s expensive and there are lots of other services to watch. There’s not a major factor that brings me to the service, aside from the occasional comedy special or favorite series releasing new material. In reality, I should only subscribe for a month or two each year and enjoy other stuff elsewhere in the meantime.

Heck, it’s all going to be there waiting for me when I return.