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The Decay of Netflix

Netflix, one of the most popular streaming services, has come a long way since its inception in 1997. It started as a DVD rental service and later transformed into a streaming service, disrupting the traditional TV business, set by the industry back then when sitcoms and 30-minute drama shows were aired by public broadcasters. However, its journey has not been without challenges. When Netflix emerged to impose a new showbiz model and made Hollywood Majors scramble to face off a new competitor, Blockbuster was in its last years and could not withstand it. Nonetheless, today Netflix has imposed new ways of storytelling —more politically correct than creative—and exploited it to such an extent that there is almost no Netflix original series that is not a copycat of its predecessors; a disgraceful situation that led to a big failure for Hollywood standards and stands Netflix before a dash decay nowadays.

Back in Netflix’s first years, the company created an algorithm to rate movies, showing its clients a customized list of movies they would love to watch. In October 2006, Netflix was ready and strong enough to give Blockbuster the final stand, making it succumb and taking the lead on the best platform to rent movie titles. Finally, Netflix prepared to face the Hollywood industry, that at the time was settled thus:

  • Speaking of TV shows, only HBO or Showtime –settled as restricted TV for matures only– were fearless enough to show violence, gore, or sex on the small screen in titles like Californication (Duchovny, 2007-2014), The Wire (Simon, 2002-2008) or Entourage (Walhberg, 2004-2011); while networks like CBS were running family-friendly shows like How I Met Your Mother (Bays, 2005-2014).

  • Speaking of animation featurettes, the Shrek franchise was shining by the hand of Dreamworks, Cars was premiered by Disney Pixar, and the Ice Age franchise was rising as well.

  • Speaking of superhero blockbusters, Marvel’s Iron Man was in the works, Warner was presenting Superman Returns, and X-Men movies finished their first trilogy with X-Men 3: The Last Stand.

First off, let us acknowledge one thing: Netflix emerged in Silicon Valley, not in Hollywood (McCord, 2014); ergo, Netflix is and will always be an IT company whose most valuable asset is the algorithm that recommends the user what to watch. Netflix is not a production company that emerged in the middle of the San Fernando Valley and whose most valuable asset is the creative minds behind Academy-awarded featurettes.

To compete among the greatest, Netflix started giving a chance to those whose ideas or scripts were not coming forward by Hollywood. This opportunity greenlighted productions like House of Cards, the first TV series produced by a studio for Netflix – with David Fincher as a producer – Club de Cuervos, the first Netflix Original Series in Mexico, and Turbo Fast, the first TV animated series in collaboration with Dreamworks owning the rights of its feature Turbo.

Figure 1: Kevin Spacey and Robin Wright in House of Cards (Netflix, 2013)

After the success that House of Cards represented for Netflix, Ted Sarandos, Netflix CEO, owned the rights to this show that formerly belong to David Fincher, and immediately ordered two more seasons, having no interest in a plotline to follow (Jenner, 2018). All of a sudden, House of Cards became the TV's most expensive series so far. Sarandos' decision was motivated by its algorithm, for the analysis of the first season showed that people tend to watch American Beauty –starring Kevin Spacey– just after finishing watching Spacey in House of Cards.

"Greenlight now, write later" became the unwritten rule of Netflix. This new way of making business on Netflix blew a balloon that went off as a massive cancellation of series with only one season streamed on the platform.

Back in the 90s, HBO developed a brand identity as the home of quality television in the United States, home of productions with an adult, edgy, authored, and high-budget original drama series. This strategy is visible on Netflix as well, with the added value of having mostly teenagers and young adults as an audience. This had as a consequence the adoption of an all-inclusive agenda to fulfil this audience and make room for more and more of this kin. This agenda was subsequently over-used over the years, hence the audience started seeing Netflix as the 'woke' platform, where there's no room for high-end stories, but it is for excessive nude, sex scenes, or every kind of diversity.

Figure 2: The cast of Succession, HBO, accepting Emmy for best drama series over The Squid Game, Netflix (USA Today, 2022)

Netflix's most valuable asset, its algorithm, has become its Brutus; causing its disgraceful fall and the decrease in subscribers who had to realize that Netflix's price was not a balance between its quality. In April 2022, Netflix announced that its subscribers' number had fallen dramatically and that there are decisions to make (The New York Times). Weeks later, Netflix laid off a first badge of 150 workers. Spencer Neumann, Netflix's chief financial officer, later on, announced that the platform may consider allowing subscribers the option to pay less for a version of the service that comes with ads.

A month later of this shocking announcement, Netflix laid off a second badge of 300 workers, and announced a drastically reset of its core values, settling more creative standards for their new original material that is being considered for production in a short term.

Netflix became home to a new agenda era, not only for subscribers but for creatives who seek in the platform some room for stories that couldn't be told in any other production company in Hollywood. Nonetheless, when the subscriber number falls, the room for diversity decays as well and Netflix has told its employees to walk if they're offended by its new culture. According to the portal Fox Business, Variety reported that Netflix has an inner memo within its office where it can be read: "If you’d find it hard to support our content breadth, Netflix may not be the best place for you."

All of this is a consequence of Dave Chapelle's Netflix Special, which was found disrespectful towards the transexual community, a special that Netflix has defended even when it is not on the agenda that Netflix itself has followed for years.

Figure 3: Netflix employees protesting over Dave Chapelle Special (The Washington Post, 2021)

After the COVID-19 stroke, cultural industries had to reframe themselves to adapt in times when people don't want to –or just can't– go out to the theatre (Vlassis, 2021).

The outcome of platforms like Disney+ –Disney's asset to face Netflix's supremacy in streaming–, HBO Max –Warner Brothers'–, or new companies like Apple+ or Hulu, had started a streaming war nowadays, a war that we can't tell who will eventually win, but we do can tell who is already losing it: Netflix.

Bibliographical References

Ash, J. (2022, May 14). Netflix tells employees to quit if they’re offended by new culture memo. Fox Business.

Bennett, J. T., & Lanning, S. (2007). The Netflix Prize. Proceedings of KDD Cup.

“House of Cards,” Netflix’s first original series, starts streaming. (2020, December 1).

Jenner, M. (2018). Netflix and the Re-invention of Television. Springer.

Koblin, J. (2022, June 23). Netflix Lays Off Another 300 Employees. The New York Times.

McCord, P. (2014). How Netflix Reinvented HR. Harvard Business Review, 92(1), 21.

Sperling, N. (2022, May 17). Netflix Lays Off 150 Employees as It Struggles With Subscriptions. The New York Times.

Suárez-Cousillas, T., Martínez-Fernández, V., & Sánchez-Amboage, E. (2019). SVOD Platform Audience. The Case of Netflix, Blockbuster, Hulu and HBO. Iberian Conference on Information Systems and Technologies.

Tillet, S. (2021, April 2). ‘Bridgerton’ Takes On Race. But Its Core Is Escapism. The New York Times.

Vlassis, A. (2021). Global online platforms, COVID-19, and culture: The global pandemic, an accelerator towards which direction? Media, Culture & Society, 43(5), 957–969.

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Carlos Loaeza

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