Netflix blazed the trail, and is now paying the price.
We subscribe to Netflix on and off. We paid for a month back in December - or was that Disney+? Anyway, we bit the bullet and paid $9.99 for another (non-consecutive) month's service in March and it is set to expire this week.
We've watched it about 2-3 times a week, at best. We just don't watch as much television as we used to - the phone has taken up that blank spot in our lives. But with Netflix the problem is compounded by lack of content. Back in the day, they had Movies - troves of them, thanks to a lucrative contract they signed with STARZ - who didn't realize what streaming really meant. Well, that contract expired and the major studios all started their own streaming services and Netflix was starved for content.
They had no choice but to create their own.
And some of it has been very good.
But a lot of it has been forgettable. There are a number of series which were not renewed for a second or third season. House of Cards - the British version - was very good, but no longer available on Netflix. The American knock-off was fine, for the first season or two. Then the "scandal" involving Kevin Spacey and, well, maybe it was best that was the reason to cancel the series before it sucked really, really badly.
I just logged on this moment - the new series they are promoting is a series of live interviews with John Wayne Gacy. Hard pass. This is the best Netflix can do? (Oh, and I just checked, those interviews are already on YouTube for free - not that you'd want to watch them).
That seems to be the depth of their programming - mostly women-oriented films, crime dramas, or "guy in jail is innocent" kinds of series. I'm surprised they aren't trying to do one of those about Gacy.
Of course, like with YouTube, it seems the people running Netflix are bound and determined to destroy the interface. They keep upgrading it by deleting features such as the rating system they used to have. Their argument was that people were down voting some of the videos and as a result, people weren't watching them. In addition to that, they used to have descriptions of the shows so you could see what it is you were going to watch. Now the descriptions are so brief and it's such a small font it's impossible to figure out what it is you're watching. I clicked on one movie recently, and the only description was that it was "based on the book."
So it came as no surprise when Netflix reported they lost 200,000 subscribers last quarter. Granted, they lost 700,000 subscribers in Russia alone, due to sanctions. However, they had projected adding 2.5 Million subscribers, so this was quite a dive. Subtracting the Russian loss, they fell short by 2 million subscribers from projections. Wall Street punished them with a 20% share price drop.
Oddly enough, Netflix seems to be earning a profit, and thanks to the drop in share price, has a somewhat rational P/E ratio of 30 (20 would be nicer in this inflationary era!). If you look at the historic picture, you can see how this stock was hyped in the past - the point where the P/E ratio was over 400. If you look at the corresponding earnings, profits, and EPS charts, you can see there is nothing in the metrics to justify these spikes in share price - profits and EPS remained flat. Maybe the market was buying ahead of itself. Maybe someone was playing games. It is instructive to ponder these charts and look at the historical trend.
Is Netflix dead? Not yet - if it is earning money and generating profits. So long as you make a penny more than your expenses, you can stay in business. In reality, shareholders would revolt long before you get to that point - and insist you sell off the brand or merge or something. We haven't reached that point yet.
Netflix may stay around for the long haul, but it will be a dreary one. Silicon valley sells the dream of quick and astounding profits. People go from college dropouts to millionaires and then billionaires, seemingly overnight. But what ends up happening is that these "next big thing!" inventions become just mundane commercial transactions - if they succeed at all - with lots of competition in the marketplace and margins getting successively thinner and thinner.
So Netflix will soldier on - in this new streaming era, where there are now dozens of streaming services to choose from. And I suspect that I am not the only one to sign up for each service, one month at a time (Disney is now offering discounts if you sign up for a year - they're on to us!). But like Netflix, Disney has one or two interesting programs and then a ton of dreck. It is all kiddie cartoons and old forgettable movies starring Dean Jones.
When it was just Netflix - with the STARZ contract - it was one-stop shopping. Now we have choices, so instead of an Olympic-sized swimming pool, we jump from one kiddie wading pool to another. I suppose you could sign up for all the services, but that would cost more than cable TV!
One thing plaguing Netflix is password-sharing. I am not sure why this is a problem and why Netflix allows it - it shouldn't take but a few lines of code to realize that different devices are logged in to the same account at the same time. My bank seems to know when I log in with a new device or even if I reset cookies on my computer. So why Netflix even allowed password sharing in the first place is beyond me.
Oh, and be sure to hear the hue and cry of the anguished pirates once Netflix enforces its rules. I mean, after all, if one person pays for the service and shares it with 100 other people, that's a big hit to revenue (although granted, many people viewing for free would never end up paying if service was cut off).
But content is the troubling part. As I noted before, we watched this hyped "Bridgerton" series and it felt a lot like a "chick pic" as they call it. I then realized it was based on a series of romance novels and hence why the plot was so meandering and repetitive. If you haven't seen it, I will save you the trouble (spoiler alert!): Boy meets girl, boy hates girl, girl hates boy, blah, blah, blah, they fall in love, love conquers all, and finally get married, about three episodes after you've said "Enough already! Get a room!" Season two is an identical repeat of season one. One of the stars of season one noped out of season two, and I can't blame him. Like any good soap opera, when a cast member asks for more money, they are written out of the plot.
I kept thinking, "I'll bet halfway through this season, they will reveal the whole plot line was a dream sequence!" - but I guess they are saving that for season three. There are like eight books (and six "epilogues") in the series, so this nonsense could go on a long time. Since any show basically jumps the shark after three seasons, I probably won't be watching more of it. Watching the last episodes, I felt I was being manipulated - or at least they were trying to manipulate me - into watching ever-more episodes without moving the plot forward an inch (that is, until the last ten minutes of the last episode of the season when everything happens all at once!).
I watched it, because like any other good soap opera, you want to see what happens next. And every episode, they don't advance the main plot one iota, but bring up all sorts of side-plots and red herrings just to keep you watching. Like I said, I felt manipulated, which is why I was never into soap operas.
I digress a minute, but the show had one other annoying feature: It promoted this false idea that you should hold out for "your one true love!" who was cosmically assigned by God. Many a decent marriage and relationship has been destroyed by this idea - mostly sold to women - that "true love" is the most important thing in the world, and anything less than that is a sham marriage. I mean, you watch this film and think, "Gee, maybe my life is a sham! I never had heated glances across the ballroom with Sir Kensington! I am missing out on so much in life!" It is a destructive message to send to people. Oddly enough, the protagonists in season 2 were from India - the land of arranged marriages - yet they were holding out for "true love" over any arrangement. It didn't seem real. But I digress.
Speaking of soap operas, though, do you remember the soap opera craze of the late 1970's and early 1980's? College kids started getting into soap operas - previously the venue for middle-aged lower-class housewives. It is sort of like our generation's fascination with professional wrestling - also seen as a lower-class low art for the trailer park set. We've sort of dumbed-down our whole society, it seems. Bridgerton isn't Sense and Sensibility, by a long shot, even if both have scenes where the hero rescues the heroine in a driving rainstorm so that she can do a coma scene.
Now granted, Netflix has a few movies here and there - but again, mostly stuff I already have seen or never want to see - much like the other streaming services. I watched "Christine" again for the first time in 20 years or more. This time I was rooting for the car. When Christine ran over those bullies, I was not terrified at the thought of a demonically possessed car, but cheered by the thought of bullies dying a violent and painful death. I guess over time, perspectives change. But I am not sure that 30-year-old horror movies are worth $9.99 a month - even with the added "attraction" of mindless soap operas.
The downside for Netflix could occur if they keep losing subscribers. I suspect the subscriber base will level off over time - indeed, you can't keep expanding your subscriber base indefinitely - that is physically impossible. Once everyone who signed up has signed up, well, there is only one way to go - down. If they lose subscribers - and revenue - then they don't have the cash to make expensive new drawing-room-dramas, and thus content suffers. Poor content leads to more subscriber loss. A recession would undoubtedly accelerate this trend, when people start examining monthly recurring expenses more closely.
The golden days of streaming are over for Netflix. Now they have to do the down-and-dirty job of creating content to attract subscribers. And sadly, this means that Netflix will no longer be the movie vault it once was, but just another television channel airing situation comedies and soap operas.
Les Moonves would be proud.
UPDATE: Netflix announces that to "fix" the problem, they are adding commercials. Oh, so it's free now? Ha-ha. This is like curing a toe fungus by shooting your foot off. Maybe better content, less password sharing, and a better interface?
Nah - more commercials! Netflix is now indistinguishable from Network TeeVee.
Gud-buy! Won't be coming back, for commercials.
