Do you know what the headlines about Netflix’s 2nd quarter earnings report should say? Netflix has more streaming customers than any other service in the world by far. Yeah, that’s the truth. And it’s not even really close. I know that people like to point at Amazon and say it is number 2. But there is really no evidence that it is. Because being an Amazon Prime member does not equate directly with being a video user. Prime has a huge library of content and some fantastic originals. But prime is a hugely popular multifaceted service providing free shipping for orders from the biggest online retailer in the world, free music streaming via any Alexa speaker or streaming device, Kindle perks and, free Twitch perks and the list just goes on. It is easy for a person to use Amazon Prime every day of the year without ever streaming a second of content just by playing background music while they work and order new socks online. That is the genius of Amazon. On the other hand, every one of Netflix’s over 200 million plus customers is a video subscriber. So let’s stop. It’s not an apples-to-apples comparison or an apples-to-oranges comparison. It’s like comparing apples to cars. Netflix’s real competition as far as market share in the paid premium video space is Disney-Hulu with a growing threat from Warner Bros Discovery. Those are media companies that also offer wide-ranging streaming content without also being a grocery delivery service and music service, and a hardware store, and a clothing store, etc. Netflix is a trendsetter and made the streaming industry what it is. And growth by others in the marketplace does not mean that it is dead in the water.
It Doesn’t Matter What We Think
I have seen some in the press say some very derogatory things about Netflix content over the past few years going using language that I consider unprofessional at best. And you know what? I think they do that to stand out by building some kind of “Yeah I said it” reputation. Look I just cussed about Netflix I’m so provocative. One day I would like to see one of those columnists sit down with Reed Hastings and say, thanks for giving me and my small industry-facing newsletter some time. Why is everything on your service so s%$y? Man up guys.
People get on these rants and ignore that some of Netflix’s content is wildly popular, just like the content on other streaming services. And some of it is not. Just like the content on other streaming services. But can someone really say that is objectively bad without actually watching it? There is no way these demonstrative critics of Netflix have watched most of these original titles. There is not enough time in a day to do so and also eat, sleep and write negative takes on Netflix. Netflix has produced thousands of original programs. From new scripted series, full-length movies, reality competitions, stand-up comedy specials, documentaries, biopics and more. How many big hit new original shows has ABC launched over the past 3 years? NBC? CBS? HBO? Think about it. When I say “Hulu Originals” what are 10 movies or TV shows that come to mind? The Handmaid’s Tale, Only Murders In The Building and um that one with the girl from Two Broke Girls that time traveler one with the guy from Hunger Games and …. Here is another one. What are the top 5 Hulu shows that debuted in 2021? What is your favorite show on Disney+ not based on the MCU and Star Wars? Can you tell me the name of the Jon Stamos show where he plays a girl’s basketball coach without looking it up? What is Delicacies Destiny about? Because I am sure all of Netflix’s loudest critics have seen every episode of that one. Does that mean that those shows are poorly done or unwatchable? No. It means that there is not a cottage industry of bloggers and genre-based websites publishing fan theories about them 5 times a day.
This is not an attack on Disney. My family loves Disney+. My family loves Amazon Prime for that matter. But what I am trying to say is that to pretend like every other service out there is a hitmaker just because a show or two gets tons of headlines and ignore Netflix’s impact on the industry is idiotic. Netflix just pops things out of nowhere with no major IP to build on. Squid Game, Stranger Things, Red Notice. It takes lightly regarded material and makes it a household name like The Umbrella Academy, Peaky Blinders, Bridgerton, and The Witcher. It makes shows that went nowhere on other networks or services into pop culture hits like Cobra Kai and Manifest. Netflix never had its own version of Baby Yoda. But neither did anybody else. And even the other Star Wars content has failed to live up to that standard so far, on the small screen and big screen for that matter.
Look, Netflix may collapse under its own weight. That can happen with any media company. But it’s not a streaming service full of crappy TV shows and original movies that nobody watches. It is a service that produces more original titles than anything else in the industry that needs to do a better job of promoting its lesser-known material. The fact that Apple TV+ is the home of one pop culture sensation, Ted Lasso, does not mean that Netflix “Sucks”. Hey, how many customers does Apple TV+ have that do not get the service for free because they just upgraded their phone, computer or iPad? Is it anywhere close to say, 50 million subscribers, which would be less than a quarter of Netflix’s flagging numbers? The fact that AT&T could not figure out how to work with Warner Media and spun the whole thing off to Discovery making a much larger TV and streaming operation does not mean that the new Resident Evil show on Netflix will not revitalize the entire franchise and put Netflix right back in the headlines.
The Netflix is dead headlines are nothing more than clickbait. Wallstreet investors do not understand the TV industry much less the streaming world very well at all. They don’t understand what people watch, why they watch, why there are ebbs and flows in subscribers and so on. They also don’t do well with a company that has sort of maxed out its market. Only so many people out there even have the ability to stream. The entire Wallstreet model is nothing more than a giant Peter Principle model. Let it grow till it reaches the point where it just can’t anymore than say it is a bad investment. A company is considered a failure if it doesn’t grow? Being the biggest and most popular doesn’t count for anything? Fine. The other streaming services will reach the point where they can not expand anymore too. And right now they are millions of paying subscribers away from even sniffing what analysts might call failure. The entire world is not about the investor class.