For those of us outside the world of high finance, it is rare to take deep satisfaction in the financial status of any company that doesn't sign our own checks. But the most recent Netflix quarterly report was, in many ways, a thing of bad-news-equals-good-news beauty.
The streamer lost 970,000 subscribers during the last few months, almost four times the number it lost last quarter, offering conclusive proof that it is not a supernatural juggernaut immune to the slings and arrows of outrageous fortune — or its own mistakes.
But the loss was far short of the 2 million Netflix had predicted, a number that would indicate the sort of freefall no industry likes to see.
Not even the entertainment industry, which has had a love-hate relationship with Netflix for years. Or, for that matter, the media covering it, which has its own very mixed feelings toward the streamer.
Like many people, I experienced a slight, shameful frisson when, earlier this year, Netflix unexpectedly experienced its first big financial setback — a loss of 200,000 subscribers and a 60% drop in stocks. I would stop short of describing it as gleeful (though I received many messages from folks in the Hollywood who did not), but it was definitely glee-adjacent, albeit tinged with guilt because Netflix responded, as companies always do when the profits fall, by laying people off.
Ted Sarandos may be a millionaire, but most of the people working for Netflix are not.
And it's not that I don't like the streamer; some of my favorite shows are on Netflix. During my years as a television critic, I watched the company revolutionize the creative and financial model of television in ways beyond counting, including and especially the demystification of subtitles, which has literally opened new worlds for American viewers. (Though honestly, Vince Gilligan thanking Netflix for helping "Breaking Bad" find an audience remains as good a justification as ever there was.)
As soon as it got into the original content business, Netflix offered a more affordable — and populist — alternative to HBO and other premium cable networks, which invented the notion of "prestige" television and dominated that portion of the industry for years.
Even so, Netflix was always slightly irritating. In its early years, it demanded that critics sign a nondisclosure agreement, something no other platform ever did for the simple reason that it is absurd. The binge model it pioneered for original shows made it difficult for people to talk, much less write, about a new series in any consistent way without being accused of "spoiling" something. With its reliance on short seasons, Netflix — and then other streamers — wound up making life more difficult for creators and crew, many of whom struggled to cobble together a living that had evolved around the traditional 23-episode series.
With Ryan Murphy and Shonda Rhimes, Netflix set the template for streamers luring away top talent from broadcast and cable with absurdly high-figure deals in a way that seems calculated to drain the competition as much as increase its own quality (and "Bridgerton" notwithstanding, the jury is still out on that). Its obsessive desire for awards helped turn the Emmys race into a distillation of the very worst of the Oscars race — big-money campaigns focusing attention on a disturbingly limited number of works.
Its algorithms are absurd, its library increasingly cluttered with junk while certain beloved shows have been canceled after their third season, and it hasn't helped that its chief executive lately has been given to writing patronizing memos privilege-splaining why its important that comedy be allowed to exploit the oppression of certain groups.
But the root of most people's mixed feelings toward Netflix lies in its dominance; Americans love a winner — but not so much an unfair advantage. In a decade, Netflix had gone from a scrappy innovator, relying mostly on content generated by other networks and studios, to an industry powerhouse competing ruthlessly for Emmys, Oscars and every square inch of the television landscape it can get.
For those who don't believe in the corruptive nature of power, there are approximately 875 Netflix shows illustrating the concept.
So this quarterly report was perfect in that the streamer's world-dominance received a further check, but not a fatal blow (here's hoping there are no more layoffs). Because no one in their right mind wants Netflix to fail.
Well, maybe a few heads of other media companies. The streaming wars have come to resemble the Battle of the Five Armies (if Tolkien had thrown in a few ancillary ranks to represent Peacock, AMC+ and Paramount TV) and Netflix has suffered, particularly as other platforms rake back their original content.
In that battle, however, it is important to remember that Netflix is the only platform that sells one single thing: online creative content. Although much of that content still comes from deals with other content producers, it isn't part of an empire built on and still fueled by home-delivery or film franchises and theme parks, or laptops and cellphones. It makes television but has no network, makes films but owns no theaters.
Netflix recently announced it will be offering — like many other streamers — a less costly subscription that includes ads. Which could, in time, turn Netflix into just an online version of a broadcast network.
The consumer always benefits when there is competition, although the streamers have added the pursuit of consumer dollars to broadcast TV's traditional competition for eyeballs.
With the help of HBO Max, HBO continues to dominate the television awards race if not its subscription base, and the beauty of empire-backed platforms like Amazon and Apple TV+ lies in their ability to swing really big without worrying too much about money. Amazon's upcoming "Lord of the Rings" prequel will be by far the most expensive piece of television ever produced; if it fails, many people will be sad, but Amazon's bottom-line won't waver.
With that in mind, the meteoric rise of Netflix is even more astonishing. As is the fact that it remains the one streaming service solely dependent on itself, not beholden to any morning show or sporting event, no other brand or product or service.
Netflix is, for all its shortcomings and irritations, as pure a purveyor of creative content as is possible to find in this conglomerate-dominated world.
And that has to be worth something.
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ABOUT THE WRITER
Mary McNamara is a culture columnist and critic for the Los Angeles Times.
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