Netflix is run by smart people.
They knew full well that their near-monopoly on old films and television shows they had when they launched was not going to last forever. Eventually, they knew that the studios that made "Parks and Recreation," "The Office" and 'Mad Men" would pull their titles when their licensing deal expired and build their own platform with them.
But Netflix's (NFLX) big advantage was that it was the first streaming service out of the gate, so it had time to build a name for itself while all of Hollywood's major studios figured out how to build their own platform.
This is why starting in 2013 with the launch of attention-grabbing original dramas such as “Orange Is the New Black” and “House of Cards,” the service began producing original material to build its own back catalog.
The theory was that when Paramount (PARA) , Comcast (CMCSA), and Warner Bros. (DISCA) took their marquee titles back, Netflix would have enough material to stay competitive.
“I suspect licensing popular titles will continue to be part of the competitive landscape of streaming platforms," Tina Mulqueen, CEO at Kindred PR & Founder of Et al. Media, "but the real differentiators are going to be the quality and timeliness of original content.”
And therein lies the rub.
Netflix came from a technology background, not a creative background. Rather than the strategy-based approach that a network like HBO or NBC (Peacock), Netflix's philosophy was to just order as much content as possible, for as many different backgrounds as possible.
If you throw up enough against the wall, something will stick, right? And this approach had only intensified as Netflix has begun experimenting with reality shows, documentaries game shows and as much cheap unscripted material as it can get its hands on.
That approach certainly made ensured there was a lot to watch on Netflix, even as Comcast had placed most of NBC Universal's shows and movies on Peacock, and Warner Bros. on HBO Max and Paramount Global on Paramount+ and so on.
But how much of it was worth watching?
Netflix Has Too Much Content
A few years ago, “Saturday Night Live” satirized this buffet-style approach with a sketch that featured Mikey Day as a Netflix executive who threw money at literally every idea presented to him, no matter how half-baked.
Day now hosts the Netflix cooking game show “Is Is Cake?,” in which people guess whether an item is or isn't cake. It's one of the strangest things the service has ever cooked up, and it's unclear why it exists. Surely someone would like such a thing, some Netflix executive must have thought
And now, this hit or miss approach has caught up with Netflix. It’s not like Netflix only makes bad shows, far from it. Many critics have said that the animated series “Bojack Horseman” is the single greatest show a streaming service has ever produced, and the new season of “Russian Doll” is getting raves.
But it’s very easy for the noise to drown out the signal at this point, as many quality shows don’t get noticed when they’re one of a dozen full-season content drops that Netflix released on Friday morning. It’s gotten to the point where even when there’s good stuff, it’s harder to find it on Netflix than ever.
“At the start, Netflix offered a very utilitarian approach to streaming. It emphasized ease of use and personalization, which appealed to early adopters and was more than enough to break through to the masses,” says Jason Cieslak, President, Pacific Rim, Siegel+Gale a top global branding agency. “It was, by all accounts, a remarkable evolution from a company whose prior distribution was DVDs through the U.S. Mail.
“But over time, Netflix didn’t really embrace the production quality, franchise-building mentality, and brand building that traditional Hollywood players have always done,” Cieslak adds.
“And all three of those things started to expose them and make them vulnerable to traditional Hollywood incumbents. And while Netflix is surely moving quickly to address these things, the industry has shifted, and the old guard now has a new lease on life. And it’s no longer Netflix and everybody else. Disney+, HBOMax, AppleTV, and Amazon are hot on their heels.”
What Does Netflix Need To Do Next?
Disney+ (DIS) has the advantage of owning some of the most recognizable property in the world. But it also had patience, dropping only or two episodes of its latest Marvel or Star Wars show at a time. While some things worked better than others, even a more mid-level hit like “The Book of Boba Fett” didn’t get lost in the mix. Apple+ (AAPL) takes a similar approach.
In contrast, Netflix simply floods the zone, but then angered online fanbases by canceling shows with culty but dedicated followings, like “Altered Carbon,” "American Vandal" or the remake of “One Day at a Time.” (I.E., the sort of thing Netflix used to support in the beginning.) So distrust is high, and fans begin worrying about starting a new show, least it get cancelled right when it starts to get good.
“I first want to give Netflix credit for taking chances with content where other entertainment platforms would not, which resulted in hits like ‘Stranger Things,’ which was famously rejected by other networks,’ says Mulqueen.
“Greenlighting so much content, though, has created issues with both quality and cancellations which have impacted the platform," who wonders whether its recent success with a certain documentary hit may have led Netflix astray. “It seems to be producing a ton of unscripted reality-driven content in the aftermath of ‘Tiger King,’ which may be hurting its overall content strategy, especially in a more competitive landscape."
But the time has come to focus and exert some quality control, and to get back to focusing on the core principles.
“Netflix needs to balance how to get audiences to consume content while they're on the platform, and how to produce content that brings audiences to the platform in the first place,” says Mulqueen.
“Outside of a perfect storm of quarantine and big cat sensationalism, it's unlikely that much of the unscripted content will be a pop culture phenomenon. Honing their content strategy and continuing to innovate will be critical for Netflix to stay competitive.”
