Pour one out for Big Tech — it’s not easy staying on top.
Last week, Netflix announced a bold, ambitious, exciting new plan to open two large venues for “in-person experiences,” at the King of Prussia Mall near Philadelphia and at the Galleria in Dallas. The “Netflix Houses” will “feature a wide array of shopping outlets, eateries and experiential activities tied to the streamer’s major franchises like ‘Bridgerton,’ ‘Stranger Things’ and ‘Squid Game.’” And, as the company’s chief marketing officer put it:
At Netflix House, you can enjoy regularly updated immersive experiences, indulge in retail therapy, and get a taste — literally — of your favorite Netflix series and films through unique food and drink offerings.
Cool.
As I tweeted about the announcement:
This is all occurring at a moment when, as the New York Times put it the other day, the industry is buckling:
How many streaming services will consumers support? That was one of the great mysteries of the nascent streaming world, and the answer is coming into focus: not very many.
Moreover, as it becomes clear that the streaming “Golden Age” is over and some will surely soon be on their way out, much has been said about the recent turn to bundling, and how it resembles (in some ways, but with clear differences) cable packages:
In May, Comcast announced it would offer its broadband customers a bundle of Peacock, Netflix and Apple TV+ for $15 a month. Disney has bundled Disney+ and Hulu, with Max to be added this summer at an as-yet undisclosed price. Venu, a new sports streaming joint venture from Disney, Fox and Warner Bros. Discovery, is planning its release this fall.
It’s clear enough that there is an air of desperation among all of these companies as the streaming market constricts. Bob Iger, back in charge at Disney, noted that this supposed Golden Age is coming to an end for a very specific reason, and you can’t imagine what it might be: “Now we just have to make it viable for shareholders.”
Netflix ushered in this era in which growth seemed endless — 50 million subscribers, 100, 200, 250! As it turns out, this was not so viable a prospect, and for years now, shareholders have been getting restless, which (as ever) means things are getting worse for the rest of us.
As the Times summarizes, “That will necessarily mean higher prices for customers, more advertising, and less — and less expensive — content.” It’s this last point that remains in question for Netflix in particular. They will spend another $17 billion this year on content, and while they report $2.3 billion in net income for the first quarter of 2024, these numbers are nevertheless as unsustainable as ever — it remains at around $14 billion in debt. Beyond the Netflix Mall project, the company is continuing to spend obscene amounts on the blandest-sounding content, including a $300 million(!) price tag on the Russo brothers’ new movie, which also has an annoying cast seemingly intended to spark interest among as many fandoms as possible (Millie Bobby Brown, Chris Pratt, Giancarlo Esposito, Ke Huy Quan, Anthony Mackie). Seems fine!!!
Numbers aside, the point is that despite any perceived changing tides, Netflix is operating the only way it knows how, and it looks increasingly obvious that even their shareholders won’t abide all this much longer. Moves like cracking down on password sharing, introducing a cheaper ad-supported subscriber tier, and investing in physical property1 suggest, to me, that this is a company floundering for stability as the digital economy adjusts to something that at least looks a bit more like reality, when compared to the bombast of streaming prestige less than a decade ago.
Put simply, Netflix’s business model has been one centred on an evergrowing user base. As that base reaches its wall, investors (who are stupid and believe what companies like Netflix tell them) get antsy — where’s my payout, and why is it taking so long, and why aren’t you growing anymore? It seems that the result, at the moment, is an increased focus on content that will appeal as widely as possible (even if I constantly see the charts they release of their top-watched movies and shows and it is always headed by something I’ve never heard of, like Eric).
The problem for Netflix, as I see it, is that this goes against what has ostensibly been its biggest selling point to investors, advertisers, and users alike — its ability to use viewer data to create more of what we want. The promise of this data, of knowing what we watch and how much and much more, was that it let Netflix know what to greenlight, and it opened up countless niches that were served by content made for them. Some of Netflix’s greatest shows in years past, like Lady Dynamite, I Think You Should Leave, or American Vandal, were decidedly not for everyone. Now, Netflix seems to be reframing all this data to reach lowest-common-denominator offerings that the largest amount of people will sit through, because it’s good enough, or can act as workable background noise. The loss of the streamer’s investment in diverse and varied content may mean high numbers of “hours watched,” but it also means audiences aren’t being served even in the meagre way they once were. And so, what is the actual value of all this data?
I happened to listen to an interview with Scott Galloway, who is usually wrong, on The Town podcast, and in disparaging the 2023 writers’ guild strike as ill-advised and lacking in leverage2, Galloway makes a related point about how Netflix won more than anyone, specifically as we’re now seeing fewer projects being greenlit which means fewer writers getting hired, while Netflix saved up and gets to add to its own revenue now. There’s a few things one could say about this, but the obvious point is that this would be happening anyway, based on everything I’ve just laid out and more, and to blame the striking writers is ludicrous. The industry is in dire straits, and they fought to get what they could out of it.
Still, Galloway’s larger narrative isn’t entirely off, in the (narrowest) sense that much of the focus should shift to the Big Tech players who have inculcated the entire industry with an impossible growth mindset that at best rewards the executives and shareholders at the top for a time, before they move on to something more exciting and/or sustainable. Netflix seems to be digging in its heels, betting huge on (presumably easy bets like) the Russo brothers, the NFL, and, I guess, America’s dead malls, while everything else continues its slow ebb into same-y sludge.
For us, it’s nothing new: a technology or platform gets introduced, and it initially seems great because it’s fairly affordable and provides something genuinely new and exciting; with time and market adjustment, the quality erodes, we see more ads, we pay more, and using it feels worse, as so-called experts call on them to incorporate “innovations” like generative AI, mixed-reality “experiences,” and whatever other buzzword is on the lips of corporate consultants if they want to keep attracting subscribers and users.
As a consequence, culture seems to homogenize, even as it is shaped around tinier clusters of hyper-specification. Mass culture, such as it is, becomes the circulation of brainrot.3 Our only option, it seems, is to overcome a resigned acceptance, droning into aesthetic and cultural numbness on Netflix’s terms, and demand a different architecture for culture. Maybe we could start by canceling our subscriptions.
Ephemera
Kevin Nguyen wrote a definitive take for The Verge on what happened to journalism in the 2010s by focusing on one major entity that all of media homogenized around — Game of Thrones: “As much of a singular phenomenon as Thrones was, it was the focus of a brief era when Facebook was sending a flood of traffic to publications, and nearly every major media company sold out the things that differentiated its publications in order to take a sip.”
Tim Bradshaw and Michael Acton at the Financial Times ask whether Nvidia’s market reign will collapse as interest in AI begins to fall: “The last time a company with a brand as relatively obscure as Nvidia’s occupied this position was in March 2000, when Cisco, which makes networking gear, overtook Microsoft at the apogee of the dotcom bubble…The fact that Big Tech’s capital spending surge on AI is based more on revenue projections than actual returns has stoked fears of history repeating itself.”
The new (horrible) era of personalized pricing, by David Dayen for The American Prospect: “Today, the fine-graining of data and the isolation of consumers has changed the game. The old idiom is that every man has his price. But that’s literally true now, much more than you know, and it’s certainly the plan for the future.”
Song Rec: “Love Me JeJe” by Tems
As one of the media titans interviewed by the Times puts it to the most influential shareholder at Comcast: “In light of the challenges facing the industry, Comcast should continue its current strategy of investing in other areas like theme parks.”
The gains the WGA scored certainly invite critique and nuance, especially in terms of the vague AI wording, but Galloway (as he admits!) barely knows what he’s talking about.