Netflix Is a Victim of Its Own Success

Netflix stock is plummeting, it's hemorrhaging subscribers, and the company is pledging to finally crack down on password sharing. The company that once completely transformed the landscape of television and movies is now also a victim of that change.

This isn’t to say that Netflix is dead or dying, just that it has, for the moment, saturated the market. The platform is losing subscriptions and trying to get people to stop sharing passwords because there are simply no longer a significant number of new subscribers to get. Netflix invented the model of streaming television and movies that is now dominant across the industry. The problem is, now it has actual competitors in that industry and is no longer its ruler by default.

Netflix is a giant company in its own right, but its competitors generally have an incredible amount of archive content, have been formed as a part of megamergers that have only strengthened those archives, and also—in the case of Disney+, Apple TV+, and Amazon Prime—have thriving businesses that have nothing to do with streaming, perhaps putting less pressure on them to make money with their streaming offerings out of the gate. Netflix is now also in the difficult position of trying to figure out how to build a line of revenue with advertising even though it has no history in the advertising space and, according to The Information, very few employees who know how to sell them. 

Netflix losing subscribers hasn’t come from nowhere. Ever since the company started streaming movies and television shows over the internet, people have assumed that the price wouldn’t stay at $9 per month—the original price for a netflix subscription—forever. When the price first jumped to $10 in 2014, my dad threatened to cancel. At the time, existing subscribers would be able to continue to pay $9 dollars for the next two years. Almost 10 years later, the service has three tiers of subscriptions. The lowest tier, at ten dollars, only allows Netflix to be used on one device at a time and does not have HD playback. The next tier is $15, and the highest tier is $20 (services like Disney+ and Apple TV+, which are both cheaper, offer 4k streaming for no extra charge). 

If you’re one of the people sharing a password with a family member that Netflix is about to crack down on, you’re also just in a different streaming environment than when Netflix first started. When Netflix started streaming television, it started the entire practice of streaming television. My dad didn’t cancel his Netflix subscription in 2014 because there wouldn’t be any other way to stream his favorite movies if he did so. If Netflix suddenly makes it harder to share passwords, it's not clear people will simply get their own Netflix subscriptions. Netflix doesn't have, for example, Star Trek or Buffy or Gossip Girl. Star Trek is on Paramount’s streaming service, Buffy is on the Disney owned Hulu, and Gossip Girl is on HBO Max. 

Netflix isn’t dying, exactly. It's just being forced to actually compete in the market it created. Netflix is increasingly having to rely on its own programming, which isn't bad, exactly, though a lot of it is absolute drek. Meanwhile, Paramount, NBC, Disney, HBO, and Warner Brothers have taken their back catalog of original content off of Netflix (if it was ever there), and stuck it on their own services. Hell, in some cases, new competitors to the streaming television and film market don’t invest the kind of time or money Netflix has into making new content and sometimes it gets them even better returns. Apple, already a wildly successful company, was able to cop an Oscar this year by distributing a movie that already had positive buzz on the festival market. Winning Best Picture at the Oscars, something which Netflix has not been able to do, boosted subscriptions to Apple TV+ by 25 percent. Meanwhile, Netflix is spending $30 million per episode on Stranger Things, a show I keep forgetting is still happening.

Netflix likely isn’t going anywhere anytime soon, but it appears the company can no longer print money, and can no longer take its dominance for granted.