In past articles, I have admitted
my issues with streaming services such as Netflix and Amazon and all their
subsidiaries. I don’t have much of a problem with the quality of much of the
programming – I’ve had a lot of fun with Fleabag
and Russian Doll and have been
taken to new worlds with Stranger Things and
Homecoming. But there’s always seemed
to be something flawed with their business models that has never added up from
the beginning.
For much of the decade, we keep
hearing things about how shows like Orange
is the New Black or Glow or Grace & Frankie have been huge hits
for Netflix. What has never been quantified by Netflix is how they are
classified as huge hits. As flawed as I have found the Nielsen rating system to
be for broadcast and cable television, at least it succeeded at its main job of
telling us just how many people were watching a show. It been more than eight
years since Netflix started airing original programming, and we have yet to get
a clear idea as to how many people are watching, say, The Crown or Peaky Blinders.
A few days ago, I read somewhere how
Netflix is doing – and I was appalled.
For years, they’ve been releasing
absurd numbers saying that sixty million people watched House of Cards or forty-eight million watched Dead Like Me. I’ve often wonder how they got these numbers that not
even Super Bowls have managed. Then I learned that basically it means that’s
how many people have watched the first two minutes of the first episode. Um,
WTF? If this is accurate, it may mean that more critics have watched entire
seasons of Master of None or AfterLife than have ever watched the
show.
How the hell does something like
this happen? I have had my issues with how opening box office success seems to
determine what makes a hit movie for the last thirty years. It’s always struck
me as a faulty business model - 10
million see it week one, and maybe 2 million see in it week two, but who cares
because the studios have already declared victory. (This model may explain
better than anything how Transformers and
Twilight were ever considered
successful franchises). But it’s a firmly established plan compared to how
Netflix seems to be willing to do business all this time. At least those people actually saw the movie
the first week. Here, it’s the equivalent of watching the opening credits and
then walking back to your car.
And as shallow a method as this is,
it at least goes through the motion of having an audience. Amazon and Hulu have
been showing original programming for more than five years, and we still don’t
know how many people are actually watching Transparent
or The Handmaid’s Tale.
This is shocking on a lot of level,
but perhaps the most appalling is that it’s a terrible business model. For
years, I’ve been trying to figure out how these streaming services can be
making any money off these shows. Even if each of these services had 20 million
subscribers apiece (which wouldn’t nearly account for the viewers for some
series, but let’s let that go for now), it couldn’t possibly cover the revenue
stream needed to cover the budgets of some of these series. How can you
possibly spend billions of dollars a year on programming and expect to make a
profit?
I found the answer to that in a
different article – they’re not. Netflix has been spending billions of dollars
on dozens if not hundreds of series over just the past decade, and as a result
now find themselves in a massive debt. How long they can continue to operate at
this speed is questionable, especially considering how new streaming services
like Apple and HBO Max can only cut into their stream. Amazon understandably
has deep pockets, so they might be able to last for awhile. God knows how other
streaming services will survive.
Streaming surfaces have made
television viewing much harder the last few years, from completely wrecking how
the average viewers watches television to their being to many television shows
to watch to cause so many other cable networks to either shut down original
program or consolidate with other networks. Now, it seems that they have been
little more than a Ponzi scheme when it came to actually making a working
business model. The broadcast networks have already paid for this, first at the
Emmys, then as having an audience at all. Cable networks are beginning to fold
up at this because it’s too expensive. When Netflix reaches saturation point?
At this point, they might need every viewer on Earth just to break even.
What does any of this mean for
television viewers? I’m really not sure yet. I don’t regret that I followed the
Netflix model – they created some truly wondrous and brilliant television over
the years, and I’ll admit it would be a real loss for anyone who likes quality
TV if they were to start going into collapse mode. It does, however, make me
wonder about so many series on the surface that are announcing the end of their
runs after just three or four seasons. That’s been a model that Netflix didn’t
create, but I’m now wondering whether Russian
Doll or Dead to Me have limited
runs because of their creator or their Medici’s.
I’m going to keep watching Netflix,
and I’m not going to urge anybody to stop. That said a couple of words of
caution. First, don’t assume that ‘everybody’s’ watching a Netflix show just
because you hear it somewhere. And those massive contracts that Shonda Rhimes
and Ryan Murphy have signed? Don’t be shocked if they don’t start having
‘creative problems’. We may be reaching the time where Netflix has bitten off
more than it can chew.