Like Blockbuster before it, Netflix is losing its edge.
Something very odd seems to be happening lately.
Several large companies that heretofore looked untouchable- set to dominate their respective marketplaces in perpetuity, regularly raking in a mint, enjoying near-unprecedented influence and power- are looking a bit shakier all of a sudden.
Facebook is in the midst of a name-change and rebranding effort and such efforts rarely bode well for the company forced to deploy them. From some insider reports, META isn’t going as well as Facebook executives would like.
Worse, for Zuckerberg anyway, is the fact that companies and individuals are starting to distance themselves from Facebook-owned platforms. There have recently been accusations pouring in from influential quarters that the company doesn’t support a healthy and inclusive platform for all.
Twitter, which looked in no danger of an imminent hostile takeover only a month ago, has been acquired by Tesla billionaire Elon Musk seemingly overnight, much to the dissatisfaction of millions of progressives previously satisfied with the status quo of billionaires controlling speech on Twitter.
Even companies like Netflix are starting to show the strain. After seemingly endless quarters with nothing but upward growth trends and blue skies as far as the eye could see, Netflix is suddenly hurting, cutting back on production costs, cancelling programming already in production and starting layoffs.
Subscribers have been curtailing their Netflix subscriptions en masse. The company announced a rate increase just a few months ago, another unmistakable sign of a company in need of reversing a negative revenue trend.
To no avail, or perhaps as an unforeseen consequence of the price increase, Netflix bled subscribers last quarter, with 10X as many expected to quit Netflix in the near future.
Why is this happening?
Netflix in particular is an interesting market study in why companies don’t last forever and how much an industry can change in a very short time. As with most other compound effects, the trend undermining Netflix and other companies is due to more than one thing.
First, there are more options than ever before.
Hulu, Amazon Prime, Disney+, HBO; subscribers looking for their new favorite television shows have no shortage of likely candidates, each one offering its own blend of old and new, original and licensed content.
Second, the price increase wasn’t timed very well considering consumers faced with historic inflation and a shrinking GDP are likely to target discretionary spending first.
Corresponding with the end of forced lock-downs, discretionary spending is changing accordingly as more people venture out.
Third, Hollywood is in the painful process of uprooting the old boy’s club, with all of the growing pains inherent in any such undertaking, including a new sort of exclusive club replacing it .
There is major fault line in California, and it isn’t the San Andreas. The vast, continental divide between Republicans and Democrats is wider than ever and growing more abysmal by the day. A company taking what Republicans consider a principled moral stance will be likely boycotted by Democrats and vice versa.
As Michael Jordan once remarked about his perennially popular Air Jordans: “Republicans buy shoes, too.”
Increasingly, companies under public pressure to move leftward do so, only to face a corresponding backlash from an equal and opposite pool of potential customers on the right.
In a way, the pendulum of consumer advocacy groups has swung away from the conservative One Million Moms of yesteryear to the modern day Twitter progressive equivalent. Drumming up one of those old boycott campaigns is easier than ever; companies convinced to cave will have to bend like a willow reed to keep up with the constant onslaught.
When retail giant J.C. Penny named Ellen Degeneres their spokesperson over a decade ago, it faced backlash from One Million Moms. Degeneres was one of the first openly-gay celebrities on television; as far as openly-gay celebrities repping a major brand, Degeneres was a pioneer.
One Million Moms threatened to boycott if J.C. Penny didn’t remove Degeneres: J.C. Penny refused. One Million Moms followed through, did minor damage, then eventually moved on and found another target. J.C. Penny survived, only to be poorly managed on matters not related to their celebrity spokesperson. Life went on.
Eventually, the reach of One Million Moms, whatever it was, dwindled and the group faded into obscurity. But the true, and truly sinister, intent of One Million Moms- just like the true intent of the cancel culture morality police today on Twitter and censors everywhere- was to dissuade other major retailers from choosing openly-gay people like Degeneres for their advertising campaigns in the first place. The activities of One Million Moms made it the easier choice for marketing departments to just opt for someone else from among hundreds of other potential celebrity spokespeople or indeed a million other advertising strategies.
As many companies have learned to their cost, hiring a celebrity spokesperson, or any spokesperson, isn’t without its risks, anyway. Whatever that person does is irrecoverably tied to their high-profile endorsements.
The events of the past two years, and to a lesser extent the four years of the Trump presidency, have been marked by a divisiveness so sharp as to make remaining neutral a position unto and of itself.
On one side, we have conservatives, shell-shocked and embittered by what they see as creeping government overreach and a covid response equally draconian and arbitrary that trampled individual rights, worsened inequality worldwide, and the willingness of liberals to go along with it.
On the other side, we have progressives, shell-shocked and embittered by what they see as a complete refusal on the part of their more-conservative neighbors to see sense and sacrifice a bit of personal freedom and self-expression for the good of the community.
Netflix, and other Silicon Valley-type companies aren’t suffering from a market saturation problem so much as they are suffering from a market polarization problem.
To attract customers, today’s would-be successful company practically needs two separate marketing and advertising departments; one to appeal to conservatives, the other, to liberals.
The future of mass media companies like Netflix and Twitter may not be giant conglomerates purporting to serve a wide swath of consumers from coast to coast and everywhere in between. Instead, it may be smaller, boutique, local.
Social media apps specific to interests, to area code, to affinity groups. One digital streaming service for conservatives; one for progressives.
Netflix, and companies like it, may still be intent on serving something for everyone. Some companies may even remove themselves from politics in an effort to avoid this new conundrum.
In a free market economy, the consumer market will respond to need. If there are people willing to spend money on something, there will always be someone trying to make a buck- bless them.
Thanks to the enterprising and entrepreneurial capitalists among us, we can enjoy cutting-edge things like HD television sets and indoor plumbing. What companies responding to these seismic shifts in consumer habits must not do, however, is allow this new polarity to dampen American ingenuity and the inventions of tomorrow.
(contributing writer, Brooke Bell)