Netflix lost nearly a million subscribers in its second quarter. But considering that it had projected a loss of 2 million subscribers, and it had already lost 200,000 customers in the first quarter of the year, things could have been worse.
In a recent earnings call with investors, Netflix (NFLX) CEO Reed Hastings said that part of the reason why the company’s losses weren’t as bad in the second quarter as projected, is that it had the latest season of “Stranger Things” as well as the final season of “Ozark.”
Which, fair enough. But the problem for Netflix is that it’s beginning to look like “Stranger Things” is an unrepeatable phenomenon for the company, the type of culture shifting show everyone has an opinion on.
This isn’t to say that the company doesn’t have other popular shows; “Squid Game,” “Bridgerton” and “Inventing Anna,” amongst others, have all managed to find a broad audience. And while even star Benedict Cumberbatch has made jokes that he’s not sure if anyone watched his Netflix drama “The Power of the Dog,” it’s not nothing that the film was nominated for Best Picture.
But as we’ve noted before, Netflix has a default tendency to make a lot of stuff in the seeming hopes that if it just throws a lot of things at the wall, and a lot of money at producers and creators, surely something will stick.
The result of this approach is that Netflix has arguably diluted the value of its brand by making too many forgettable TV shows and films.
Netflix Makes Too Much Stuff
The funnel hose of money approach that Netflix has can still bring some results, but increasingly those hits are being drowned out by expensive but forgettable duds like “6 Underground” and “Red Notice,” expensive would-be action blockbusters with recognizable talent that didn’t generate much chatter beyond their opening weekend. Ryan Reynolds starred in both of them, and action movie auteur Michael Bay directed “6 Underground.” (Mel Magazine critic Tim Grierson refers to these sorts of Netflix originals as “films that sort of resemble real films.”)
Netflix long ago realized that companies such as Comcast (CMCSA) were going to reclaim the intellectual property that the company used to build its customer base in the ‘00s, so it went about creating its own content. Unlike Disney (DIS) and Warner Bros Discovery (WBD), the company doesn’t own the rights to famous intellectual property like the Marvel and DC Universe, so it’s tried to make its own household names, with very mixed results.
Netflix/TS
More Is Not More
Netflix ‘s problem is that rather than taking the more strategic approach seen by, say, HBO Max, the company has just spent a lot of money for arguably too little reward.
Look at Netflix’s approach to films. It has a lot of stuff, and some of them have become buzzed-about hits, such as the “To All the Boys I've Loved Before,” which inspired countless memes and turned Lana Condor and Noah Centineo into Gen Z stars.
But Netflix also has a ton of generic-looking films that all seem to feature Mark Wahlberg, and for some reason the company is willing to indulge all of Adam Sandler’s laziest impulses. (When Sandler is great, he’s one of the best actors around. But when he’s bad, he’s truly terrible and the 2020 Netflix original “Hubie Halloween” is considered one of his worst films.)
Netflix doesn’t seem aware that this make as much stuff as possible approach isn’t working. If anything, they seem to be doubling down on the more is more approach.
Nearly all of the executives mentioned in the recent earnings call indicated they were excited about the upcoming Netflix original “The Gray Man,” which was released in theaters already and will hit the streaming service on July 22.
An action thriller starring Ryan Gosling and Chris Evans, “The Gray Man” is rumored to be the most expensive original film Netflix has made yet, with a price tag reported to be in excess of $200 million (Chris Evans isn’t cheap, y’all). It was directed by Joe and Anthony Russo, the team behind the massively successful “Avengers: Infinity War” and “Avengers: Endgame,” and the Russo brothers have indicated they’d like it to become a franchise for the company.
But is this money well spent?
Maybe this will prove to be the breakout hit that changes the reputation of Netflix original films and will become the company's next signature hit. But the underwhelming reviews indicate that the film is more likely to be the next "Red Notice" and that Netflix needs to be a lot more careful with its checkbook.
