Do the economics of Netflix make sense?

OK here’s the sad thing. A little more than two months ago, this blog was ranting about Russian DollThe Netflix series was super-buzzworthy back in February. The other day I saw a picture of Natasha Lyonne, its star, and I had to Google the title of the show. I’d forgotten it just that fast.

Is it just that I’m getting old and forgetful or is there something else going on here?

The endless scroll

This Saturday Night Live parody is spot on. Netflix produces a massive amount of content. Most of it isn’t that good. There’s so much that you’e constantly bombarded with new things to watch. I’m sure the people at Netflix would tell you that’s a good thing, that it helps retain a fickle audience who constantly demands something different.

On the other hand, I think Netflix is so full of poorly-produced and inconsistent garbage that I don’t like visiting the app anymore. I get it. They felt like they weren’t going to stay alive with a catalog of old movies and TV shows. They wanted content they could own forever. But they’ve gone too far off the rails. It’s hard to even remember what you’ve seen on Netflix.

The frustrating case of The OA

The OA was one of those shows that took viewers on a wild ride back in 2017. Season two came out last month and practically no one noticed. The first season has been largely forgotten. Its buzz was extremely short-lived. I eventually got around to watching an episode and it started with a 4-minute-long recap of the previous season. Netflix knows that people have forgotten all about this show.

At least it took The OA 2 years to be forgotten. I guess I’d forgotten Russian Doll in two months. There’s just so much to watch and there wasn’t anything about this show to keep it in my memory. It was a temporary treat and little else.

The binge model creates the problem

I think the real problem is the bingewatching model. Netflix pioneered the idea of releasing a whole season at a time. This makes a show extremely buzzworthy for a few days and then no one talks much about it after that. I don’t know how they can continue delivering this concentrated “high” for customers.

How can Netflix keep making money this way?

Honestly, I don’t know. I don’t have any hard data but I tend to think only about 5% of its shows are buzzworthy. The only data I do have suggests that the majority of people still go to Netflix just to watch reruns of Friends and The Office. Netflix doesn’t publish viewership numbers, although you can bet they know them.

The company continues to produce show after show that gets almost completely ignored. They’ve done several seasons of the offbeat Santa Clarita Diet that have been utterly ignored by critics. Most of these shows have very high production values and are produced in 4K HDR. They can’t be cheap.

Honestly I’ve been picking on Netflix for years and it hasn’t gotten me anywhere. Their stock should be crashing about now and it isn’t. Clearly they know something I don’t. The only thing is, I have no idea what that is. I only wish they would give me another season of Orange is the New Black. At least there’s a show I’m actually interested in.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 8,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.