There are few contemporary business blunders as notorious as Blockbuster’s parochial decision to pass on the opportunity to purchase Netflix in 2000. As a result of the failed merger, the two became competitors — and Netflix’s victory was a foregone conclusion. Blockbuster was unable to pivot away from brick and mortar, while Netflix exemplified the disruptive spirit of Web 2.0.
In the two decades since, Netflix has evolved from a distribution innovator to a digital streaming innovator. Now as a studio in and of itself, the ethos of disruption remains. But while this temperament has been good for the company’s bottom line, it hasn’t benefited film and television.
For consumers, Netflix’s initial innovations were an easy sell. It was a convenient film-rental delivery service with no late fees for $5 a month, oftentimes offering more options than brick-and-mortar stores. Then it became a digital streaming service that leveraged major syndicated television titles and films to be discovered and rewatched at one’s leisure. People could consume more content, and content producers could reach more viewers. The freedom to customize one’s viewing experience was immediately embraced.
The trouble became apparent when Netflix moved from merely distributing to actually producing its own original content. At first the streamer-studio model was advertised as a new frontier for filmmakers who were otherwise left out of conventional television. Unfortunately, the gold rush for each media conglomerate, inspired by Netflix, to create streaming services that produce their own content has not only recreated a more Byzantine system of streaming choices more expensive than a cable package, but it has largely abandoned the hassle of high-quality cinematic programming.
While Netflix and the other streamers it inspired can still release the occasional show with unconventional aesthetic and storytelling sensibilities, in general what they’ve done is created an assembly line of television shows of the same low quality that prestige television was intended to stand in contrast with — only now a single streamer will release far more shows than all the major networks combined.
In 2022, Netflix will release over 120 seasons of television. This model of perpetual growth will eventually yield diminishing financial returns, but by that point its effect on the aesthetic and storytelling of film and television may be impossible to reverse.
The Rise and Fall of Prestige TV
When Netflix first began making its own movies and series, its business model seemed to guarantee more creative freedom, which many saw as a promising positive influence on film and television.
Netflix knew that in order to keep subscriptions up, it needed to attract talented showrunners — whom, the company reasoned, might be lured with textual and aesthetic freedoms that conventional channels couldn’t offer. Season lengths and numbers of episodes needn’t adhere to conventions. Wider aspect ratios once relegated to movie theaters could be applied to episodic television, giving the appearance of a more sophisticated and cinematic program.
All of this seemed the next logical step after the proliferation of “prestige television” in the late ’90s and early 2000s, mostly on cable where more risks could be taken. HBO was the leader of this development, freeing creators from content restrictions and ratings and encouraging them to follow longer arcs that could allow for more complicated character-driven storytelling that more closely resembles the cinematic look and feel of films.
As the appetite grew for programming like HBO’s, networks began to invest heavily in shows like Lost, which at the time was the most expensive pilot ever made. Networks like FX and AMC began to gamble on shows with the hallmarks of prestige television too.
As a digital streamer, Netflix used the prestige-TV boom to drive cord-cutting consumers toward the platform, courting shows like Breaking Bad and Mad Men as a promotional tool. When Netflix announced it would be making its own content, it was poised as the heir to the prestige-TV boom. Unfortunately, some countervailing pressures threw it off course.
First, Netflix had also been driving viewers to its platform with programming that already had a devoted fanbase: syndicated shows like Friends, Seinfeld, The Office, and Grey’s Anatomy, which became the streamer’s foundation. The immediacy of chronological access to hundreds of hours of programming had begun to form new viewing habits, appetites that Netflix was eager to satisfy with its original shows. Second, while Netflix didn’t have to worry about ratings, it did have to worry about subscriber retention and growth, a pressure that naturally lends itself to quantity over quality, especially when complex algorithms come into play.
Thus Netflix found itself in a position where its audience expected bingeable full seasons — and the company was compelled to churn out as many of them as possible. In so doing, it had a major tool at its disposal, which would have further consequences for the quality of its programming. Despite the steep licensing fees for these shows and films, Netflix had something that major cable broadcasters had always sought: viewer data. Outside of Nielsen ratings, the networks had never had access to the type of data that Netflix was able to collect — everything from demographic data related to program and talent preference to how many episodes the average person watches, where they pause, and whether or not they finish a show once they start. With these analytics, Netflix realized it could reverse-engineer hit shows, thus using its unprecedented reservoir of data to steer its programming.
Initially Netflix’s model for original content was a slate of decent marquee shows like Orange is the New Black, Stranger Things, and David Fincher’s House of Cards. Known for his visual exactitude, Fincher’s show starred an A-list cast and was able to tell a slower-paced story. This was the promise of the streamer-studio exemplified: Netflix would offer auteurs freedom and money to tell stories no other network would allow. First-look deals with filmmakers and showrunners with fan bases seemed like a mutually beneficial arrangement, especially when it seemed like independent filmmaking and mid-tier budget films were getting harder to come by.
The problem is that this tenuous arrangement was dependent on a model that HBO had fine-tuned and that Netflix chose to reject. HBO’s model of weekly Sunday night premium programming had allowed it to focus on fewer shows with much stricter quality assurance. HBO shows thus stayed on the air longer and stayed relevant for longer, which allowed the network to keep quality high and be more discerning with which shows it green-lit.
But Netflix needed full seasons, it needed a lot of them, and it needed them now. To make content at the desired speed and volume, the company took advantage of its status as “new media,” which meant that its union contracts could be negotiated with much lower rates and less costly penalties for making crews work substandard hours. The streamer-studio was supposed to be an incubator for creator creativity. Instead, it increasingly resembled a sweatshop.
Feeling the pressure to not only release seasons all at once but also continually scale up its library to maintain subscribers, Netflix’s original content suffered. After its initial marquee batch, its original shows came out and were forgotten almost as soon as their moment of promotion had passed. Now, many are canceled before writers are able to complete the multiseason arcs that prestige television became known for. Cancellation often occurs as a result of a cost-benefit analysis conducted based on Netflix’s rich trove of viewer data, which helps the company determine how long a television show can maintain an audience while still bringing in more subscribers.
In keeping with its initial disruptive business model, Netflix has decided to forego curation for infinite choices and to develop and release enough shows to fit every niche. This gives the impression that the company is customizing its programming for each viewer, when in reality it reduces the audience to customers to retain rather than engage with entertainment.
Netflix makes much of the fact that it’s ad-free (for now), and therefore ratings aren’t as necessary to keep the lights on. But swapping ratings with subscriptions hasn’t solved the issue, only better disguised it: Netflix is beholden to its algorithm the same way networks are to ratings. The same sort of algorithm that sends you ads for televisions after you’ve already bought one is now taking charge of your television programming.
Marketing has begun to usurp creative production and will eventually replace it, bringing us full circle from conventional TV to prestige TV and back again.
The Streamer-Studio Gold Rush
Netflix may be the leader among streamers, but this brinksmanship of content accumulation can also be attributed to others, who in order to compete are compelled to use their own unique advantages.
Disney Plus has only just begun expanding its net of intellectual property (IP) with films and television in the Marvel, Star Wars, Fox, and Pixar brands. While Netflix attempts to manifest new bankable IP in a manner similar to an early twentieth-century vertically-integrated studio, Disney can simply use brand recognition and nostalgia as effective marketing tools to compete. Somewhere in between the two, Amazon has completed its own merger with MGM for $8.5 billion, which gives it an enormous catalog of classic films to distribute and mine for intellectual property.
HBO has had a much more turbulent transition into the direct-to-consumer streaming service space. Over the last ten years, HBO under WarnerMedia has been acquired by AT&T, consolidated with Turner Broadcasting, merged with Discovery, and forced out longtime leader and executive Richard Plepler, who many executives felt was moving too slow to catch up with Netflix’s unprecedented ascendance in the streaming race.
In 2019, two years before stepping down, Plepler was pressed on the competition outspending HBO and releasing more content. He replied, “We are not trying to do the most. More is not better. Only better is better.” AT&T CEO John Stankey sounded a different note recently, saying, “In evaluating the form of distribution, we were guided by one objective — executing the transaction in the most seamless manner possible to support long-term value generation.” Not only are mergers continuing to consolidate ownership of media companies, but executives are unquestioningly in thrall to venture capital–funded Silicon Valley analytics.
WarnerMedia is no stranger to ill-advised mergers. In 2000, AOL and Time Warner merged three months before the dot-com bubble burst, leading to what is often referred to as the worst merger in history. The dot-com bubble was a massive speculation on internet-based companies whose gains were mostly wiped out by the subsequent recession. Few companies were able to escape the bubble intact, Amazon being one. By 2002, AOL Time Warner had lost almost $100 billion.
During the same time period, Netflix was trying to make a $50-million deal to sell itself to Blockbuster. Netflix and Amazon’s successes share interesting parallels because they’re both companies whose initial achievements owe to their ability to hone in on the inefficiencies of brick-and-mortar businesses and improve upon them. But these innovations in rendering more efficient services without front-facing stores have also had catastrophic effects on their respective industries. Without physical stores, their ability to scale up is only limited by warehouses and server farms instead of retail space. The growth of Amazon and Netflix has led to conveniently delivered, cheaply made products generated on demand using subpar labor practices. The characteristics that limited their competitors also acted as a stopgap that blunted the effects of this quick growth.
Now that Netflix’s business is mainly streaming and production, it is difficult to contain its drive for unbounded development. Where a conventional network concerns itself with spring and fall release schedules, Netflix thinks in months — and striving to reduce the churn of subscribers leaving its service month-to-month has forced the company to become much more shortsighted. The limitations of a normal broadcast schedule also protect networks from diluting their programming and putting out content without an audience. Netflix faces no such constraints.
Advocates will say that streaming productions don’t detract from traditional filmmaking, but in truth there is a finite amount of talent and money available. Like many problems of the internet age, the frictionless conveniences we take for granted exist in and are limited by material reality. Physical servers house all this content, real people have to make more of it, and there is only a limited amount of attention that can be paid to the “content” produced.
Netflix was able to drive Blockbuster out of business due to its relative ease of use, but for this same reason streamers risk overheating and depreciating their own product. As more companies introduce streaming platforms and maintain a strategy of escalation, they risk dooming their programming to the same fate.
Art by Algorithm
One common response to the fact that a smaller group of conglomerates control more of past, present, and future film distribution is: “This isn’t new. Corporate interests have always controlled film.” True — and without changing the relations between artists and the corporations, not only are we doomed to repeat the mistakes of the past, but also to watch as the technology itself only magnifies and accelerates these deficiencies into new and compounding problems that can only redound to the benefit of those who control them.
So it goes with the streamers, whose algorithms are diminishing the art form they’ve inherited. We need not retreat into Luddism, but cheerleading new technological advancements as if they have an inherent liberatory quality only serves as advertisement for interests in direct conflict with those of us who wish to see the future of cinema not be determined by profit-seeking. If this paradigm shift to streaming were going to usher in a new era of independent and creative filmmaking, shouldn’t it have begun to take shape by now?
When streamers trained audiences to overindulge in subpar comfort films and TV, they reduced the possibility that anyone would choose something more challenging. It’s little surprise that they’re failing to keep their promises to push the medium forward, as the same industry pressures that drove the former trend are now driving them to create bingeable and forgettable series, designed to hook viewers with the illusion of novelty and variety rather than to entertain and endure.
The efficient winnowing of creative or artistic sensibility from the business of filmmaking isn’t personal, so our critiques needn’t be either. Many talented, intelligent, and hardworking creators are now producing content for streamers, and some of it manages to be good, despite the odds. But should anyone be interested in ensuring that film can survive outside of the algorithmic precision of streaming distribution, then they should concern themselves with blunting the control of finance and tech on this art form.