The Sophomore Slump
M.G. Siegler, commenting on the Bloomberg report that "Netflix’s biggest hits are losing more than half of their audience after one season":
To me, there are a few obvious problems here. The first is that a lot of the content just isn't very good. Yes, this is subjective. And yes, this quality concern has long been the case with Netflix – to the point that they have multiple times come out and said that they would start focusing on quality, not just quantity. And yes, none of this has really mattered in the past as Netflix growth continued unabated. But that didn't mean it would never matter. With streaming options maturing and rising in price, the others are getting pretty good at narrowing in on their niches and focusing on quality. Netflix remains the sort of fall-back must-have option, but it's increasingly seen as filler content. It's sort of like basic cable versus the premium cable of old.To make matters worse, YouTube is coming fast and furious to take this market. Thanks to their nature – UGC content amassing eyeballs to the point where everyone feels like their content must be there in some capacity – they're simply better at it than Netflix. They're infinitely better at scaling content and so it matters less if it's a ton of garbage – there are plenty of gems too. Because there's just everything! YouTube is really out-Netflixing Netflix.
In other words, Netflix is getting squeezed. Both from the top from better quality streamers like HBO Max, Disney+, and even Apple TV. And now from the bottom with YouTube – not to mention all the FAST services.
This is what it looks like to be in the business of amusements in the age of attention.
Netflix - like YouTube - wants to capture your attention. Netflix - unlike YouTube - does not make amusements, it makes professionally produced entertainment. Entertainment costs Netflix more cash to create and costs the viewer more attention to consume.
Netflix charges a cognitive tax that YouTube doesn't. And right now, the juice is not worth the squeeze.
Sidenote: it's interesting that the poorly-performing second seasons of The Night Agent, Running Point and The Four Seasons all debuted inside Netflix's YouTube-style user interface revamp "innovative new TV experience featuring enhanced design, responsive recommendations and a new way to search".
Does making it look and feel more like YouTube just amplify the weakness?
Cable TV dressed up as a UGC platform.