Is Netflix in Decline?

The original streaming service is drafting on its reputation

Once upon a time, Netflix dominating the worldwide media market seemed inevitable. It was the first major streaming service, and for years after its catchy name became a slang term for watching stuff online, traditional media companies resisted changing their business models accordingly. The COVID-19 pandemic only sharpened this contrast. People stuck indoors naturally gravitated to the platform as a means of entertainment.

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But as new competitors have emerged and competing streaming services are now omnipresent in nearly every market, Netflix has been relying on production rather than distribution to distinguish itself. Stranger Things seemed to indicate a positive initial trend back in 2016 for Netflix’s original offerings, setting a tone where producers would stay out of the way and let creative teams come up with and execute their own ideas. It’s an impression that the show subtly emphasized by deliberate callbacks to mainstream 80s science fiction, which people produced under a similarly open approach.

Netflix still has its surprise breakout successes. Last year The Queen’s Gambit and Bridgerton stood out as ideas that likely looked fairly questionable in the pitch department but did much better in execution. But the competition has since greatly intensified. Despite the hold placed on the Marvel Cinematic Universe due to the pandemic, Disney+ has quickly rebounded with Wandavision, Falcon and Winter Soldier, and Loki all having massive influence in the zeitgeist. Even before Disney could get a real grasp on what it was doing, it didn’t take long for them to realize that they had a huge hit on their hands with The Mandalorian, a simple action series featuring the highly memetic Baby Yoda.

The margins between Disney+, Hulu, and HBO Max & Netflix and Prime Video continue to grow smaller, according to

Memetic intensity is how services create breakout hits these days, and it’s striking just how bad Netflix is at doing it. Netflix hyped Sweet Tooth  as the new great series of the summer but was so desperate to replicate Baby Yoda hype with a cute half-deer baby it ended up being kind of pathetic. Contrast that with Invincible, an animated superhero show on Amazon Prime of questionable production values that has gotten considerably more reach than it deserves simply because it stars J.K. Simmons as an evil Superman analog. The “look what they need to mimic a fraction of our power” meme that swept the Internet is relevant here. Netflix is the planes, while J.K. Simmons could be any one of the new Netflix competitors that can leverage their services in other markets to pull their subscribers.

In this sense, subscribers have become an increasing priority for Netflix, as the service struggles to maintain relevance. The improved worldwide subscriber performance in its second quarterly report this year belies the fact that Netflix is actually losing subscribers in the most important American/Canadian market. This solves the mystery of the lackluster earnings- Netflix is getting more subscribers in low-value territories where subscribers don’t pay as much.

This paradox emerges less because Netflix original series are a major draw overseas, but because of Netflix’s international distribution deals, which make them the exclusive international distributor of many high-profile local television shows that people outside of their home region can’t otherwise see. The South Korean drama business has been booming lately in part because Netflix has finally offered a distribution model for the many worldwide fans of South Korean dramas who have long been frustrated with the lack of legal options for shows featuring their favorite stars. Anime fans likewise get a lot of mileage from Netflix, with Demon Slayer proving a belated lucky coup for the streaming giant. Rick and Morty, of all things, is extremely popular on Netflix worldwide, despite it not generally being thought of as a Netflix program locally.

But such decisions at Netflix get little press compared to their weirder, more gimmicky creative decisions. Alongside its second quarterly report, Netflix promised that it would somehow get into the video game distribution service. Their most recent big profile release, the Kevin Smith-helmed He-Man remake, has grabbed attention more for the jarring disconnect between critics and fans as to the series’ reception. Critics loved the show’s serious woke take of a franchise most people have only vaguely heard of. Whereas He-Man fans, the actual target audience, were somewhat miffed at the show’s absence not just of He-Man but the snarky campy villain Skeletor, for whom they had high hopes after Netflix announced Mark Hamill would do the voice.

This is an odd turnaround from such movies as Bright and Bird Box, which critics hated, but viewers mostly liked. But none of these projects leaves much of an impact in the zeitgeist. A recent op-ed from Peter Labuza in the Los Angeles Times has argued that Netflix is pushing brand awareness rather than expecting anyone to actually watch anything on the platform. The bewildering decisions to pay big bucks and go into debt for major projects only to bury them under their often byzantine recommendation algorithms makes a lot more sense if their objective is to make a Monopoly-esque play to prevent other players from making revenue rather than actually making revenue themselves.

A glance at the FlixPatrol website, whenever you might be reading this article, shows that many actual Netflix viewers are content with schlock rather than the more prestige-aimed projects that get the headlines. The reality dating show Love Is Blind is cheesy by nature. And the resurgence in popularity for Manifest is inexplicable, but there’s no accounting for taste or viewer obsession.

There’s no real sense of craft to what Netflix does–they’re just following the trends rather than trying to create them. Their latest deal with Steven Spielberg’s Amblin Entertainment might be an effort to turn that around but even there we can see similar symptomatic thinking. We’re talking about the studio that made the Cats movie, with a reputation based more on Spielberg’s name than on any of their recent movies actually being memorable.

If you’ve ever thought to yourself recently that if you were going to drop any streaming service, it would be Netflix, you’re not alone. There are definite issues with the company’s brand and it’s looking increasingly doubtful they’ll fix them by the time other services get their own exclusive content running in full swing. But the real threat to Netflix will be both its American competitors entering international markets, as well as domestic competition. It’s getting increasingly difficult to argue that Netflix does what it does particularly well compared to any other service. It persists largely on inertia.

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William Schwartz

William Schwartz is a reporter and film critic based in Seoul, South Korea. He writes primarily for HanCinema, the world's largest and most popular English language database for South Korean television dramas and films.

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