1. Netflix: Dominant then, dominant now
One of the lead stories in our debut edition revolved around Netflix racking up more Oscar nominations than any other studio or distributor for the first time. This was a huge deal back then, since it signaled the streamer would be able to reshape the film business in much the same way it had already transformed television. Five years later, what’s most remarkable to me is how — despite a few bumpy moments and the emergence of several strong competitors — Netflix still sets the pace in Hollywood. It’s the benchmark against which every other streamer is judged, and its successes (and failures) have resonated through so much of what we’ve covered here in Buffering.
For instance, when now co-CEO Ted Sarandos decided to push out his longtime deputy Cindy Holland in 2020, it was first and foremost a story about Netflix moving away from the premium, critic-friendly fare that marked its early years and toward its current status as the 21st-century equivalent of CBS in its Tiffany era: a mass broadcaster able to churn out everything from Mister Ed and The Beverly Hillbillies to The Twilight Zone and Harvest of Shame. But in retrospect, Holland’s ouster — and Netflix’s pivot — also look like the beginning of the end of streaming’s mini Golden Age, when the industry spent billions not just on content, but on getting the most audacious, star-studded, and not-even-really-TV-anymore programming that money could buy. Netflix pioneered the strategy of luring customers by trying to out-HBO HBO; its pivot to the center pushed most of the rest of the industry to follow.
We saw this pattern play out multiple times over the last five years, even when Netflix technically wasn’t the first to do something. The streamer decided to begin selling commercials a couple months after Disney+ announced it would do so, but it was Netflix’s entry into the space that felt like a sea change for subscription streaming. Ditto the industrywide crackdown on password sharing, or the trend toward ending even successful series after just three or four seasons. And even though Amazon has been airing Thursday Night Football games for a few years now, and Peacock has done playoff games and the Olympics, Netflix’s recent Christmas Day doubleheader still felt like an event. Netflix doesn’t innovate like it once did, but almost anything it does still makes the biggest splash.
Last week’s earnings report from the streamer underscores this point. Netflix said it added another 40 million–plus subscribers in 2024 — 19 million in the last three months of the year alone — and now boasts just over 300 million paid global customers, giving it a reach of more than a half-billion potential viewers. And while its peers are still mostly swimming in red ink or barely eking out tiny profits, Netflix has turned into a veritable ATM: Instead of losing a few billion dollars every year, as was still happening five years ago, the company is forecasting profits in excess of $40 billion in 2025. Adding subscribers, double-digit profit margins: “This is what winning looks like,” analyst Jeffrey Wlodarczak of Pivotal Research Group wrote last week. This was true when Buffering first launched in 2020, of course, but that’s also the point: Despite the launch of several well-financed competitors, heavy spending from older tech rivals Amazon and Apple, and the usual laws of showbiz gravity, Netflix is still #winning. (And yes, that applies to Oscar nominations. It once again racked up the most noms of any individual studio.)
➼ Over the Next Five Years: Now that Netflix has gone from being seen as the cool future of TV to a generic word for TV, will brand affinity eventually start to suffer — not just among consumers but with the creatives Netflix relies on for programming? Or, as it has in the past, will Netflix continue to prove the doubters wrong?
2. Streaming became more like linear TV rather than the other way around
As the 2020s got underway, there was still a sense that digital, on-demand television was going to be a completely new medium, one very distinct from what we’d seen with traditional TV since the 1950s. Not only were there no channels or time slots, but the biggest streamers didn’t even bother with commercials, and compared to what we’d grown used to paying for cable, it was substantially cheaper. Well, the arc of the small-screen universe apparently isn’t that long, and in the case of streaming, it reverts to the mean.
The move of Disney+ to introduce an ad-supported tier (followed quickly by Netflix and Amazon Prime Video) was the most glaring example of this network-ification of the industry, but there were many others. For example, all of the upstart streamers launched over the last five or so years opted not to adopt Netflix’s binge release strategy for most of their new releases, thus preserving the linear tradition of doling out episodes of a show on a weekly basis. Instead of focusing almost entirely on expensive scripted programming, streamers started investing increasingly large portions of their budgets on live sports and events, less expensive reality shows, and true-crime docs. Rather than keeping prices low to attract (and keep) customers, platforms began implementing dramatic increases to their monthly subscription fees — while also cutting back on the number of new shows they green-lit and the size of their libraries of older TV shows and movies. Then, when those price hikes and content reductions started facing pushback from consumers, streamers took a page out of the old cable-TV playbook and began offering consumers discounted rates if they signed up for a bundle of services at the same time.
All of this was probably inevitable once legacy-media giants such as Comcast, Warner Bros. Discovery, and Paramount Global jumped into the streaming pond. These are the companies that shaped the linear-TV business for decades; of course they were going to bring their old habits with them. But that’s not entirely a bad thing, as evidenced by how quickly streamers run by tech companies adapted so many of these ideas. Apple might be the company that once urged us to Think Different, but its Hollywood wing knew that a series like Ted Lasso needed the sort of word-of-mouth buzz that can only be built via launching a show with weekly episodes. Advertising is annoying, especially when you’re already paying for a subscription, and yet cable thrived for decades with exactly that combination of commercials and monthly fees. At least with streaming, there’s still the option to pay more for an ad-free experience and the ease of canceling for a few months if a streamer’s programming slate isn’t meeting your needs.
I get that for many consumers, all of this seems like a case of dumb, greedy TV execs pulling a fast one in order to jack up profits for shareholders. And to be sure, there’s plenty of dumb and no shortage of greed in Hollywood. But the fact is streamers came into the market significantly underpriced relative to how much programming they offered and compared to what cable was (and is) charging. Netflix racked up billions in red ink getting you hooked on its version of streaming nirvana, and the legacy-media companies also went deep into debt trying to compete in the early 2020s — and most are still losing money, or just now starting to turn the tiniest of profits. Those heady days when you could pay under $20 for Netflix and Hulu and get just about every show and movie you’d ever want to see, plus binge watch the latest season of Breaking Bad or Mad Men a few months after its finale? They were never gonna last, and it’s not because David Zaslav is a Trump-friendly wannabe mogul who seems to delight in annoying as many fandoms as possible. Streaming needed to become more like regular TV because it needed to become profitable, and if there’s one thing network and cable TV were good at, it was making money.
➼ Over the Next Five Years: Will audiences revolt if prices get too high or the volume of commercials on streaming reaches the same level as cable? Or will the seemingly inevitable consolidation of streaming platforms and bundling of services result in a sort of equilibrium where consumers feel like they’re not getting totally robbed?
by Josef Adalian, Buffering/Vulture | Read more:
Image: Vulture; Photos: Everett Collection (Freevee, Ali Goldstein/Netflix), Apple TV+, Netflix
[ed. Revolt. See also: "The Infrastructure of the Recording Industry Is About to Fail” (HB).]
