Posted on 07/18/2026 6:56:42 AM PDT by Chickensoup
Interesting Graphs at source
That’s because savvy investors on Wall Street now grasp what’s really going on. They fear that the root cause of Netflix’s woes portends the collapse of the dominant business strategy in tech today.
This is hugely important—and not just for investors or technocrats. All of us will be impacted by how this plays out. And I have a strong hunch that what is bad for Netflix might just be good for you and me.
That’s because Netflix’s failed strategy is audience capture. And you and I are part of the audience it wants to keep in captivity.
More on that below—but let’s start by looking at damage done to Netflix’s stock. When I warned about it in June, the price had already dropped 45%....
The Honest Broker
The Collapse at Netflix Signals the End of Audience Capture The most popular strategy in the tech world has stopped working. That's good news for all of us. Ted Gioia Jul 17, 2026
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Please support The Honest Broker by taking out a premium subscription (just $6 per month). Type your email... Subscribe A few weeks ago, I warned about problems brewing at Netflix (and other streaming platforms). In just the last few days, these problems have gotten worse, much worse—and the situation has reached crisis proportions.
Even more revealing—the crisis is now spreading through the tech world like a wildfire. It’s no exaggeration to say that Netflix dragged down the entire NASDAQ today, after the release of its disappointing quarterly results.
Source That’s because savvy investors on Wall Street now grasp what’s really going on. They fear that the root cause of Netflix’s woes portends the collapse of the dominant business strategy in tech today.
This is hugely important—and not just for investors or technocrats. All of us will be impacted by how this plays out. And I have a strong hunch that what is bad for Netflix might just be good for you and me.
That’s because Netflix’s failed strategy is audience capture. And you and I are part of the audience it wants to keep in captivity.
More on that below—but let’s start by looking at damage done to Netflix’s stock. When I warned about it in June, the price had already dropped 45%.
But today, shareholders woke up to this.
Source After today’s debacle, Netflix will have wiped out the entire last two years of stock price gains.
This is usually where I take a victory lap, and point out that I warned of the danger three weeks ago. But there’s bigger story here that must be told.
The disappointing revenue report yesterday is just the tip of the iceberg. The company’s reluctance to provide viewership numbers is an even more revealing sign of how bad things really are.
Netflix once bragged regularly about its growing user base. But yesterday they refused to share updated viewership numbers until 2027!
Source Yet even without those metrics, I’ve seen evidence of a coming corporate collapse—but only if you dug into the numbers.
Last week, for example, we learned that Netflix’s audience is skipping the second season of the platform’s hottest offerings.
Source: Flowing Data That’s scary stuff for Netflix. But it gets worse. The audience is also losing interest in the platform’s brand new series.
Source The situation is so dire that even Netflix’s biggest new series of the second quarter failed to get renewed. But if the platform can’t count on its new hits, will anything save it?
Source Netflix doesn’t want to tell us about users canceling their subscriptions. But just go over to Reddit and other platforms where people say what they really think about the company. You will get an earful.
This is typical:
Funny I was talking to my wife about how Netflix has practically nothing left we want to watch and maybe it was time to move on. If this price increase goes through that would be the final straw. I suspect a lot of others are getting close to that limit….
Another frustrated customer didn’t even make a comment—just shared some numbers. But the numbers paint a dismal picture.
Source Netflix got into this mess by pursuing a simple strategy: (1) Reduce the number of new scripted series (which peaked in 2022), but (2) Raise subscription prices.
That is the “audience capture” strategy mentioned above. The idea is that the audience got captured years ago with cheap subscription prices, and now the platform can squeeze them mercilessly—offering less and charging more. Netflix has been pursuing this agenda for several years now.
Ah, but Netflix isn’t the only company building its future on audience capture. It’s getting used at almost every streaming platform. And even companies outside of the media space are practicing variants of it. You see it at Google, Meta, X, Apple, etc.
It’s shocking how many companies have learned this technique. The entire printer and toner business is now built on audience capture. The same is true of the software industry—don’t even get me started on my Microsoft Office subscription fiasco. And, of course, all those customer loyalty programs (variants on the frequent flyer gimmicks that started this craze years ago) are examples of the same stale strategy.
Even the AI world is turning into an audience capture business—both for itself and its customers. This is one of the key reasons for my frequent criticisms of AI slop. It feeds into step one of the strategy outlined above. The companies use AI to reduce the cost of content, thus boosting margins while reducing their dependence on human creators.
Audience capture has always existed, but never to this extent. When I consulted at BCG we called it a milking strategy, where you raised prices and reduced capital investment in a business—which was now your cash cow. You squeeze all the money you can from it, for as long as you can.
But back then we realized that milking only worked in the short term. Eventually you killed the cow. And the risk is the same today with “audience capture”—which is just a new name for that poor old bovine.
Sooner or later, the audience refuses to be held captive. And that’s happening now at Netflix—hence the stock sell-off.
But it’s happening elsewhere too, although few are paying attention. Look at the share price at Spotify or Disney for ther examples.
Did you know that Mark Zuckerberg’s social media empire has stopped growing? In the first quarter, Meta saw a decline in users for the first time in the company’s history.
Source: Social Media Today This is not just a coincidence. Meta is the king of audience capture, and when it starts losing that audience, other tech companies ought to pay attention.
You should expect to see more problems of this sort at audience capture corporations. And that’s bad news for the technocracy, because this manipulative strategy is everywhere. If it stops producing results, they will need to take drastic steps.
But their nightmare is our blessing. That’s because the end of audience capture means tech companies will need to return to serving customers, not holding them in bondage.
They aren’t ready to take that step—not now, at least. Pleasing customers is hard work. Milking cows is a simpler business. But they won’t have a choice. The cattle are finally resisting. They might even stampede!
Moo, moo, moo!
Sometimes even cattle fights back (Source: Paul J. Everett) I give the leading audience capture companies 12-18 months at most before the worst consequences of their overreach hit their financial statements. And it may happen even faster.
If they were wise, they would start acting now. But whether they fix the root cause of their audience capture mess now or later, the end result will be the same. That captive audience will find itself liberated.
If I’m right, this may represent the biggest shift in the consumer economy of our time. So check back here for updates—because this will be a bumpy rodeo ride for all parties.
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The article is verbose and nearly incomprehensible. Author could have and should made his point in three short paragraphs.
Everyone’s a critic.
These tvs all track and report.
Nobody could replace Robert Osborne, but I do like Dave Karger; he obviously loves movies and talking about them, and his joy with the topic is contagious. The other hosts seem to be going through the motions. And the chore of selling their newer movie additions to the original audience doesn't make it easier for them.
Gore Verbinski (the first three Pirates of the Caribbean movies, Rango, some others, some misses) was on the publicity circuit earlier this year for Good Luck, Have Fun, Don’t Die, his first independent film. The one certainty about Verbinski is that he will try to be original. He will take big swings and take chances.
He has been saying the big studios — now mostly owned by the streamers, with the Big Tech newcomers being the deepest pockets in the game — are like the dinosaurs just before the asteroid hit and wiped them out.
They’re so big, so bloated, so locked into a high cost, risk averse, prequel/sequel/spinoff formulaic approach that they’re in a death spiral.
But the good news is that after the asteroid hit, the survivors included a bunch of scrappy, furry, highly adaptive critters that he refers to as the big rats.
His mantra is that something will survive the asteroid, and the future will be built by the most clever of the scrappy, furry, big rats.
The low budget, ultra low budget, and micro-budgeted movies can survive the death of the dinosaurs. And while Verbinski doesn’t say it, the scrappy, adaptive, smart furry critters will have to compete with the other inevitable survivors, the cockroaches. Which I think of as the TikTok content providers.
Some of the streamers seem to think they’re competing with TikTok. They can’t get dumb enough fast enough, but they’re intent on making movies and shows designed as background noise for viewers who aren’t paying attention and who have ten second attention spans.
Good movies are still being made. They still draw audiences who sit quietly and watch attentively. We need an ecosystem that supports them, and the streamers ain’t it.
Tubi.
Back when you still could, we piggybacked on our daughter’s Netflix. Found nothing we wanted to watch.
Isnt that a streamer?
Content is king.
Crap on a different streaming service is still crap.
We watch YouTube.
Lots of choice and far, far better content.
Netflix, like many entities, pursued the “subscription” model whereby you join and get automatically charged a monthly fee for membership, and they deliberately make it quite difficult to unsubscribe (should be as simple as logging in and clicking “unsubscribe” but it’s not, or at least it wasn’t in the past.
I used Netflix for a couple of months a few years ago to binge-watch Breaking Bad and then Better Call Saul (yeah, I know, not high end entertainment but funny to me nevertheless). But I used one of those cards you buy at the store so when it ran out, they couldn’t automatically renew me every month. I had an exit plan and exercised it.
I think people should avoid the subscription model as much as possible. Auto makers want to attach it to features on the car, though I haven’t read much on that. I mean, you buy the car and it’s YOURS to keep and do with what you please. But the greedy automakers see profits in selling, say, heated seats at $13 a month or some such nonsense. And with the way cars are wired today, you can’t as easily bypass their nonsense body control module. Yeah, it’s possible, given enough wire and switches - but not practical for most.
Nope, you want a product you buy it and own it. Otherwise, they own you.
That's what turned me off to Netflix. Had just finished reading "Dracula" and "Frankenstein" again after decades and saw this series "Penny Dreadful" that featured some gothic horror characters. There was a clairvoyant, a traveling Wild West performer who would later prove to be a werefolf, a Frankenstein and his creation, Jekyll and Hyde, Dorian Gray, and vampyr antagonists - all set in Victorian London.
Sounds like a true monster mash - but then a little later into the series the sharpshooter cowboy hero werewolf guy turned into something truly horrifying - a FAG!
I was done at that point. With the series. With Netflix. Done! The leftists ruin everything they touch.
There's a good deal of truth to that. Like, say, medical insurance. Not just catastrophic insurance coverage, which used to be the norm, but insurance so that you won't pay a single penny to get a bandaid when you scratch your hand while working in the shed. No, gotta cover everything, and that costs a ton of money. Also, you insured gotta pay extra to cover for the illegals that get free medical care by simply saying "no habla English" when they walk in the emergency entrance with a common cold.
Matt walsh has an episode on subscriptions on YouTube
I get Tubi from my tv/Roku/Internet. I think all t.v. series and movies are funded through advertisements. It’s all available on demand. It is somewhat comparable to broadcast tv of the past, but better. Like the old broadcast tv, it is free with ads. Unlike broadcast tv, you can watch on your schedule, not their schedule.
The one shortcoming I experience is the lack of sports programming.
Apparently, there are two ways to get sports. One is to pay more, for example HULU/ESPN. The other is to set up an antenna. I understand the second option may disappear in a few years due to the implementation of existing legislation.
I’ve seen ads for two-dimensional antennas that look like a large sheet of paper (though black). I wonder how well they work.
It is astonishing. You know that meme "This is my superpower..."
That is theirs.
We use an antenna when my brother comes up for football.
It works well. However I noticed the broadcast towers have diminished when last set up.
After close to 30 years without broadcast or cable just films and not many; TV with ads is too high a toll to pay. I think people who are used to it are able to ignore them.
I would always be happy paying a no ad streamer. Just me.
They work well
Sounds like tptb are going to sunset broadcast? Pity.
I had been thinking of putting a permanent antenna on the roof for brother. Guess not.
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