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
Today’s culture briefing is free for everyone. Enjoy!
If you value analysis of this sort, consider taking out a premium subscription.
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.
I had been thinking of putting a permanent antenna on the roof for brother. Guess not.
I had been thinking of putting a permanent antenna on the roof for brother. Guess not.
Britbox and Acorn are both great no ad streamers.
Net Flix is a more expensive no ad streamer.
I suggest you try Britbox and watch all the old stuff that is not influenced by the WOKE culture of the last 10 years or so.
Both have Canadian, Australian and New Zaland programming that is very good.
Looks like broadcast will end in states by 2028 to 2030. Some are advocating that there will be rural access.
I suggest you try Britbox and watch all the old stuff that is not influenced by the WOKE culture of the last 10 years or so.
Both have Canadian, Australian and New Zaland programming that is very good.
.....
Already did that.
Some remarkable programming. Have bought a couple of the series because of their quality. Never have found a lot that compares.
I have compiled 2 lists for fr. A recommended television. And a recommended film. Happy to pass them on.
I suggest you try Britbox and watch all the old stuff that is not influenced by the WOKE culture of the last 10 years or so.
Both have Canadian, Australian and New Zaland programming that is very good.
.....
Already did that.
Some remarkable programming. Have bought a couple of the series because of their quality. Never have found a lot that compares.
I have compiled 2 lists for fr. A recommended television. And a recommended film. Happy to pass them on.
I suggest you try Britbox and watch all the old stuff that is not influenced by the WOKE culture of the last 10 years or so.
Both have Canadian, Australian and New Zaland programming that is very good.
.....
Already did that.
Some remarkable programming. Have bought a couple of the series because of their quality. Never have found a lot that compares.
I have compiled 2 lists for fr. A recommended television. And a recommended film. Happy to pass them on.
The thing to note is that Breaking Bad and Better Call Saul were both AMC shows that Netflix picked up for distribution after they had established themselves.
Netflix has some good movies scattered around in all the mediocre filler content. Almost all of them originated somewhere else and rode the lease circuit to Netflix, which will have them until they roll somewhere else.
Netflix is still a distributor in its DNA. It got into production when the synergies minded MBAs all got high on the idea that anyone who wanted to play anywhere in the pixelverse had to be a streamer. Once everyone got into the game, other companies started siloing their best stuff on their own platforms. It got harder and more expensive for Netflix to license anything good. But in its own attempts to produce good movies and shows, it has earned a reputation for mediocre formula driven content.
When a good movie does pop up on Netflix, it's worth checking to see where it originated. If Netflix does come up with a good "Netflix original," it's often an indie film it picked up out of the festival circuit, or perhaps even late enough in development that the Netflix suits didn't get a chance to turn it into slop.
That said, Netflix does come out with a good movie from time to time. They tend to get lost in the content firehouse from a company that wants to be the cinematic WalMart to the world, but there are some competent people burrowed in here and there. The reason Netflix was so hot to buy WBD is that it knows it needs to up its game, and it thinks buying a prestige legacy brand is a shortcut to doing it.
The problem is that Ted Sarandos has been outspoken for years about saying that the theaters are dying dinosaurs, box office doesn't matter, and everything should stream. The best people on the creative side know that movies in theaters are different from movies for crosstalking, doomscrolling, couch potato viewers, and they'll only work with Netflix as a last resort. Or if Netflix coughs up a really big check to buy a token film for the awards circuit, to camouflage Netflix's reputation for mediocrity.
The only reason we still have Netflix is that my wife tends to binge watch shows, and Netflix floods the zone there. The only time I watch anything on Netflix is if I've searched out an older film that I want to rewatch, or at least refresh my memory on something in a key scene, and Netflix currently has it. They're usually not Netflix originals. Netflix was a terrific distributor. It's a third rate production studio. We were better off back when Netflix mailed out DVDs and movies still got real theatrical runs.
I like buying from Fandango. You can buy or rent a movie (rent for one time viewing). You can pay for an episode, season, or complete series of a TV show. No ads.
They also have free (ads) viewing.
It all seems very clean to me. No monthly subscription. Just get what you pay for.
If you create something, the worst thing you could ever do is let Netflix get their hands on it. They’ll twist your creation into something unrecognizable.
I would imagine that is very true.
Old Freeper WindFlyer is remembered every time I see your name.
Fandango is owned by Versant, which was spun off by Comcast. Versant took most of the Comcast/NBCUniversal cable networks that were stale and declining. Does Fandango offer more than Comcast/NBCUniversal projects?
Comcast announced just a couple of weeks ago that it is now going to spin off NBCUniversal (which owns Peacock) in it entirety, the theme parks, and assorted other entertainment properties. These will all be dumped into another standalone entertainment company, which I will guess is probably headed for a quick takeover by some larger streamer that wants to mine its sports portfolio and cherrypick its catalogue of shows.
Comcast appears to have gotten tired of losing money on streaming and to be pulling the plug on the great streaming experiment. And the sooner the streaming fiasco is unwound, the better.
MGM is now owned by Amazon.
My first biggest problem with streaming is that it has so segmented the audience that movies and shows are not available to most of the potential audience. This undercuts the scalability that incentivized studios to take risks, invest in quality and swing for the fences. In the olden days of linear tv, we had to live with commercials but viewers could just turn the dial and watch anything on offer from any network. Movies in theaters were in the public forum; man up, buy a ticket, and go watch whatever. There was universal access (leaving aside the freepers holed up in bunkers in Idaho). Now if you get wind of a project that interests you, it's a snipe hunt to find it -- and you often don't even hear of good stuff that might interest you because it's siloed away somewhere to which you don't subscribe.
All of this undercuts the potential viewership -- and it's no accident that the streamers treat their real viewership numbers like state secrets. The dirty little secret is that in a highly segmented marketplace, viewership for most movies and shows is embarrassingly low. And that undercuts the incentive for the studios to invest in quality, because there is very little growth potential if most potential viewers are quarantined.
The idea when the streaming craze hit was that movies and shows would drive subscriptions. That hasn't happened, and it is especially hard for original movies and shows to build the buzz that can lead to big breakouts. That in turn pushes the studios into prequel/sequel/spinoff/tentpole disease, so they can milk large fanbases of legacy franchises developed back before streaming poisoned the ecosystem.
My second biggest problem with streaming is that the streamers know that most of their audience is NOT paying attention. Casual couch potato viewers are crosstalking, doomscrolling, hopping up for refreshments and bathroom breaks, texting, etc. rather than focusing on the show. Sure, some viewers will turn off their phones, concentrate on the movie or show, and watch with rapt attention. But they are a tiny minority and the streamers know it.
So the streamers are telling their writers and directors to dumb things down. Simplify. Switch from show don't tell to tell, and tell again, and tell again, because if you don't tell audiences what is going on every ten minutes, they'll lose the plot and switch to something else. Pick up the pace because the audience needs something dramatic, violent or sexy to happen every ten minutes or it switches to something else.
Meanwhile, back in the real world, people are finding that older movies and shows are better than most things made today. Even young people spend most of their time binge watching older shows, if they're not watching YouTube or TikTok. The reason is that older movies and shows were made for audiences that were paying attention, and the streamers are abandoning that part of the audience.
Movies made for people who are paying attention are very different from movies made as background noise for people who are NOT paying attention.
What do the streamers spend big bucks on? Sports, because sports are live events. That creates urgency, and urgency drives subscriptions. Secondly, they are spending big bucks on buying each other, because an industry caught in a qualitative race to the bottom will want to reduce competition and consolidate, so that a cartel can more easily raise prices.
Yugos would be considered great cars if that's the only thing consumers can buy. Public school systems work this way. Socialized medicine works this way. Entrenched monopolies in the private sector work this way. Henry Ford saw no reason that cars should be any color other than black, which made things simpler for his assembly lines. But Henry Ford had real competitors.
Sitcoms would be perfect. We used to have a lot of them.
But we're not allowed to do comedy.
After all, we don't be racist or sexist.
The best “Netflix original” I’ve seen in several years was Nouvelle Vague, which is a Richard Linklater passion project about the French New Wave, with the film centered on Jean Lu Godard’s madcap production of Breathless, which turned out to be an unexpected classic.
I know nothing about the French New Wave or Jean Luc Godard, but even I know the names — and they’re joined by calvacade of cameo appearances depicting legendary figures of that period. I don’t know anything about them either, but even I recognized a lot of the names.
Anyhow, Linklater had been working on this for 15 years. I don’t know when Netflix got involved. It could have been very late, an indie film that Netflix picked up for distribution. Or Netflix might have gotten into it earlier, which would raise the threat of the Netflix suits ruining it. Whether Linklater was forced into any compromises to get Netflix’s check, I don’t know, but ....
The film is wonderful. It is a genuine throwback film, done as an homage to an era and some people that Linklater deeply respects. For me, it was a window into a world that I know existed, that was a big deal at the time, and that is said (how would I know) to be a turning point in the development of modern cinema. That made it interesting, as an historical piece. Breathless was shot in 1959, just before the world went crazy. Even the Young Turks who will become the lions of avant garde French cinema in the 60’s and 70’s spend most of their time in coats and ties, and they behave with impeccable manners. Some of them ended badly, but that’s all in the future and does not come into the film. And oh yeah, everyone smokes constantly, because it’s France and a cultural period piece.
(Can we cancel the 60’s and start over?)
But beyond that, the movie is both charmning and downright funny, in a very dry, sophisticated, understated way. If you watch it, however, you have darn well better be paying close attention. It stands out like a sore thumb against virtually all new content on Netflix. My guess is that Linklater had enough prestige, and was far enough along before Netflix got involved, to have some real bargaining power. But that is increasingly rare, and the streaming ecosystem is stacked against it.
So: it’s not impossible for good stuff to emerge from the sludge factories. But streaming makes it much harder than it should be.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.