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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.
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Click here: to donate by Credit Card Or here: to donate by PayPal Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794 Thank you very much and God bless you. |
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. Interesting Graphs at source
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.
Netflix should have never appointed the Obamas to the executive board.
up your alley? Interesting changes?
That is just the tip of it.
Content and corporate choices somewhat similar to the choices made by investment firms buying up and gutting Vet practices, CPA firms, Dentists offices, Counseling and Psychotherapists , Medical groups, Restaurant chains...
When that happens, will it still be worth an additional $10 per month or whatever the rate might be in the future? Maybe not for me.
I detest Bezos but Amazon Prime is tough to beat. Being able to easily subscribe to Peacock long enough to watch Yellowstone and then cancel when we were done was great. There is so much content available with the basic Prime that Netflix is pointless.
Here is an idea: Stop making crap programming and the audience will return.
I was looking at the top ten on HBO/Max the other day. It’s all junk from their basic cable channels.
Netflix spent so much time on little kid movies promoting DEI garbage…they simply burned through years of production. It’s going to take a couple of years for them to regroup and get decent stuff through the pipeline.
Hollywood just cannot get out of their own way.
We had a subscription to Netflix before they began streaming, when distribution of movies and features we done via the mail. When they went to streaming, we made that switch.
At some point, we noticed the programming they were offering made a distinct shift to the Left, and they they had an entire channel dedicated to homosexuality and sexual perversion.
I am no prude, but I couldn’t support what seemed to me to be a concerted and deliberate effort to promote immorality and abnormality in addition to standard Leftism.
We cancelled our subscription many years ago.
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.
I've spent my life as a free market "capitalist" kind of guy. Corporations need to make a profit, right? They need to employ people and they need to produce innovation which fuels an expanding economy, right?
But I look around these days and I see EVERY place squeezing their customers for every last penny. Meanwhile laying off as many workers as possible (illegal immigrants preferred? H1-Bs? AI? Doesn't matter -- just DON'T hire American workers -- those guys are too expensive).
The greed is off the charts. And in the 1980s when Gordon Gekko said "Greed is good", he had a bit of a point. But here we are 40 years later and greed is ruining the lives of a lot of people. Squeezing the workers and squeezing the customers is not a good long-term strategy.
One can argue that the strategy of “audience capture” is now failing, and the phenomenon will extend to other segments of the tech industry. But the reason is simpler and doesn’t portend a spread to other sectors of tech: the programming at other streaming services is getting stronger, especially at Apple+.
“Audience capture” is an intellectual way of saying forced monopoly, sortalike, well, state-run grocery stores. The reason capitalism works is because whenever someone attempts to take advantage of forming a monopoly, someone else disrupts everything with a new idea. Socialism has no new ideas, and no reward for creating a new idea, which is why it fails.
Netflix is so woke they’re almost unwatchable. I’ve started watching shows I thought I’d love…. Like George Washington and Thomas Jefferson. After 15 minutes, I knew I didn’t want to hear what they have to say. When they start with commentary from guys like Raskin, I turn the channel.
Be sure that the 0blama’s got their grift, before the collapse.
Yay.
“Audience capture has always existed” How often do you change car insurance? Bundling with homeowners surely this strategy on the company’s part.
The problem is a problem of success. They were the original and biggest at unlimited streaming for the single subscription.
That genre grew with even big companies entering the market -Amazon 2011.
Now everyone is streaming and the biggest ones building their library as both production of content and rights for exclusive viewing rights.
Even the older TV companies are moving into viewing with their own streaming channels.
The market Netflix opened up is now market divided up with many players.
Netflix will have to get into some the exclusive viewing contracts (like sports) and attract viewers besides its loyal viewers that like Netflix own productions.
Competition.
I read this yesterday and it confirmed my beliefs. Netflix was the beginning of the subscription/capture business model. Even more so than cellphones as cellphones became a necessity but watching tv is certainly not a necessity. Sure we had magazines and Columbia record clubs but Netflix made every company think they could capture, kill and continue forever. It led to things like resort fees and state/local government expanding feeing everything, including parking that should be free, to even today’s flock cameras. Once Netflix got away with it it was open season on America.
I escaped Netflix a long, long time ago.
How do we deactivate the four ‘nuisance’ buttons on the ROKU - for channels we will never watch.
I keep having to delete those channels after accidentally activating them.
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