Given that they were in trouble recently, I just don't buy the well-oiled machine line. They were screwing up. They made a load of cuts to both the amount of content they had, and the amount they were making, and fired a bunch of people, and they raised prices vastly beyond inflation, whilst squeezing really hard on password sharing. And you're saying, oh they're so smart, they'll keep making $$$ forever (that's how I understand "they've won" - maybe that's not what you meant though, but to me "won" implies nigh-permanence in this context), and I'm like, will they? They can't keep doing that repeatedly. You can squeeze password sharing ONCE ever. That's it. You're done. You can fire a bunch more people but then there'll be hardly anyone working there. If they raise the prices again by the same amount in the UK, they're going to go through £20 barrier, and I guarantee that will cause a lot of cancellations and annoyance with them generally (I dunno if the US has a similar perceptual barrier at $20 or if it's more like $30).
They've made themselves very profitable temporarily, after struggling.
I am going to address this briefly, given this seems to be a popular misunderstanding. Moreover, it seems to be driving your analysis (which I already detailed was ... not in keeping with the actual market conditions).
They did not make themselves profitable temporarily. At all. Netflix has
always been profitable. Looking at the trailing 12 months, they have been profitable since 2009. What is notable is that they have pivoted from being "kinda profitable" ($1-$3 billion) to "super profitable" (more than $10 billion). The trend was always positive, but was supercharged in the last four years ... and has remained at that level.
Why does this matter? Because Netflix is the only streaming company that is able to do that. Every other streaming company has been operating at a loss, and has been attempting to find some way to get to profitability (with the exception of Hulu, which is its own category, and largely because of the number of ad-supported subscriptions).
But what about those problems you might have heard about? Well, those weren't related to profitability. Instead, it was about Wall Street turning sour on the stocks- they hammered the stocks of streamers because they were no longer overvaluing them because of growth (in effect, subsidizing the acquisition of subscribers). But while the hit on the stock price wasn't great, and growth slowed, the underlying profitability was always there. Moreover, those issues hit other streamers much harder than Netflix ... because Netflix was actually profitable, and had the most subscribers.
Contrast that with the other streamers.
Prime is heavily subsidized, and is currently facing a massive lawsuit from the government regarding those subsidies. It is unlikely that they will continue to burn money for our benefit given the legal issues as well as the internal issues (which I have covered in prior posts).
Disney+ is heavily subsidized, and the parent company has a lot of debt and is struggling with a path forward given the amount of capital expenditures that are necessary (parks business, Hulu acquisition etc.) as well as the Peltz issue.
Paramount+ and Max are "pure plays" with libraries, but have not yet even hit the point of profitability, and have pivoted to licensing their content to other streamers in order to maintain profitability; in effect, going back to acting like more traditional Hollywood studios, and less like "walled garden" streamers than keep everything in-house.
Apple+ is subsidized and has high quality, but Apple has shown no signs of acquiring a large library or another streamer (perhaps for antitrust reasons) and has a small subscriber base. In effect, they are just burning money for our benefit. Great for us!
Peacock, because of the Comcast ownership, won't be allowed to fail, but is still an afterthought for most people.
As I've repeatedly mentioned, Reed Hastings, in 2013, said, "
The goal is to become HBO faster than HBO can become us.
" That's what they did. They licensed the content to start, and then (when the content was pulled back) they were able to make their own using the revenue from their vast subscriber base. And now we have gone full circle, and not only are they continuing to make content while maintaining profitability, but they are able to go back to licensing content and make it a hit since other platforms can't (
Suits, for example ... a show that was on Peacock that no one was watching).
This doesn't mean that they will be successful forever. They still have challenges; for example, they do not have a FAST service. And their ad-supported cheaper version is not as prevalent as they want it to be (fun fact- the services make more money per subscriber off of the "discount" ad-supported services than they do off the premium, ad-free services).
But of all the streaming services, they have positioned themselves best given the Wall Street retrenchment and the winds facing the industry.
Looking at this in terms of content you like doesn't matter in terms of the overall industry. Even things that you believe matter (such as Netflix cutting shows after a few seasons) ... doesn't actually matter. Why? Because while we can both lament this, the metrics don't lie. The vast majority of shows get more expensive as the seasons go on, and the viewership declines. Which means that for most of the shows, no matter how beloved, juice isn't worth the squeeze.
Anyway, the whole point of these posts was to cover the business side.