The initial idea for Netflix was born, according to the story, during a visit to Blockbuster Video gone wrong. “I had big late fees for ‘Apollo 13’,” Founder and CEO Reed Hastings told the New York Times. “It was six weeks late and I owed the video store $40. I had misplaced the tape. It was all my fault. I didn’t want to tell my wife about it. And I thought, ‘I’m going to jeopardize the ‘integrity of my marriage for late fees?’
This origin story, which appeared in vanity lounge, Fortune, CBS and other outlets, is apocryphal; co-founder Marc Randolph thereafter disputed as “emotionally true” but “oversimplified”. But part of the reason this story has played so well with Netflix’s growing following — the reason it feels “emotionally true” — is that Blockbuster was, for various reasons, a villain. And so it was easy for Netflix to position itself to an enthusiastic following as a scrappy outsider looking to disrupt the video rental business.
If Netflix has entered its Blockbuster era, it’s hard to guess precisely what its spoiler will look like.
These days, however, the roles have changed. Netflix dominates home media consumption as much – if not more – than Blockbuster in its late 20th century heyday, its brand name being as interchangeable with streaming entertainment as Blockbuster was with video rentals. But a variety of unpopular decisions threaten to make Netflix the villain it once dethroned. Is he in danger of falling from grace?
Complaints from its customers and online reviews are not without merit. The company raised its subscription price earlier this year – the third such price increase over the past four years. But subscribers are increasingly paying more for less; its library of streaming movies and TV shows has been steadily decreasing for years, with the streamer diverting most of its budget for licensing fees to producing originals and in-house acquisitions (and increasingly losing streaming rights to competing services). The library of its DVD-to-Mail service, originally the cornerstone of the operation, has shrunk in the same way in the shadow of himself. And countless beloved Netflix original series — “GLOW,” “The Babysitter’s Club,” “American Vandal,” “Mystery Science Theater 3000” and “Sense8” among them — have been abruptly canceled, infuriating their eager fans.
And what is this increase in fees for? Increasingly dodgy material – sloppyly assembled true-crime docu-series, rinky-dink Ryan Reynolds vehicles, carbon-copy rom-coms and expensive “comedy specials” from transphobic and has-beens. (When Netflix’s comedy account, “Netflix is a jokeposted a dated and unfunny joke from his new Jeff Foxworthy special, several of the hearty @-replies quote tweets specifically mentioned the price increase.) Meanwhile, the company is trying to further enrich its coffers by cracking down on password sharing, contrary to the suggestion of (checks notes) the official Netflix Twitter account, which tweeted in 2017, “Love is sharing a password”.
This recent proposal – an attempt to increase subscriptions, as growth has otherwise slowed – could amount to the digital age and the streaming age of Blockbuster’s much-hated late fees: a transparent cash grab for something everyone else has done, and which ultimately amounts to a small financial hit for a comically well-funded media company. To be sure, the villainy of Blockbuster was rooted in different issues: how he used his deep pockets to bankrupt mom-and-pop video stores and small chains; how he focused, with Netflix-esque determination, on new releases rather than catalog titles; how his “no NC-17” model forced pissed off filmmakers like David Cronenberg, Darren Aronofsky and Abel Ferrara to create bastardized versions of their films; how he used high rental prices and peculiar and often changing due dates and times to rush his customers. He was ready to rock; Netflix came at the right time, with the right alternative.
If Netflix has entered its Blockbuster era, it’s hard to guess precisely what its spoiler will look like. It can be an unpredictable business model or a technology that is still unimaginable. Or it could just be that other services are now doing what Netflix did initially, only better. Amazon Prime and HBO Max have much better movie catalogs, Criterion Channel easily surpasses Netflix in classics, Hulu beat Netflix by a mile on TV shows, Disney+ is the choice for kids, and Shudder is the place where to go for original genre films and series. Once upon a time, Netflix felt like a one-stop-shop; these days it’s just one of many streaming services you have to set up for a full set of viewing options.
Netflix is still easily on top – its 222 million subscribers worldwide still nearly double its closest competitor, Disney+ (to 118 million) – so maybe it’s nothing to worry about. But its rivals are gaining ground, and Netflix is starting to lose the long-term battle for hearts and minds fought in the trenches of PR and social media. He quickly transformed from a David to a Goliath, and while his origin story may have been somewhat debunked, he can still learn from his lessons.