The State of Netflix in 2022: Reports Of Their Death Were Greatly Exaggerated

Christopher Nolan’s The Dark Knight put it best: You either die a hero, or you live long enough to become the villain. That is exactly the era Netflix has entered into over the past year as the country began to emerge from its collective COVID trauma. The streaming service that was once praised for revolutionizing the entertainment industry has been the center of several articles and arguments all wondering the same thing: Are we witnessing the fall of Netflix?

It’s an enticing narrative, for sure. But when you dive into Netflix’s 2022, it isn’t one that holds much water. The dull truth is that Netflix doesn’t look like it’s poised to dramatically fail or ruthlessly crush its competition. Netflix is, in fact: fine.

…But that doesn’t mean everything is dandy. If you take a closer look at the highs and lows of Netflix over the past year, we get a look at how the streaming industry at large may be changing. The bottom line? Netflix is still royalty, but it may have to share its crown sooner, rather than later.

The “Netflix Is Doomed!” Argument

There’s no doubt that Netflix experienced some major blows in 2022. During its first quarter, the streaming giant experienced its first loss of global subscribers, to the tune of 200,000 net customers. That was followed by a loss of 970,000 net subscribers in its second quarter, a number that fell short of Netflix’s original estimate of 2 million. By the way, both of those quarters marked the first times Netflix’s subscriber counts had ever dropped. And back in August, CNN reported that Netflix’s stock had fallen nearly 60 percent.

As of now, this stock drop isn’t quite as dire as it was months ago, and this fall Netflix showed some subscriber growth. But still: it’s not great.

And if you think these numbers aren’t painting a great picture, the less easily measurable elements of Netflix aren’t much better. This past year, Netflix had two rounds of layoffs: 150 jobs in May and 300 jobs in June. That first wave of layoffs included 26 employees part of Tudum, Netflix’s in-house publication, which garnered a fair amount of negative press attention. That initial 150-person layoff also included 70 positions in the streamer’s animation studio, and 30 more animation jobs were cut in September. Once again: Not great.

In the midst of all of these headaches, Netflix’s content suffered some minor blows as well. Netflix canceled several shows throughout the year, which is nothing unusual. But there were two shows that were positioned to be staples that failed to secure a second season: the live-action Resident Evil; and the D. B. Weiss and David Benioff-produced The Chair. Similarly, the Steve Carell-led Space Force failed to secure a third season. None of these flops were devastating to the streaming service, but they still cost money. Sinking money into failed projects is never a good look.

But truly the biggest anti-Netflix argument has to do with its competition. As Netflix was losing subscribers at the beginning of the year, Disney+ was gaining them. As of this fall, Disney+ has 164.2 million subscribers to Netflix’s 223.09 million. Not bad considering that Disney+ launched in 2019. HBO and HBO Max beat Netflix when it came to both Emmy nominations and wins. Similarly, Apple TV+ — the streamer that has most clearly copied Netflix’s old strategy of give creative people a ton of money and turn them loose — had a solid turnout for the historically difficult-to-infiltrate Emmys. Whether you’re focusing on subscriber growth, awards potential, or arsenals of talent, Netflix faced a lot of competition from all fronts. Pair that with its rough two quarters, stock fall, and bad bout of press, and it may be tempting to write off the behemoth.

The “Netflix Is Fine” Reality

…But writing them off would be a mistake. When you look at the rest of 2022, most of the hand-wringing over Netflix’s fall starts to disappear. For example, in the third quarter, Netflix didn’t lose subscribers, but went back to gaining them. Specifically, it gained 2.41 million subscribers, which was more than double its predicted increase of 1 million.

And let’s take another look at those layoffs. Mass firings look bad, but they’re not always a death toll for a company. They can also indicate that a company is pivoting its focus, especially after a bad quarter. Framed this way, Netflix’s layoffs appear less dire and more like the actions of a company trying to right its ship in real time.

Also, for as bad as the first half of 2022 has been, the second half has been pretty great. 2022 alone has produced two of the three shows Netflix claims have garnered a record-breaking 1 billion viewing hours. Those are Stranger Things 4 and Dahmer — Monster: The Jeffrey Dahmer Story (the third was 2021’s Squid Game). This year was also responsible for Bridgerton Season 2, Inventing Anna, The Watcher, the first half of Manifest Season 4, Ozark’s final season, Love Is Blind Season 3, and TikTok’s latest obsession, Wednesday. This is all to say that Netflix released a long list of shows that took off this year.

Chances are high that trend will continue as we look to Netflix’s future. Later this month will see the premiere of The Witcher: Blood Origin, a prequel to one of Netflix’s biggest franchises. That will be followed by The Witcher Season 3, which is expected to premiere next year, along with You Season 4, the second half of Manifest Season 4, and Shadow & Bone Season 2. All of those are major projects with big fanbases that are nearly guaranteed to keep subscribers pressing play.

But wait; there’s more! All three of Netflix’s most-watched series — Squid Game, Stranger Things, and Monster — have been renewed for additional seasons. And even though we’re going to be losing Stranger Things, it seems like the Duffer brothers aren’t planning to leave Netflix anytime soon thanks to their deal with the streamer. Speaking of adored Netflix creators, Netflix’s deals with Ryan Murphy and Shonda Rhimes are still in play, meaning these creative geniuses could drop another hit on us any time. Bridgerton has been renewed through Season 4, so that leaves room for another steamy hit. And though The Chair may not have worked out, having Game of Thrones‘ Weiss and Benioff in the streamer’s court is still promising, particularly when it comes to their upcoming project, The Three Body Problem, a beloved sci-fi novel series.

There are other anticipated upcoming projects to consider, including the live-action Avatar: The Last Airbender, the live-action One Piece, and David Fincher’s next movie The Killer. And let’s not forget Netflix’s game-changing focus on international content. Shows like Squid Game and Money Heist have proven that just because a series may have been created with a certain region in mind, that may not stop it from becoming an international success. That sort of global-first thinking is something that other streamers lack and is increasingly becoming a unique advantage for Netflix. Each of these projects and the dozens if not hundreds more we don’t know about is an opportunity for Netflix to increase its subscriber base and reestablish its place as an industry leader. And when it comes to that latter point, Netflix really doesn’t need much help.

Even during its lowest months, Netflix has remained the biggest name in streaming. That’s because Netflix, like Kleenex or Coke before it, has become the brand default. You don’t get Disney+ Down and Dirty or HBO Max and Sax* (*Sex). You Netflix and Chill. That sort of brand recognition is difficult to shake, even after a couple of rough quarters and a slew of bad press. When subscribers are looking to decrease their streaming budget, their tried-and-true Netflix account probably isn’t going to be the first service on the chopping block.

There’s not even much evidence to indicate that subscribers are planning to decrease their streaming budget. A survey mentioned in Nielsen’s State of Play revealed that 93 percent of Americans planned to either increase their paid streaming services or make no changes to it. Another survey from the same source claimed that more than two-thirds of customers didn’t cancel any services in the past year.

Netflix’s new ad-supported plan will likely also make room for even more subscribers while giving the company another, previously untapped revenue stream. Given all of that, it feels foolish to claim that we’re witnessing the fall of Netflix. I’ve said it before, and I’ll say it again: Netflix is fine. But instead of declaring a winner, the streaming wars may be paving the way for a new TV landscape.

Netflix Will Be One of A Few Winners

It’s not that any one service will become the king of streaming. It’s that there will be a few streaming kings. This is a model that dates back to the studio system days of Hollywood. Whether you’re talking about film or television, there have almost always been a handful of studios or networks that have controlled the landscape. When Netflix released its first show in 2013, it challenged the tried-and-true network old guard. Now the war is nearly over, the dust is settling, and it seems like our new television leaders are emerging.

It’s not insane to imagine Netflix, Disney+, and whatever Warner Bros. Discovery decides to do as our new definite industry leaders. Maybe even Hulu or Apple TV+ will make the cut. But no matter what happens, Netflix will likely be at the front of this pack for the forseeable future.

Predicting the fall of Netflix has become a fun media hobby over the years. But these sweeping narratives intentionally avoid the often-boring truth. Netflix got where it is today because it’s good at finding gaps in the industry and staying flexible. So let’s put this tired argument to bed: Netflix is here to stay.