In the early 1930s, when Claud Cockburn worked on the Time, the sub-editors held a contest to see who could compose the most boring title. Cockburn claimed he won with “Little Earthquake in Chile.” Not many deaths”. Alas, after-fact checkers couldn’t unearth such a title from the archives, but it came to mind last week when Netflix announced in a quarterly earnings report that for the first time in a decade it had lost subscribers – 200,000 of them, to be exact. In North America, it had lost 640,000 and suffered additional losses in all other regions except Asia-Pacific, where it added a million.
That didn’t sound very interesting to this columnist, especially since it included the period when Netflix pulled out of Russia, where it had 700,000 subscribers, which I think meant that the reported loss would have been a gain of half a million if Putin had not invaded Ukraine.
Still, the negative 200,000 figure seemed to spook Wall Street. Netflix’s stock price crashed nearly 40% in two days, taking more than $50 billion off the company’s market value in the blink of an eye. It came as a shock because just over a month ago – March 8, to be precise – the company’s chief financial officer told a conference hosted by Morgan Stanley that the company was on a path to growth that “rather quickly takes us to a company that is over half a billion members”. But now, suddenly, that rosy picture has faded; the outlook has turned pessimistic and Netflix predicts it will lose another 2 million subscribers over the next three months.
So what happened? Why did a golden goose suddenly turn into a turkey? Possible explanations include the idea that Netflix’s precipitous growth may have been a blow caused by the pandemic lockdown. In this case, it’s a bit like, say, Zoom or Peloton, other former Covid recipients.
Another plausible hypothesis is that it is driven by consumer reaction to the new post-Covid reality of runaway inflation and a looming cost-of-living crisis. This is supported by the finding that it’s not just Netflix that’s affected; other streaming services are too. In the UK, for example, the number of subscribers to video streaming services such as Amazon Prime and Disney+ – as well as Netflix – fell in the first quarter of the year. According to a report, the number of UK households with at least one paid subscription to a streaming service fell by 215,000 in the first three months, ending a decade of almost uninterrupted growth in the popularity of these services. And as households let go of their addiction to binge-watching opportunities, there’s a grim feeling in the industry that they’ll fall back on the demons they know – Netflix and Amazon Prime – rather than the new ones. came Disney+ and Apple.
The recent proliferation of video streaming services has been celebrated by salivating media evangelists, who have seen it as a wonderful proliferation of choices for consumers. Unfortunately, most of these enthusiasts seem to have never read a story. In particular, they obviously have never heard of Herbert Simon, a brilliant economist who won a Nobel Prize in 1978 and who observed with foresight in 1971 that “in an information-rich world, the wealth of information means a scarcity of something else: a scarcity of all that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Therefore, a wealth of information creates attention poverty and a need to allocate that attention efficiently among the overabundance of information sources that could consume it.
Let’s do some sums. In the 24 hours of the day, we spend about eight of them sleeping, eight working, and two or three doing other things like cooking, shopping, etc. That leaves something like five hours that are available for other activities – exercise, email, social media, web browsing, video games, reading, hobbies, going to the movies, shouting at the TV news , etc. Those five hours, which also define the area where the world’s couch potatoes hang out, are what streaming service operators aim to colonize. The slowdown in streaming services may be a sign that this is a smaller market than tech entrepreneurs, venture capitalists and media companies fondly imagine.
Which on the whole would represent a benefit for humanity. Evolution didn’t design human bodies to slump on couches, and being a couch potato doesn’t do much for mental health. And less streaming could also be good for the planet. A Carbon Trust study estimated in 2020 that the carbon emissions from one hour of online video was 56g of CO2 per device. Multiply that by the 200,000 subscribers Netflix lost and you’ve got an idea of what the environmental benefit of less streaming might be. In every cloud there is a silver lining.
what i read
How democracies spy on their citizens is a fine New Yorker article on Pegasus, the harmful spyware used by governments to spy on citizens and journalists.
Made by the Donald
Kevin McCarthy Will Live to Lie Again is an excoriating Politics column by Jack Shafer about the House Minority Leader whose spine appears to have been surgically removed by Trump.
Notice how you are
Technology’s Mindfulness Racket is a great 2014 essay in the New Republic by Yevgeny Morozov.