Corporate interests have been very careful until recently to avoid mentioning the “I” word in their quarterly reports, but the times are changing. Content streaming giant Netflix only mentioned “inflation” one time in its first quarter letter to shareholders, but with the company now engaging in mass layoffs and losing subscribers to the tune of 200,000 at the beginning of the year while expecting 2 million more losses in the near term, hiding reality is becoming more difficult.
In an interview with French newspaper LeJDD, Netflix Co-CEO Ted Sarandos focused on inflation as the company's worst enemy as it reduces consumer purchasing power and suffocates comfort spending. This is a sharp departure from the usual Netflix narrative that adding restrictions on multiple users for single accounts and more competition are the main cause of subscriber losses and an admission that wider economic concerns are affecting the viability of the business.
It's important to note that Netflix has been registering terrible performance on its content for some time now, and politically motivated shows are mostly to blame. Only in the past couple of months has Netflix quietly accepted this and started cutting woke “diversity and inclusion” projects like 'Anti-Racist Baby' and 'Q-Force' (Queer Force). They just don't have the money to virtue signal with every single show as they have been doing for the past five years.
That said, the stagflation crisis is only making matters worse for the streaming service. Consumers tend to look for fantasy and escape from worldly concerns during times of economy stress and are even willing to continue paying for entertainment while in poverty for this reason. This is why Hollywood was one of the few thriving industries in the US during the Great Depression. But without solid content that appeals to the public and offers moments of relief from political and social strife, companies like Netflix have nothing to offer.
Price inflation tends to hyperfocus consumers into thinking about necessities, and Netflix has proven time and time again that it is certainly not necessary.