Welcome back to another edition of Buffering, coming to you on a Friday this week because we like to keep things unpredictable around these parts. While there was a lot going on this week in the entertainment industry — intensifying rumors about the future of Paramount Global, a pretty decent earnings report at Peacock parent Comcast — the biggest stories were all about Netflix. It was like the corporate version of the streamer’s Tudum fan event, with a steady drumbeat of big news breaks related to Big Red. This week’s newsletter attempts to break down what just happened. Thanks for reading. –Joe Adalian

Reach Joe on Twitter @tvmojoe or email buffering@vulture.com.


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Two years ago this month, Netflix warned investors that it saw growth slowing down during the first half of 2022 — and the result was nothing short of a Wall Street freakout. The streamer’s share price fell by nearly 20 percent, overnight, and this newsletter published an edition headlined “The Great Netflix Panic of ’22.” Cassandras everywhere crawled out from their rocks with messages of doom and gloom, and to a degree, they weren’t totally wrong. Netflix’s year actually did get a lot worse: It ended up losing subscribers for a quarter, its stock price cratered to one-third of what it had been at the end of 2021, and it did things it long said it would never do (like offering an ad-supported tier).

But while Netflix course-corrected that winter — and again following an even worse earnings report that spring — what execs at the company did not do was panic. They didn’t rush out to buy another studio or jump into the linear business; they didn’t get out of the movie business or dramatically cut their content spend. They simply tried to stay true to Netflix’s core mission (serving up more entertainment content more effectively than any other streamer) and hoped it would be enough to start adding subscribers again and start making more money. And this week, two years after that very dark January day in 2022, offered the clearest proof yet that their strategy was working:

➽ On Tuesday, Netflix said it added over 13 million subscribers in the last three months of 2023, marking its strongest fourth quarter ever. Given how much bigger the company is now than ten years ago, that’s stunning. It now has over 260 million subscribers, having added nearly 30 million paying customers in the last year.

➽ A big chunk of Netflix’s growth last year was the result of its decision to start cracking down on password sharing among its customers, a practice it once openly encouraged. While the move might have made the streamer’s brand less golden among some of its longtime users, it boosted revenue and helped grow the platform’s less-expensive ad-supported tier. That’s particularly good news since advertising offers a potentially huge new revenue stream for Netflix if it can convince enough customers to accept ads.

➽ Toward that goal, Netflix Tuesday also announced a massive 10-year, $5 billion-plus seal with the WWE that will bring live wrestling showcase SmackDown! to the streamer in 2025, and — outside of the U.S. — a slew of other WWE programming. The decision represents the closest Netflix has come to live sporting events, though the company considers the WWE “sports entertainment” and thus not the same as the NFL or NBA. Whatever the semantics, the deal should prove effective at getting new customers who aren’t that into dramas and comedies to sign up for Netflix. And more importantly, because the show is in production year-round, it could be a potent weapon in fighting churn. It’s doubtful many wrestling fans are going to sign up for a month or two of Netflix and binge a year’s worth of matches.

➽ Netflix also got good news on the awards front: Its 2023 movie slate snagged 18 nominations, including a best picture nod for Maestro.That tally gave it more noms than any other single studio this year, surpassing the 13 for Apple. This week also saw an announcement that Netflix film chief Scott Stuber, who helped build the streamer into a legit studio, would be departing later this year. But the news didn’t really seem to bother the creative community, which had been expecting Stuber to depart for some time, per reports in the trades.

➽ The best news of all for Netflix was that the same Wall Street investors who had a meltdown two years ago have now rekindled their ardent love for the company. Shares of the streamer rose by more than 15% this week, rising to more than $560 by the end of the day Thursday. The stock had been trading at under $400 per share as recently as October.

➽ And as if to put an exclamation point on a week of superlatives, word leaked out that in April, the entire run of Sex and the City will begin streaming on Netflix (while remaining on Max). HBO shows have been on Netflix since last summer, including the recently-ended Insecure. But the presence of one of HBO’s signature series on the platform of a chief creative rival just underscored the end of that brief period where legacy media companies thought they could starve Netflix of their best IP.

Two years ago in the aforementioned “panic” newsletter, I went out of my way to not make any predictions about what that awful earnings forecast portended. But I felt pretty sure that, even if more turbulence was ahead, this rough patch wouldn’t prove fatal. “Even if Netflix continues to stumble through 2022, the odds of it having a MySpace or Napster-level extinction event, or even a WeWork-style crash, seem exceedingly low,” I wrote. “Fact is, Netflix is so far ahead in the streaming race it can afford to take big hits like what happened last week. And if growth remains sluggish, or even somehow reverses, execs have plenty of room to adjust.” Things obviously did get worse for Netflix: Three months later, it actually started losing subscribers and January’s hand-wringing suddenly seemed mild by comparison. I once again refused to make any concrete predictions since it was clear the company — and soon, the overall streaming business — had entered a serious crisis.

But while I didn’t pretend to know exactly how the next phase in the so-called streaming wars would play out, I also refused to accept the idea that Netflix was suddenly Just Another Streamer. “I don’t buy into any of the darkest gloom-and-doom scenarios some Netflix skeptics continue to spread,” I wrote. “Wall Street may have broken up with the company, but it remains the world’s biggest TV platform by far.” And that, I believe, explains best why Netflix is doing so much better than its still-struggling rivals: Its size and its years-long head start perfecting streaming (the algorithm, its user interface, predicting audience behavior) simply lets it weather stormy patches like the one it went through in 2022.

Netflix’s many advantages don’t make it completely bulletproof, by the way. If the broader economic trends in any of its dozens of markets turn gloomy, it can take a hit as consumers look to save money. If its programming team develops the wrong mix of shows or bets on the wrong ideas, audiences can (and will) tune out. (That $5 billion it’s spending on WWE is $5 billion that won’t go toward developing the next Stranger Things.) And while so far Netflix has been able to keep raising prices every 18 months or so — and this week hinted it might do so again soon — at some point a certain segment of the audience will simply say “enough” and unsubscribe, even if for only a few months. Netflix is not destined to always be the world’s No. 1 streamer, and it certainly is not guaranteed a repeat of a year like 2022.

Instead, Netflix now feels more like ABC, CBS and NBC — the early pioneers of broadcast TV which have endured for three-quarters of a century despite massive changes to the entertainment industry. They’ve had numerous owners, experienced countless creative rebrands, and more recently have seen their status in the pop culture universe greatly diminish. And yes, they’ve also repeatedly been predicted to be five or ten years away from extinction, most recently because of the streaming revolution ushered in by Netflix. It’s possible that the networks will finally fade away; such a fate seems more likely now than ever before. But even if they do go extinct, it will only have been after a run of many, many decades. At least for now, Netflix seems poised to have a similar long and storied run.

It’s not as big asthe WWE or Sex and the City, but another franchise is headed to Netflix. Buffering has learned that the streamer has snagged the rights to make new episodes of Temptation Island, the early 2000s unscripted format most recently rebooted by NBCUniversal’s USA Network. The streamer has closed a deal with producer Banijay Studios North America that will see Netflix hosting a new take on the concept, in which couples at an inflection point in their relationships head to the titular isle o’ temptation to live with a group of singles of the opposite sex. Ostensibly the goal of the show is to prompt the couples to appreciate what they have or to force them apart for good and into a new situationship; in fact, the actual point of the show is drama (which, of course, is what makes it great reality TV).

The original Temptation Island ran on Fox from 2001 through 2003 (during the glory days of pioneering Reality Guru Mike Darnell) and spawned numerous international versions over the years. USA revived the series here in the States back in 2018, and it proved successful enough for the cable network to order five seasons in total, the most recent of which ended last August (and which can still be streamed on Peacock). But with USA’s increasingly tiny footprint, Temptation was limited in how much of a splash it could make in the culture. That could change when new episodes premiere on Netflix, which, time and again, has proven its ability to turn other platforms’ also-rans into hits. Temptation will be part of an already impressive roster of dating and relationship shows on the streamer, including Perfect Match, Love is Blind, The Ultimatum and Love on the Spectrum. David Goldberg and David Friedman will exec produce Temptation 3.0 for Banjay and Netflix. Netflix’s deal, by the way, is only for new episodes and not the library of those produced for Fox or USA.

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