Last week’s Buffering went out just a few hours before Netflix reported its fourth-quarter earnings, and in the seven days since, a lot has changed in the streaming universe — at least financially. While it’s still the biggest streamer in the world, Netflix has lost billions in market capitalization after investors got spooked by the suggestion that growth for the company is about to slow to a crawl. To borrow a title from the Netflix library, it’s not The End of the F***ing World, but it ain’t great, folks. Today’s newsletter dives into what we know and, just as importantly, what we don’t. We’ve also got the latest update on Peacock’s progress, thanks to the just-announced Comcast earnings. Thanks for reading. —Joe Adalian

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

Hollywood’s old guard has been complaining for years about what they see as a double standard for Netflix. Instead of being judged on ratings, box-office grosses, and actual profits — the way networks and studios have been evaluated for decades — Wall Street (and the media) only seemed to pay attention to the streamer’s ever-increasing subscriber tally and content spend. The investors who made it a $300 billion company, at times more valuable than Disney? They were acting out of irrational exuberance.

After the events of the last seven days, nobody can accuse Wall Street of being too exuberant about Netflix anymore.

As you’ve probably heard by now, the market went into all-out panic mode last week after Netflix reported its fourth-quarter earnings. Weirdly, it wasn’t the streamer’s late 2021 performance that promoted the sudden crisis of confidence: The profits and subscriber gains were almost exactly what had been predicted. What prompted the freak-out was Netflix’s warning that growth in the first part of 2022 would be slowing down — way down, as in nearly half of the 2021 Q1 growth. Some traders also seemed to react to an almost throwaway line in Netflix’s letter to shareholders, an 11-word parenthetical that some interpreted to mean the sky had started falling: “While this added competition may be affecting our marginal growth some …”

It didn’t matter that, in the very same sentence, Netflix also noted its subscriber numbers were growing in every market where new competition had launched. Or that, just a few days earlier, traders had rallied behind Netflix stock after the streamer announced a U.S. price hike. Nope, all it took was a couple of lines in an earnings report for the seers of Wall Street to decide #NetflixIsAJoke and bail en masse. The result was a stomach-churning one-day price drop of nearly 40 percent, and by Tuesday, Netflix had lost virtually half its value. The company did get a very big vote of confidence late Wednesday, when hedge fund giant Bill Ackman of Pershing Square announced he’d spent over $1 billion to snap up more than 3 million shares of Netflix in the wake of last week’s declines, and said he still believed the company was still poised for growth. That prompted a sharp rally in Netflix stock today, pushing shares up more than 7% as of midday.

Despite this week’s modest bounce back, there’s no way of spinning recent events as anything but bad news for Netflix. Beyond losing a lot of money for shareholders (including a bunch of Netflix execs), the Great Sell-off of ’22 instantly changed the short-term narrative surrounding the streaming giant. Even with the massively successful launch of Disney+ in 2019 and the subsequent tsunami of new platforms that followed over the next 18 months or so, up until now Netflix has been able to say, quite truthfully, something along the lines of, “Hey, competition is good! Look how fast we’re still growing even with all of these new rivals. And have you seen how many billion minutes of viewing Squid Game generated last week?” But last week, Netflix had to admit that, well, actually, we don’t think we’re going to be able to keep signing up new members as quickly as we thought, and yeah, it might be just a little bit because all those big legacy entertainment companies we’ve been humiliating over the past decade finally got their act together.

In other words, even if you believe the sell-off last week was way out of proportion to how much Netflix’s position has changed in the streaming universe, the company has clearly entered unchartered territory, a new and possibly dangerous chapter for a tech-industry darling that could previously do no wrong in the eyes of its backers. This is not much Tudum about nothing.

So exactly how bad is it? As a member of the Fellowship of the Newsletters, this is where I’m expected to render some sort of expert opinion or throw out a prediction about where things are headed. But the fact is, I really don’t feel confident here forecasting what happens next. And while there are experts out there a lot smarter than I am about Wall Street stuff — you can find them posting on Twitter, talking to CNBC, or issuing their own reports and then talking about them on CNBC —  I’m not quite sure anyone knows for sure how this plays out. Streaming is still a relatively young space, and if we’ve learned nothing from the past five years of COVID-19 and creeping fascism in America, it should be that this is an incredibly volatile and unpredictable time across all sectors. I would not be surprised if Netflix comes roaring back by the end of the year and ends up growing faster than it did in 2021, but I also won’t be shocked if the rapid expansion of HBO Max, Disney+, and even some of the smaller players (like Peacock and Paramount+) end up hurting Netflix’s ability to grow outside of the U.S. more than forecast.

And yet, 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. 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:

➼ Co-CEO Ted Sarandos told me a few years ago that if and when he began seeing evidence that continually increasing content spend wasn’t yielding new subscribers, he would probably start ordering fewer new shows (or at least not keep spending more each year). There’s no law that says that Netflix must keep making a bigger number of new titles every year, particularly if they’re based in Hollywood. If Netflix is close to maxing out on the number of members it has in the States, it could begin to spend less here, perhaps opting against renewing some very expensive overall deals (Ryan Murphy’s expires soon) or shifting more money to markets where there’s more room for growth. The successes of Squid Game, Money Heist, and Lupin underscored how money invested outside America can result in global hits.

➼ Adding new members has always been the yardstick for success at Netflix, but growing in size isn’t the only way to boost revenues: There’s always the option of adjusting prices. And indeed, the streamer has done just that in the U.S. and Canada, hiking the fee for its most popular plan by $1.50, and it’s possible it could do something similar in some other mature markets where it feels it would be safe to ask members for a bit more. And in places where Netflix is less accepted, it can also cut its price, as it did last year in India. If that brings in more members and helps overall growth, it’s a smart ploy. Either way, it’s worth noting that Netflix is currently bringing in a lot more revenue per subscriber than Disney+ or Hulu, and is also making more per member than even the pricey HBO Max.

➼ It can continue to diversify. Netflix last year got into the video-game business, rolling out a handful of mobile games last November. Right now it’s still a pretty niche play for the streamer — a sort of value-added incentive to keep current customers happy — but if Netflix sees evidence members are responding well to its games, it could follow its TV-and-movie playbook and dramatically ramp up its game-release schedule. Forays into VR also seem inevitable. (Virtual Bridgerton, anyone?)

As I said earlier, I simply don’t have a good read on how much import we should attach to Wall Street’s crisis of confidence in Netflix. There’s a long history of the market acting whacky when it comes to this company. Indeed, back in 2013, just as House of Cards and Orange Is the New Black were premiering, Wall Street’s love affair with Netflix drove its stock price up more than 400 percent in a single year — stunning for a company that was making zero in profit and whose theory about the inevitability of streaming replacing linear TV had hardly been proven. Netflix founder and CEO Reed Hastings was so taken aback, he actually used a quarterly earnings interview to talk down his own company, warning about the “sense of euphoria” surrounding his company. “Every time I read a story about Netflix is the highest appreciating stock in the S&P 500, it worries me, because that was the exact headline that we used to see in 2003,” Hastings said, making reference to the months leading up to Netflix’s big 2004 stock-price collapse, when it lost two-thirds of its value over a five-month frame.

It’s hard to say whether investors now are right to be concerned about Netflix’s future or once again just relying too much on vibes. But I think the point Hastings made in 2013 stands today: Wall Street’s short-term opinion on the state of a company isn’t the only one that matters. So if you believe that investors weren’t acting all that logically over the past decade as they sank more and more money into Netflix long before it started making money — as just about every veteran-Hollywood type I know has argued — then maybe it’s okay to not totally freak out about this correction, too. At least for now.

Peacock owner Comcast was pretty quiet about the streamer’s performance during the second half of 2021. But during a fourth quarter earnings call Thursday, the company finally offered an update — and the news is … not bad, at least on some fronts. The big takeaways:

➼ Eighteen months after its national launch, Peacock boasts a bit over nine million paid monthly subscribers. Another 7 million folks get Peacock’s premium tier through cable or wireless bundles, where the service is offered at no additional cost. All told, roughly 16 million homes now have access to the full ecosystem of Peacock originals and library content.

➼ Peacock is also available as a totally free version, with more ads and a less expansive content offering. Including consumers who use that service, Comcast says the total number of monthly active users for Peacock stands at 24.5 million. That’s up nearly 25 percent from the 20 million MAUs the company reported last summer.

➼ The average Peacock user is bringing in nearly $10 per month in revenue for Comcast, thanks to a combination of subscriber fees and advertising revenue. While that’s less than what Netflix and HBO Max generate with their platforms, it’s more than double what Disney+ (which has no ads) brings in each month. It’s also well above the $6-$7 in so-called ARPU (average revenue per user) Comcast had forecast for Peacock before launch.

➼ Comcast will double its spending on content for Peacock this year, investing $3 billion in a mix of original programming and library acquisitions (including the money it’s spending to put Universal feature films on the service before they stream on other platforms). Execs expect that number will jump to $5 billion within the next couple of years. While that’s not chump change, it pales next to the $15 billion-$20 billion being allocated to HBO Max and Netflix, or the more than $30 billion Disney will spend on Disney+ and Hulu this year.

Obviously, if you compare Peacock to HBO Max, Netflix, Prime Video or Disney+, the Comcast streamer isn’t even in the same ballpark in terms of subscribers, content or revenue. But while it’s obviously competing for attention and subscribers against those all-star players, Comcast has no illusions about what it is going to be able to achieve through its streaming service alone. “We’re playing a different game than our competitors,” NBCUniversal chief Jeff Shell said on today’s earnings call. “Peacock is not a separate business for us. It’s an extension of our existing … dual revenue stream.” Rather than looking at Peacock as a replacement for NBCU’s linear networks, Shell said he sees it as a way to bring in more ad revenue and subscriber fees and, eventually, even helping “our TV business [in] returning to growth overall.”

So far, however, what Peacock has mostly done is burn through a lot of cash for Comcast. The streamer lost an eye-popping $1.7 billion last year, nearly triple the $663 million it red ink it bled in 2020. Analyst Rich Greenfield of LightShed, who’s long been down on traditional media companies’ approach to streaming, was not at all impressed by today’s numbers. “Peacock spent $894 million in operating expenses to generate $335 million of revenues,” he tweeted after the earnings call, attaching a GIF of Michael Scott wincing to underscore the cringe factor in the revenue statement.

One sign that Comcast is worried about the losses piling up at Peacock is that execs today declined to offer any hints about whether they’re planning to claw back Hulu’s access to next-day reruns of NBC network shows. As part of a deal to give up its stake in Hulu by 2024, Comcast has the right to cut off Hulu’s NBC reruns and make them available only on Peacock and the NBC app. There was much speculation late last year that Comcast was about to announce a plan to do just that, but while Shell today said that “over time, we’d like to bring that back to Peacock,” as of now, it had nothing to report. It could just be that there’s no reason to go public with a decision just yet, given that any change wouldn’t happen until the start of the 2022-’23 TV season this fall. On the other hand, Comcast may also be worried about giving up the many millions in ad and license fee revenue it gets from those Hulu reruns. Hulu also provides an excellent ecosystem — far broader than Peacock’s — to boost awareness of NBC’s new shows, which these days need all the help they can get.

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