Netflix’s Crisis of Accumulation: chart book for my SCMS2025 presentation
April 9, 2025
Originally published at notes on cinema
James McMahon
I will be presenting at the Society for Cinema and Media Studies (SCMS) conference on Friday, April 4 at 6PM. Here is the chart book for the presentation, which contains sources and notes on all of the figures:
[ PDF of SCMS2025 Chart Book ]
Here is the original abstract I wrote for the presentation:
Netflix is still a streaming giant in 2024, but investors, journalists, and economists in the past few years have openly expressed scepticism about the company’s financial future or the profitability of the streaming business in general. A high point of investor fear occurred in 2022, when Netflix announced in its first quarterly earnings report that it had lost subscribers — the first time since 2011. Netflix’s strategies to regain investor confidence after 2022 — password-sharing crackdowns and advertisements on cheaper subscription plans — have been received with mixed opinions. Overall, it appears difficult to determine just how close Netflix is to experiencing another large exodus of users.
This paper will demonstrate that Netflix has experienced a financial crisis, but this crisis began earlier, around 2018. This crisis also does not revolve around user growth, at least not in the way it is described in news and popular media. Netflix’s market capitalization and revenues are currently not as dependent on user growth as they were in the company’s first decade as a publicly-traded company, from 2003 to 2013. Netflix’s crisis stems from the need to accumulate more from a depth strategy, which involves stagflation (inflation + stagnant growth), than a breadth strategy, which involves green-field investment and mergers and acquisitions. Accumulation through depth is risky because its main mechanisms, inflation and unemployment, can create social friction and engender resistance. In Netflix’s case, social friction from rising subscription prices can translate into lost subscribers, but this risk is unavoidable when accumulation through depth is perhaps the only way for Netflix to keep profits high.
This paper seeks to contribute to research on the business of streaming media. It will present the empirical evidence to situate Netflix’s crisis of accumulation in the evolution of streaming video on demand (SVOD). The paper will also provide evidence to re-evaluate common narratives about the economics of SVOD and the streaming era of Hollywood.