Did Netflix Ruin Movies?

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Few companies have reshaped American culture as aggressively as Netflix. This week’s Galaxy Brain charts how we got here.

Charlie Warzel talks with Atlantic film critic David Sims about Netflix’s strange, sweeping arc: from red DVD envelopes to a streaming colossus with 325 million subscribers. Sims explains how Hollywood initially shrugged off streaming as a novelty, only to watch Netflix reshape both distribution and the aesthetics and economics of entertainment itself.

Together, they discuss the rise of binge culture, data-driven green-lighting, and the tension between prestige projects and “second screen” slop built for distracted viewers. The conversation also examines Netflix’s stance toward theaters, its aborted bid for Warner Bros. Discovery, and the deeper question haunting the industry: Has Netflix simply exploited technological inevitabilities—or has it rewired our expectations of what movies and television are supposed to be?

The following is a transcript of the episode:

David Sims: When Hulu and HBO and all the other streamers start to crop up later in the game, it’s kind of like: You have Netflix, and then maybe you try another one. But you’re not gonna let go of Netflix. Netflix had just already won the war.

[Music]

Charlie Warzel: I’m Charlie Warzel, and this is Galaxy Brain, a show where today we’re going to talk about red DVD envelopes, the streaming wars, and the company that upended Hollywood.

Awards season will wrap up soon this month with the Oscars, which means it’s a good time to talk about Hollywood. And you can’t talk about Hollywood without talking about Netflix.

It’s difficult to imagine a company that’s had a greater impact on the entertainment industry over the last two decades. Since its founding in the late ’90s, Netflix has continued to do one thing over and over again: use technology and the internet to exploit convenience and wind its way into our lives. First it was a website that allowed you to pick your favorite DVDs to be shipped to you in the mail. Then it launched into streaming, original programming, a full movie studio. Now Netflix hosts live TV, award shows, sporting events—and is even a home for podcasts. The company has more than 325 million subscribers.

Netflix’s story follows the classic tech-company arc. The platform didn’t just disrupt how people watched movies and TV; it changed the culture and the fabric of entertainment altogether. Netflix has influenced the way that many movies look, feel, and sound— even how they’re conceived of and green-lit. The company has had its hand in creating everything: from auto-play, second-screen-binge mode-algo-slop to prestige award-bait projects. All of Hollywood’s hopes and anxieties—the decline of theatergoing, the data-driven writers’ rooms, you name it—Netflix sits at the center of all of it.

It’s a weird moment for the company. Back in December, Netflix made an offer to buy Warner Bros. Discovery in a deal worth approximately $82.7 billion. The purchase would have made Netflix arguably the world’s most powerful entertainment company. But Paramount Skydance, headed by David Ellison and backed in part by his father, the centibillionaire [co-]founder of Oracle, Larry Ellison fought the deal. Paramount Skydance submitted a revised offer to buy Warner at $111 billion. Netflix backed out of the deal last week. Some industry observers argued that Netflix dodged a bullet—or at least a lot of debt and regulatory headaches—by backing out. But now Netflix is at something of a crossroads.

And that’s why I’ve called on my colleague David Sims. David is a staff writer at The Atlantic, where he is our film critic and writes about the culture of entertainment. He’s also the host of the excellent podcast Blank Check. I wanted to talk to David about Netflix’s historical arc—how it became such a juggernaut and what it has done to transform Hollywood and all the ways that we consume entertainment. By all accounts, it feels like Netflix has won. Is that a good thing, a bad thing, or just inevitable? David joins me now to hash it out.

[Music]

Warzel: David Sims, welcome to Galaxy Brain.

David Sims: Hi, Charlie; thanks for having me.

Warzel: We’re approaching the terminus of award season and the Oscars. We also just had a lot of news around Netflix, Warner Bros., Paramount. Media consolidation. Growth hellscape/landscape, etc. So I wanted to have a conversation about Netflix, broadly—Netflix’s impact on Hollywood, on the industry, on all of us. And our eyeballs and our fragile little primate brains. So I thought it would be great to just start off very, very quickly: What is your first memory of Netflix? Your first Netflix experiment?

Sims: I feel like it gets referenced in The O.C. in maybe 2005.

[Clip plays from The O.C.]

Sims: That was the first time that I was kind of like: This is breaking containment. Like, you know, regular people are doing this; this is getting referenced. Like, people know about getting your discs in the mail. You gotta remember just—and I feel like this is almost forgotten now—DVDs were so vital to the sort of ecosystem of Hollywood, right? Like home video, for years, had been this sort of profit, you know, add-on. And that was fine.

And then DVDs come out, and it basically meant that you could make the worst movie of all time—kind of bomb in the box office, kind of not work out—and then you’re going to still make like 40 million extra dollars. Like, just from DVDs. it was a glorious era for Hollywood. And Netflix was just additive. Like, yes; all they were doing was buying discs and then sending them out to people in the mail. But it was just all part of, like, this wonderful cycle of extending a movie’s life and getting it out to more people. And yeah; as a college student, it was perfect for me. I got the three-disc plan. I don’t know if you did. Some people only did one. I would always have three. So I would have one disc that was a TV show, and then like one disc that was my next movie to watch, and one disc that I was sending off, like, you know, that I had just finished. That was sort of my Netflix cycle back in the day.

Warzel: I’m curious; do you feel like—and this is going to be a bit of a theme of the conversation, I think—did Netflix’s DVD business kill video stores? Or did it accelerate something that was already happening? They were already kind of on their way out. Like, how do you see that influence?

Sims: Netflix murdered Blockbuster in the way that Amazon killed Borders or whatever. Where it’s sort of like: Blockbuster had hastened its own demise; like, Blockbuster was ready to be killed. And It’s a bit of an urban legend. I think that, you know, it was a sort of one-to-one; like, Netflix came in and Blockbuster ended. But you know, it was just kind of like: “The internet is here; people want to pick their movies on a computer.” Netflix let them do that.

Warzel: I’m conflicted, because in one sense, I refuse to listen to any Blockbuster slander in any capacity. But, I’m just kidding.

Sims: Well, you had me on your show, so I’m going to slander the hell out of Blockbuster. Sorry. Yes, go ahead.

Warzel: But also, at the same time, I think this is a pattern with tech disruption and also with Netflix throughout the history of the company. Which is this idea of, like: Did Netflix accelerate certain things? What is Netflix responsible for? Which parts of the changes in Hollywood is Netflix responsible for? But what I want to get to is—so we have the DVD. And then Netflix decides to launch this streaming service. Right. And what I found in researching this, that I enjoyed, is: It launches a streaming service. Company’s stock drops six percent on that. And it seems like there was, at the moment, a little bit of like: This is a really stupid idea. You guys have it all with this physical media.

Of course, looking at that now, that seems kind of ridiculous. I’m curious, from your perspective, if you can walk me through a little bit about how Hollywood reacted to all of that. Right? Like, how the early days of streaming, how that kind of changed the industry. Or how people were thinking about that inside Hollywood.

Sims: I think they weren’t thinking about it much at all. Like, every time streaming stuff happens—in the sort of narrative of TV, Hollywood, movies, whatever—it catches them completely off guard, and they have no concept of it as anything but a novelty. So the whole thing with Netflix: When it starts up the streaming site, I mean, I remember looking at it in 2007 on my cruddy Dell laptop, that I’m sure would start wheezing and issuing steam if I tried to stream a movie on it. But it was crazy, because every movie was available. Because every studio was like, “Yeah, sure, you can have our entire second-run library. That’s fine. What do we care? Do what you want. Like, you know, how many people can even use this service?” And there was this sort of brief, kind of free-for-all, just like Wild West-y feeling to the streaming stuff. Because Hollywood was like, “This is how we make our money. The movie comes out in theaters. That makes us money. We put it on home video. That makes us more money. And then we we sell it to cable TV. That makes us more money.” Netflix is like, “That’s a little bit of extra garnish for us.” Like, who cares?

Warzel: In that sense, you have these companies not knowing what is going on. Is Netflix in this moment just gathering this information? Because I remember when the streaming thing happened, my first experience with it was … I think it was around Lost, right? Like, I had not watched Lost on actual cable at the time. So I was, whatever, three-and-a-half seasons behind. And I experienced the binge phenomenon myself. Was Netflix, at that time, just learning like, “Okay, all these fools have let us just have access to this content”? And we now realize, like, the people will watch as much as they physically can with their minds. This is like—did the data-collection stuff start at the beginning, you think? With them always being savvy?

Sims: It’s—how much do you want to buy into the sort of Netflix myth? I remember when they had a competition for someone to design a better algorithm than the one they had, right? Like, and this is pre-streaming. This is back when it was disc rentals. But they were like, “Hey, if you can beat our recommendations engine, we’ll give you like a million dollars.” And I think somebody did this. You know, like some coder that suggests that. Certainly, of course, as their business is taking off, they start to realize like, Right, the most important thing for us is to figure out what people want, and how to steer them toward what they want. And how to then, you know, turn that into much more profit for us.

Warzel: So when did, in your mind, Hollywood … when did they catch up to this? What was the moment when they realized This is bad news to have just be giving all this stuff out?

Sims: Two questions. Those are two questions, right? Because the first one, I think it’s around 2010. Warner Bros. like signed a huge deal with them to stream stuff. So that I think is when Hollywood is like, “This is a big deal. And it’s great news for us. We get money; real money. You know, we’re gonna start to make real money licensing stuff to streaming.” When do they realize that Netflix is going to get into their business and essentially, you know, start cannibalizing their business? My guess is that’s probably more sort of—I mean, you could say 2013, which is when [Netflix launched] House of Cards. But I feel like even that was a little scene, a little bit of a novelty.

And it’s not for another year or two that it starts to get a little more freaky, [with] the idea of a Netflix movie being treated like a real movie, even though it didn’t play in a theater. Which is the sort of core existential nightmare that many people in Hollywood still struggle with.

Warzel: So this leads to—right, this is what kicks off the streaming wars. The sort of the golden age of all of that. And I feel like …

Sims: Golden is a pretty loaded word to use for that. But sure; yes. The streaming age.

Warzel: Well, “golden age” in terms of, I guess, like green-lighting shows, right? And like, this notion of competition. Of, you know, “We need to program these things with new original stuff.” And whether that stuff is algorithmic fodder based off of, you know, what people will watch, or if it’s prestige stuff—I’m curious how you see this time. This mid-2010s time. Because it feels like, simultaneously, there is all this money flowing in; there’s all this stuff getting green-lit. It feels like this moment where, you know, Hollywood’s really grappling with people not going to the theaters in the same way. How do you see that moment? Was it this period of, like, “This is good in some ways”? Or was it feeling like, “This is just degrading the art”?

Sims: So, when’s Beasts of No Nation? That’s 2015. So that’s the first Netflix movie that, you know—it was a serious movie that they tried to get awards, and all that stuff. And I guess it all happens kind of fast. So what’s happening in Hollywood in the 2010s is: Marvel has sort of distracted them all. In terms of, like—every studio starts to panic that what they need is a gigantic sort of never-ending franchise that they can pump out three editions of a year. And that can be the sort of temples that they build everything else around. And I feel like their eye gets taken off of the streaming. So Netflix sort of starts to rush in to fill the more midsize movie space and TV space and everything like that. And obviously, the thing that they couldn’t really have predicted—or it would have been hard for them to spool up as quickly as Netflix does—is: Netflix becomes like a utility. Like, everyone has Netflix, right? So when Hulu and HBO and all the other streamers start to crop up later in the game, it’s kind of like: You have Netflix, and then maybe you try another one. But you’re not gonna let go of Netflix. Netflix had just already won the war.

The only reason I objected to using the golden—like, to me, the golden age of TV is what we were just talking about. The era that Netflix launched out of. Which is simultaneously the sort of HBO, the prestige cable, all that stuff—like The Sopranos, Deadwood, The Wire, all those shows—and then the sort of glitzy network stuff like Lost and Grey’s Anatomy and what have you, and The O.C., that create the binge-watching thing. And so that’s the golden age. And then the streaming age is what comes after. Which is where Netflix takes the reins, and they start making the content. And now it’s not actually the TV we liked. It’s TV that’s sort of designed to be binged. It’s designed to be a little easier to watch if you’re distracted.

Warzel: Right.

Sims: And the answer of why it feels like this is: because this is what it is. Movie scripts have been stretched to 10 episodes. Because people start pitching movies, and everyone’s like, “Movies; eh. If your movie doesn’t have a superhero, we don’t care about it. Could it be a TV show?” And so you start to see lots of things get turned into streaming TV that maybe, you know, didn’t have enough plot to fill 10 episodes. But if it’s on Netflix, people will watch it. So that becomes what we’re all dealing with.

Warzel: It’s really interesting covering tech and watching the ways that things become so recursive, right? Like, it’s basically: You get a thing that’s great. And then as technology interacts with it, or works on it, what you get is like a game of telephone—with that same thing that is just, you know, degraded.

Sims: Right.

Warzel: And I think that brings us to what you have been talking about: this rise of the algorithmic-friendly entertainment. The ambient-viewing stuff, the big dumb titles. Like, I saw a Guardian article about Netflix that was talking about how the titles have become so incredibly obvious on some of the more trashy content. And one is just called Tall Girl, because it’s about a tall girl.

Sims: Hey man, Netflix’s tall girl. She’s tall! I mean, Hunting Wives. Hunting Wives was a huge hit for them last season. And that was a show that multiple people were like, “You should check out Hunting Wives.” Which I haven’t gotten to yet. But where you’re like, “Let me guess: It’s about some hunting wives. Wives who go hunting.” And like, you know, they’re so focused on “Can it be sold?” You know, in the carousel, right? Like, “Can you basically design me a sort of punchy image and a quick title that’s gonna work as someone is scrolling through a hundred different opportunities?”

But then, what’s funny about Netflix is it will also produce stuff that’s really worthwhile. And you can tell when a lot of the sort of controls were waived, right? Where there was probably less studio notes of, like: “And make sure it works on a phone. And make sure people explain the plot five times during the episode.” You know, where an auteur who Netflix takes seriously is being given, you know, a lot of room to make a passion project. Or something like that. Because Netflix knows the occasional sort of awards-y bump is really helpful to the bigger experiment.

Warzel: So you have Netflix collecting all this data about what people are watching, what they’re doing. It leads to the creation of some of these shows like House of Cards, which end up being eminently watchable. Still feeding into that prestige, even if it is a little on maybe the slightly trashier side.

And what we see now, though, is this collection of more information to create these ambient-style shows. These second-screen-style shows, right? The shows that you’re just supposed to do doomscrolling, and you can watch people announce what they’re doing all the time in there. And I’m curious; is this like … has Netflix learned the wrong lessons from all of this? Like, they were using the data in service of something that is relatively high quality. [Is] the data just, like, degrading the brand and all of what they’re producing?

Sims: I guess the argument against “they learned the wrong lessons” is that Netflix is successful and profitable, and lots of people subscribe to it. And so, if you just follow the money, they’re right and we’re wrong. Right? But I feel like there’s no really good argument for why so much of their TV—especially TV—needs to be made in a way that almost assumes the viewer is not paying attention. Right? Like when I call it a second-screen show or whatever, if like someone’s basically scrolling Instagram while they have the Netflix show on in the background. So the Netflix show needs to be sort of obnoxiously, loudly plotted as possible—so people can kind of track what’s going on. It’s assuming the worst to your viewer. And so much of good TV assumes the best of its viewer, right? Like, assumes that viewers can pay attention and figure things out, and maybe talk to each other if they didn’t figure something out. And it sort of points to, I feel, like a lot of dissatisfaction a lot of people have with how TV is these days of like. Why is it like this? It’s like: Well, they’re kind of assuming the worst of you.

Warzel: This is maybe an unanswerable follow-up to that. But do you think people will just lap up all the slop for as long as possible? Is there a point where—and I feel this way about content everywhere, right? Like, are we going to reach a point where people are like, Just stop. Like, stop debasing me with this thing?

Sims: Oh my God. As, like, will people stop watching things? I don’t think so. You know—has the world broadened to the point of “a thousand points of light” versus, like, three networks of TV? You know, back in the ’50s and ’60s. Yes. So I suppose the answer is like, well: They’re always gonna have the choice to watch something else. But that’s why the game Netflix has played of “We need to have the biggest user base” has worked out for them. In terms of like—yeah, well, sure, maybe people want to watch something else. But more likely, they’re going to use the thing they pay for, because it’s the easiest option.

Warzel: I wanna see how many of the 10 most popular shows globally, of all time, in Netflix that you could guess before just totally giving up. What do you think is the most popular Netflix show?

Sims: Stranger Things. Is it Stranger Things? Either Stranger tThings or Squid Games, Squid Game. Whatever.

Warzel: It’s not. It’s neither.

Sims: Okay, what is it?

Warzel: It is Wednesday.

Sims: That would have been my third guess. Which is one of those things that you’re like, “Does anyone ever talk about Wednesday?” I know it was unambiguously a hit. It was unambiguously seen. But it’s not like you walk the streets hearing people go, “I can’t wait for more Wednesday.”

Warzel: Not only that, but that Season 1 is the most viewed. But Wednesday, Season 2, is the fifth most. So it’s like, it did have the staying power.

Sims: Right; more recent.

Warzel: But Stranger Things [Season] 4 comes in at No. 3. So it’s not even the second. And Squid Game is not No. 2. Do you have one more guess at what No. 2 might be?

Sims: Uhhh, is it Bridgerton?

Warzel: No.

Sims: Is it, huh. Because I’m sure there’s also, like, reality stuff I’m not considering. And it’s not Squid Game.

Warzel: I’ll give you a hint; it’s more prestigious than you might think.

Sims: More prestigious. Is it House of Cards?

Warzel: It’s Adolescence.

Sims: Adolescence. Yeah; wow. So that all speaks to something that is almost illogical. But I guess it’s just: Their audience has gotten so much bigger. That like, you’d think, Yeah, well, surely something like a legacy show for them, like House of Cards or Orange Is the New Black or whatever, built up the bigger audience. But no. Like when Adolescence was such a smash last year, it was playing to the most subscribers Netflix had in their history. So yeah; that makes sense.

Warzel: But it all just speaks to exactly what you said. Which is like, one of the things that Netflix has done is, like, divorced. It’s added to the weirdness of popular culture. One of my big hobby horses is “Nobody knows what anyone is doing, because of the internet.” No one knows what anyone’s watching. Everyone knows everyone’s opinions, but doesn’t really know if they actually believe them, or what’s happening. Like, Wednesday is such a good example of this. A true phenomenon. But that doesn’t really—it certainly penetrates popular culture, but not in the Seinfeld-ian, “What’s gonna happen on ER tonight?” kind of way. It’s just; it’s super weird. But yeah. I’m glad that it stumped you. I was gonna be mad at you.

Sims: You did a good job stumping me. It’s just like the reheated-nachos element of Wednesday is just: It is a great way to think about what Netflix brings to the table. And Netflix has made good television, and it’s made good movies. I’m not saying it hasn’t. But like, Tim Burton in his kind of twilight years directed a spin-off of Addams Family, that’s kind of a high-school drama with a murder mystery. It just sounds like something a Netflix algorithm came up with. And no wonder it was a smash hit for them. Like, that’s why they have these programs. That’s why they do the things that they do. But will anyone, to use a Bill Simmons–ism, like: Will anyone be like bouncing someone on their knee, telling them about Wednesday, Season 1, when they’re a grandpa? I don’t think so.

Warzel: So I’m curious with this. Like, the algorithm-friendly, big, dumb, potentially trashy entertainment stuff. You mentioned to some degree how it looks, too, right? Like this feeling that everything from, like, the palette to … it all feels very scroll–phone based. Or it doesn’t really matter, because it’s second-screen stuff. How much of this has seeped into modern filmmaking? Like, like broadly speaking, the Netflixification of it.

Sims: Yeah; I would say some. It’s sort of a larger crisis, or a larger sort of existential question in commercial art right now. Which is like: “Why does everything look this way?” Right? I was recently watching Michael Bay’s Transformers for reasons I can’t really explain.

Warzel: You don’t need to explain yourself.

Sims: And, you know, it’s a movie that has some coherence issues. And it’s a movie about robots that turn into cars, and all that. But I was just like: God, this looks so good. It’s so well lit. It’s so thoughtfully made, as much as it’s silly, visually. And now, is the reason that all the movies kind of look like “that”—by which I mean, sort of like they’re a little flat, they’re a little under lit, everything looks just a little staid—is that because of Netflix? Because things need to be viewable on multiple different, you know, phone, iPad, TV, cinema screens? Is it because some people blame the way visual effects work these days? They prefer, you know, less lighting? I’ve heard that. I have no idea. Some people say it’s because actors now have … like, they arrive at set with their own lighting portfolio, and you have to light them a certain way. So you’re not allowed to make artistic choices anymore. I’ve heard that as well. I don’t know. But I do think Netflix is kind of part of it, in terms of like—what’s the most crucial to them is that it can be viewed in many different formats. And so, if your movie is gonna go for an artier thing, that might not translate on a smaller screen. And that's not gonna be good for them.

Warzel: So I wanna, just given what we’ve talked…

Sims: I know that was a lot to throw at you there.

Warzel: No, honestly; it was great. It’s weird, because this is again, the theme of the conversation to me—which is like, how much of this is a thing?

Sims: How much is their fault, right? And how much is it just like: This is what’s happening; what can you do?

Warzel: Yeah; how much. Right. Yeah; not to just totally skip over all of it where I wanna get to. But part of it is like—if Netflix didn’t do this, if Netflix didn’t come around in this way, wouldn’t somebody else just have done this? It just feels like the system’s there. Netflix has exploited it, but it’s so hard to chicken-and-egg. Like, did the evil geniuses at Netflix do this to our beautiful boy of film, you know?

Sims: You cover tech, Charlie. So you can tell me. Because I think the answer is: Netflix is maybe an accelerant, or maybe more aggressive, you know. It’s like, I feel like this happens in tech a lot, but you would know better than me. That like—there’s the established companies that kind of rule something, like computing or telecommunications or whatever. And then a newer thing will come in that’s initially disruptive and then becomes a colossus on its own. And that’s what happened with Netflix. Where it’s like: You could imagine a world where Warner Bros. are the people who are first with a streaming platform, and they kind of set the tone. And it’s a little more conservative, because it’s an old legacy company that doesn’t want to rock the boat too much. But I do feel like often you need to have this kind of upstart company set a new tone, and then the, you know, slower conglomerates sort of struggle to catch up. So maybe Netflix is responsible in that way. But it’s also like: Someone’s gonna do that, right?

Warzel: So Netflix went through this big messy pursuit, as we mentioned earlier, of Warner Bros. Ultimately, Paramount comes in over the top, pays a ton of money, has the sort of the Ellison/Trump, you know, possible “greasing the wheels on getting this through” connection.

And Netflix gets a nice $2.8 billion termination fee for going through the whole thing. You wrote back in December that Netflix’s potential acquisition of Warner could spell doom for cinemas down the line. Outside of even that, it felt like creatives and people in Hollywood, people were speaking out and just saying, “That is not good.” Right? Like, they’re just scared of Netflix having this power, of this consolidation.

Sims: Yes.

Warzel: But I want to talk about that concern in that moment when it seemed like it was going to be Netflix’s game to win. Really, kind of “Netflix as the apocalyptic force” stuck with me. And so I’m curious. From that, what is the reputation of Netflix right now in Hollywood?

Sims: What’s sort of interesting about the last six months, since the Warner Bros. bidding war broke out, is that I feel like there’s been a slight softening on Netflix. Partly because Netflix really, really ran like a big political campaign within Hollywood to try and convince people: “We’re not the monsters you think we are.” And so what happens is obviously—Warner Bros., which is quite successful, the film-branch company, but it’s laden with debt. It’s being built to sell by David Zaslav for the last couple of years. And I think Zaslav expected Paramount, Universal, the other big studios to try and grab it. Essentially to be like, “We just need to get bigger. We need to get bigger to fight Disney, to fight Netflix.”

Then Netflix comes in, and, you know, it initially wins the bidding war. And everyone starts panicking, as you’re saying. Because Netflix has just been, philosophically, really like hostile to the idea of the sort of classic “Release it in theaters, let people enjoy it, and a few months later it can hit the internet” sort of strategy, that’s existed for a long time. And everyone immediately is just like, “Okay, that’s it. The biggest movie studio in America that’s not Disney, Warner Bros., is about to vanish from theaters. That will kill theaters.” Like, “That’s it.” Like, you cannot survive without their, like, 15 to 20 big movies a year.

And then you saw people panic so much that Sarandos actually started being like, “No, no, no, no; it’s fine. I’ll commit to a 45-day release window. I will honor all of these commitments. Warner Bros. is going to be its own thing.” To the point that people started believing it. We’ll never know if he was fully on board or not, because it looks like Paramount’s gonna get the company. But it was sort of interesting to watch, because I almost started to believe Ted. He’s spoken so disdainfully of the theater experience. But it was kind of this question of: Why would Netflix spend $80 billion buying a company that releases movies in theaters?

It’s like buying McDonald’s and not selling chicken nuggets or whatever. It’s just sort of like—it’s how this company makes money. Surely you’re not going to buy, you know, Warner Bros. just to sort of prove some point, right? I just never really understood why Netflix would want Warner Bros., in terms like—Netflix has just always been very kind of apart from the Qwikster nightmare that they did like a million years ago. They’ve always been very focused. They grow at the right scale. They know what they’re doing, and they know what the next step is. And this felt like a very weird next step for them to be taking.

Warzel: Do you think some of it is truly just about power? At a certain point, you just have to show that you’ve won. I’m fascinated, too, by this idea of being so hostile to the theater experience. Is that just because: That’s our DNA, baby. As soon as we started doing the DVDs and allowing you to bring them home, which is obviously how the company started, we have always just been protective of the home experience. And that’s just who we are. And we won’t stray from that?

Sims: Right.

Warzel: I don’t know. I feel like the only way that you could think about it, because of that, is this idea of just power, right? Of the tech mindset. Of just like: We have to scale. Scale is just—if you don’t scale, you die. And we have to find weird ways to scale now, because we are so big.

Sims: I think that’s part of it. I think it’s this, like never-ending need to grow. And Netflix buying, you know, Warner Bros. and HBO. That’s growth, baby. Like, especially them adding the HBO stuff. Like, no doubt, that’s something maybe that would indicate an even bigger future for them. And also, yes; you’re fighting off consolidation from other studios, which I guess would be designed to rival you.

Warzel: Yeah. And not to go all late-stage capitalism on this, but at the same time, it’s like: This is the logic of tech companies. This, like, hyper scale. But, you know, they have a subscriber ceiling—in the sense that you just can’t get everyone to come do this, right? Like, you do grow to this point. I mean, maybe you can raise the price forever, but at some point people will probably look around and say, “Okay; I am paying $60 a month for this thing. I don’t know that I really want it. Whatever.” Right? And they’re staring down the thing that always befalls these successful tech companies—expectation of the forever growth. So what do you think is next for Netflix now, post-Warner?

Sims: So Ted Sarandos has said in these postmortem interviews, like, “I think we can do more stuff with theaters.” Like, he’s really trying to push the change of tune. And the funniest outcome of all this would be Netflix being like, “We’re gonna operate a little bit more like an old-school prestige movie studio. We’ll still be a TV company, a streaming-TV company, and that’ll be our big profit engine. But we want to actually rebrand to something a little classier, because we see how much you guys freaked out last year.”

That could happen. It doesn’t strike me as the best way to growth, but like you said, I don’t really know how they could possibly grow. Like, they are the biggest.

Warzel: It’s an amazing head game to to play, right? If you’re always one step ahead and pushing people in a direction that makes them feel uncomfortable. Like, if that’s the Netflix legacy with Hollywood: make people do things they don’t feel comfortable doing. Creating this streaming paradigm in this way that everyone has to catch up to you—and as soon as they start to catch up to you, just say, “No, we’re actually going to do what you guys did. Thanks for spending all that money on completely changing your business around. We’re going to go back to that, you know, a year ahead of you.”

That would be kind of like the, I don’t know, the trolling school of business. But I kind of love it.

Sims: Yeah; I kind of love it too. I just feel like, you know, Ted Sarandos is on as much of a high as he’s ever been right now. In terms of like, Everyone’s mad at David Ellison right now, and everyone’s mad at David Zaslav, and people actually kind of aren’t mad at me. And Netflix not getting to buy Warner Bros., you know, prompted a week of articles of people being like, “You know, Netflix isn’t so bad.”

Warzel: The other elephant in the room is the pivot to the generative void. The “Let’s just try to churn out movies without having all these messy people being involved.”

Sims: That’s the evil version. And they can do the good and the evil. They could be like, “We’re going to make art movies. And also, by the way, we will have an AI channel that just shoots slop into your ears.” Like … they could do both, right?

Warzel: The good bet is both, for sure, I would imagine. Okay, so to kind of land the plane here, I want to just like get your assessment on this whole arc, right? Because I think it’s really easy to start adding all of this stuff up. The ambient entertainment, the “we must announce what characters are doing 25 times because no one’s actually paying attention.” You know, all that stuff.

Sims: Right.

Warzel: Netflix has, in one way, for two decades, exploited convenience. And that is not necessarily a bad thing, right? Like, I don’t think we have to clutch our pearls about that. Convenience is good sometimes. But there’s also been this complete and total impact on the industry at large. But also with us as consumers—what we expect out of entertainment now, how we want to watch it. Our viewing, our consumption habits have changed alongside the production habits of it. And so I’m just curious. You, as a critic—as a reporter on the culture of all of this—where do you kind of net out on it, right? If everyone right now is sort of like, “Maybe Netflix isn’t so bad,” where are you when you think about this arc? Where do you fall?

Sims: I am sorry to come off as an entertainment centrist, but that is basically what I am. I love that. Look, when I was a teenager, if there was an art movie that came out in theaters in limited release—you know, New York and L.A. and San Francisco and like Chicago—the chances of it reaching me before it hit home video were, if I didn’t live in some big city, were tiny. And I love that you can get a movie like that in front of people within a few months on the internet—Apple, all the Amazon rentals, like all that stuff—while also giving it a run in theaters. That, to me, seems like a great way to sort of preserve the medium that film critics like I love. Without annihilating it while embracing convenience.

What I’ve never understood about Netflix is why there needs to be sort of a monotheistic platform. Right? Where it’s like: You simply must ingest it the way we want you to ingest it. You have to binge the TV; you have to watch the movie at home. All that. Like, just make all things available to all people in all ways. Like, it’s a great way to get art into people’s eyes. Like, they can pick how they want to experience it. Is that so wrong? Am I so evil to just be, you know, wanting everything for everyone?

I don’t know. I think some of these companies are like, “No; it’s a competition, and we need to win it.” I’ve never really understood that. To me, it’s just like: Everyone should just try to make the best stuff they can and get it to people every way that they can. In exchange, they can get money. Which, you know, is kind of how the whole business thing is supposed to work.

It’s insecurity, I guess, is the best way to put it. Like, even though Netflix won, they’re still basically like: “Yeah, but how do we know you’re not gonna leave us tomorrow for Peacock? So we have to keep you on the line.”

Warzel: Great, great Peacock plug at the end there, David.

Sims: Yeah. Everyone sign up.

Warzel: David, thank you so much for trying to make sense of this.

Sims: I’m doing my best. Thank you, Charlie, for having me on.

[Music]

Warzel:  That’s it for us here. Thank you again to my guest, David Sims. If you liked what you saw here, new episodes of Galaxy Brain drop every Friday. You can subscribe to The Atlantic’s YouTube channel or on Apple or Spotify or wherever it is that you get your podcasts. And if you wanna support this work and David’s work and the work of all my colleagues at The Atlantic, you can subscribe to the publication at TheAtlantic.com/Listener. That’s TheAtlantic.com/Listener. Thanks so much, and I’ll see you on the internet.

This episode of Galaxy Brain was produced by Renee Klahr and engineered by Dave Grein. Our theme is by Rob Smierciak. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.