‘Stranger Things’ and the death of streaming

And so we come to the end. Arriving with as much ballyhoo as Netflix’s publicity department can muster, the streaming service has just—ahem—“dropped” the first episodes of what will be the final season of their 1980s-homaging sci-fi series Stranger Things.

This is a bigger deal than it seems. Stranger Things is (probably) Netflix’s most popular programme, one that’s been a vital hook to get subscribers to sign up (and keep the direct debits flowing). But the show is ending at a delicate time, as the company rethinks many of the assumptions that have brought it this far.

Let’s recap. Netflix began as a DVD-by-mail rental service, but its bosses had bigger plans than simply destroying Blockbuster Video. They started to deliver product via the internet, signing deals with studios to stream their stuff (TV shows, mostly), before—the big leap—making shows and movies of their own.

Stranger Things was one of their first major successes; it may even be their most emblematic show. Certainly, its arrival drew a huge distinction between the old ways of doing television and what this new upstart platform offered. For a start, the entire series was deposited on the servers in one go (the better to facilitate binge-watching). It also had a humungous budget, the sort that allowed for the highest production values. Ordinary telly couldn’t compete.

Suddenly, Netflix was a powerhouse. Not that anyone really understood the economics of it: they were making millions but spending billions. Wall Street seemed happy to offer them unlimited credit, confident that they would recoup the investment somehow, at some point. Inevitably, other companies decided they wanted a slice of the streaming pie: Amazon, Apple, Disney and many others all piled in, just in time for the pandemic and lockdowns that made streaming so very profitable indeed. But…

Earlier this year, producer Tony Gilroy gave a revealing but under-reported interview. He was promoting the second season of his show Andor, best-liked of the numerous Star Wars spinoffs commissioned by Disney’s streaming service, Disney+. While he faced no difficulty with the studio over budgets for the first series—somewhere in the region of half-a-billion dollars—he faced pushback and belt-tightening second time out.

During that finagling, he spoke to an unnamed executive who explained the problem to him. “Streaming is dead.” Simply put, budgets were too high and returns far too low. And if this is affecting Disney (the biggest entertainment conglomerate) and Star Wars­ (amongst the most valuable franchises), it’s certainly affecting everyone else.

When Netflix established itself, people only had to pay one subscription a month. These days, however, you’re looking at least five or six if you want to stay abreast of all the best shows, putting something of a strain on household budgets that are already tight. And that doesn’t include the more specialised services—Klassiki, say, who specialise in Eastern European movies; or the arthouse devotees at Mubi—that cater for niches that the major streamers ignore. Some platforms look precarious, including—astoundingly—Disney+; they’ve said they’re not going to publicise subscriber numbers after Q1 2026, a move which does not exactly suggest confidence.

Netflix is faring better. They’ve driven growth by cracking down on password sharing—a goodly proportion of subscribers previously shared their service with family and friends—and offering alternative models: there is now an “ad supported” tier, which means a cheaper subscription for those who don’t mind being subjected to commercials, no matter that the platform originally boasted that it offered freedom from adverts.

They’ve also become more ruthless. Once famously hands-off, Netflix now keeps producers on a shorter leash, quick to cancel shows that don’t do #numbers. Lena Dunham’s latest, Too Much, is the latest casualty—despite near wall-to-wall coverage (much of it favourable), not enough people watched it.

Data has always been a key part of their story: famously, their first original programme, the David Fincher-produced House of Cards, came about because they noticed an overlap between people who watched both the original BBC House of Cards and David Fincher films. Now they have even more data about what people actually watch and are crafting content accordingly.

Let the records show that Netflix has often been bold, and that it has facilitated some of the most discussed and acclaimed programmes in recent years—Baby Reindeer, Squid Game, Adolescence—and that these have been authentic hits, not simply prestigious loss-leaders. But let us also note that these are far from typical of their output, and that most of their content is more basic, and increasingly so: turns out people prefer documentaries about serial killers to groundbreaking original drama.

Strictly speaking, Tony Gilroy’s unnamed interlocutor was wrong. The streaming wars of recent years have winnowed the field, but streaming ain’t dead yet. There will be more casualties, but the few services that remain—and it’s fairly safe to say Netflix will be one of them—will control a far greater share of the market. Their business will become more sustainable, and they can begin paying back some of the money that funded their expansion. But consolidation means that fewer risks will be taken: why would they gamble when they know precisely what people watch?

Netflix are stringing Stranger Things out for as long as they can; there are three more episodes yet to come, before the ultimate (and supposedly “blockbusting”) finale on New Year’s Eve. You can understand why. It’s not just a TV show that’s coming to a close. This is the end of an entire era.