Netflix goes to Hollywood

Why Netflix’s stock market woes mean it must move its model from Silicon Valley to Hollywood.

Paul Vacca
3 min readApr 30, 2022


The fall, even a drastic one, of its share price does not mean the end of Netflix. But it might herald the end of an era: that of its golden age. Indeed, as many observers have pointed out, the loss of 200,000 subscribers is not necessarily worrying in itself, especially since 700,000 were lost due to the closure of the Russian subsidiary. A little more worrying could be the forecast loss of 2 million subscribers in the next quater, if it comes true. However, this would still be a small loss compared to its portfolio of 221 million subscribers worldwide.

What seems to signal the end of an era is Netflix’s reaction to this — slight — erosion of its subscriptions. Where one might have expected the platform to downplay its impact and get current and future subscribers salivating with the promotion of new upcoming programmes — in true “show must go on” fashion — the company has only sent signals to the markets. Instead of feeding the dream machine to viewers, it has provided an accounting response for investors: a probable opening to advertising (which the platform refused to even consider until now), a hunt for account sharing (while it has blithely turned a blind eye to this practice which suits them) and rationalisation of production budgets…

These measures suggest that the streaming giant’s problems are much more structural than simply cyclical. It is true that the content war in which it is engaged has changed in nature since the thunderous irruption of the other streaming players — Disney+, HBO Max and others. But these measures above all mark the end of a model.

“Forget it Reed. It’s Hollywood”

In this content war, the Los Gatos firm had clearly been playing a score made in Silicon Valley. A disruptive model that relied on valuation to finance its content race. The model was the well-known one of uberisation: a system that aims for self-sufficiency with the sole rule of not having rules (to use the title of Reed Hastings’ book) in order to destabilise the market.
But since the beginning of the year, the meltdown in its valuation sounds like a call for realpolitik. Netflix realises that the content war it initiated would not be a blitzkrieg.

“If you can’t beat them, join them”. Faced with this new situation, Netflix is forced to change its code of conduct. Not by pivoting, but by moving its model some 300 miles further south: from Silicon Valley to Hollywood. Netflix’s new strategy of streamlining its production, making choices instead of investing all over the place, building a catalogue over time, and building loyalty instead of uberization is ultimately the art of war that Hollywood has been practicing since 1910.

A war that is just as fierce, but which requires other weapons: less autarkic, less frontal, with variable geometry depending on the project, where one can be both competitor and partner. In short, the new challenge for the platform is as much economic as cultural.

A t the end of Roman Polanski’s Chinatown, a masterpiece of the New Hollywood, Jake Gittes, the maverick detective played by Jack Nicholson, is called to realism by his partner: “Forget it Jake. It’s Chinatown”. A sentence that could resonate with Netflix maverick Reed Hastings: “Forget it Reed. It’s Hollywood”.¶

This column was originally published in French in Trends-Tendances magazine



Paul Vacca

Auteur. Chroniqueur pour Les Échos Week-end. Intervenant à l'Institut Français de la Mode (IFM Paris), à l’ISG Luxury Geneva (Suisse).