Did Netflix Ruin Movies?

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? Get more from your favorite Atlantic voices when you subscribe. You’ll enjoy unlimited access to Pulitzer-winning journalism, from clear-eyed analysis and insight on breaking news to fascinating explorations of our world. Atlantic subscribers also get access to exclusive subscriber audio in Apple Podcasts. Subscribe today at theAtlantic.com/listener. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:20Speaker 01

  From Rethink, the creative marketing studio at The Atlantic and Walmart, On Solid Ground is a new podcast exploring the increasing threat of natural disasters. I'm journalist Caroline Moderesi-Turani, and I spoke with those on the front lines of disaster response to understand how communities build resilience before, during, and after a storm. Listen to On Solid Ground wherever you get your podcasts.

• 0:50Speaker 02

  When Hulu and HBO and, you know, 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 like, you're not going to let go of Netflix. Like Netflix had just already won the war.

• 1:11Charlie Warzel?

  I'm Charlie Warzel, and this is Galaxy Brain, a show where today we are going to talk about red DVD envelopes, the streaming wars, and the company that upended Hollywood. Award season's going to wrap up 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 honestly 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. And that's 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.

• 1:56Charlie Warzel?

  Now Netflix hosts live TV, award shows, sporting events. It's even a home for podcasts. And the company now has more than 325 million subscribers. Netflix's story follows the classic tech company arc. The platform didn't just disrupt how people watch movies and TV, it changed the culture and the fabric of entertainment altogether. Netflix has influenced the way that many movies look and feel and sound, even how they're conceived of and greenlit. And the company has just had its hand in creating everything, from autoplay, second screen, binge mode, algo slop, to prestige award bait projects. All of Hollywood's hopes and anxieties, the decline of theater going, data-driven writers' rooms, you name it. Netflix sits at the center of all of it.

• 2:41Charlie Warzel?

  And it's a weird moment for the company. Back in December, Netflix made an offer to buy Warner Brothers Discovery. It was a deal that was worth approximately $82.7 billion. And that 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 sent-to-billionaire founder of Oracle, Larry Ellison, fought the deal. Paramount Skydance submitted a revised offer to buy Warner at $111 billion. And Netflix backed out of the deal last week. Now, some industry observers argued that Netflix dodged a bullet, or at least they dodged a lot of debt and regulatory headaches by backing out. But now Netflix is at something of a crossroads.

• 3:25Charlie Warzel?

  And that's why I've called on my colleague David Sims. David is a staff writer here at The Atlantic, where he's our film critic, and he 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's done to transform Hollywood and all the ways that we consume entertainment. By all accounts, it feels like Netflix has won. And is that a good thing, or a bad thing, or just inevitable? David joins me now to hash it all out. But first, a quick break.

• 4:00Speaker 00

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• 4:33Speaker 01

  From Rethink, the creative marketing studio at The Atlantic and Walmart, On Solid Ground is a new podcast exploring the increasing threat of natural disasters. I'm journalist Caroline Moderesi-Turani, and I spoke with those on the front lines of disaster response to understand how communities build resilience before, during, and after a storm. Listen to On Solid Ground wherever you get your podcasts.

• 5:12Charlie Warzel?

  David Sims, welcome to Galaxy Brain.

• 5:15Speaker 02

  Hi, Charlie. Thanks for having me.

• 5:16Charlie Warzel?

  We're approaching the terminus of awards season and the Oscars. We also just had a lot of news around Netflix, Warner Brothers, Paramount, media consolidation, growth, hellscape, landscape, et cetera. 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 quickly. What is your first memory of Netflix? Your first Netflix experiment?

• 5:52Speaker 02

  I feel like it gets referenced in the OC in maybe 2005.

• 5:59Speaker 04

  Well, I'll make sure to Netflix that this weekend so that I can be up to speed on your little theory.

• 6:03Speaker 02

  That was the first time that I was kind of like, oh, this is like breaking containment. Like, you know, regular people are doing this. This is getting referenced, like people, people know about getting your discs in the mail. You gotta remember, just, I mean, and I feel like this is almost forgotten now. Like DVDs were so vital to the sort of ecosystem of Hollywood, right? Like, home video for years had been this like 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, like kind of not work out. And then you're gonna still make like 40 million extra dollars, like just from, just from DVDs. It was a glorious era for Hollywood and Netflix was just additive.

• 6:48Speaker 02

  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 like 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 have, 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 like sending off, like, you know, like that I had just finished. Like, that was sort of my Netflix cycle back in the day.

• 7:19Charlie Warzel?

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

• 7:37Speaker 02

  Netflix murdered Blockbuster in the way that like 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 like it was a sort of one to one like Netflix came in and Blockbuster ended.

• 7:55Charlie Warzel?

  Yeah.

• 7:55Speaker 02

  But, uh, 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.

• 8:03Charlie Warzel?

  I'm conflicted because in one sense, I, I refuse to listen to any Blockbuster slander in any capacity as.

• 8:11Speaker 02

  You had me on your show, so I'm gonna slander the hell out of Blockbuster. Sorry.

• 8:16Charlie Warzel?

  I know. But also at the same time, I think this is, this is a, a pattern with tech disruption and, and but also with, with Netflix throughout the history of, of the company, which is this idea of like, did Netflix accelerate certain things? What is Netflix responsible for? Which, which parts of, of the, you know, the, the changes in Hollywood is Netflix responsible for? But what I want to get to is so, so we, we have the DVD and then Netflix decides to launch this streaming service, right? And, and what I found in researching this that I, that I enjoyed is it launches a streaming service, company's stock drops 6% on that. And it seems like there was, there was like, at the moment, a little bit of like, this

• 8:59Charlie Warzel?

  is a really stupid idea. You guys have it all with this physical media.

• 9:04Speaker 02

  Yeah.

• 9:04Charlie Warzel?

  Of course.

• 9:05Speaker 02

  Right.

• 9:05Charlie Warzel?

  You know, looking at that now, that seems kind of ridiculous, but I'm curious from your perspective, if you can like walk me through a little bit about how Hollywood reacted to all of that, right? Like how the, the early days of streaming, how that kind of changed the industry or how people were thinking about that inside Hollywood?

• 9:27Speaker 02

  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 like the whole thing with Netflix, when it starts up the streaming site, I, I mean, I remember looking at it in 2007 on my like cruddy Dell laptop that I'm sure took like would start wheezing and issuing steam if I tried to stream like. A movie on it, but it was crazy because like every movie was available because every studio was like, yeah, sure, you can have our entire second run library like that's fine.

• 10:08Speaker 02

  Where do we care? Like, do what you want. Like, what, you know, how many people could even use this service? And like, there was this sort of brief, like, kind of free for all, kind of just like Wild Westy 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 put it, we sell it to cable TV. That makes us more money. That Netflix is like, that's a little bit of extra garnish for us. Like, who cares?

• 10:39Charlie Warzel?

  In that sense, you have these, these companies not, not knowing what is going on. Is Netflix in this moment just gathering this information? Because I remember when, when the streaming thing happened, my first experience with it was, I think, I think it was around Lost, right? Like, I had not watched Lost on, 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, they've all, all these fools have let us just, you know, have access to this content. And we are, we now realize, oh, like, the people will watch as much as they like physically can with their minds.

• 11:22Charlie Warzel?

  Did the data collection stuff start at the beginning, you think, with them, like they always being savvy?

• 11:26Speaker 02

  This, the whole, it's how much do you want to buy into the, this sort of Netflix myth? I remember when they like had a competition for someone to design a better algorithm than the one they had. 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, somebody did this, you know, some, 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 towards what they want. And how to then, you know, turn that into much more profit for us.

• 12:07Charlie 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?

• 12:18Speaker 02

  Two que-- those are two questions, right? Because it's like, the first one, I think it's around 2010. Warner Brothers 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. Like, we're gonna, you know, we're gonna start to make real money licensing stuff to streaming. When did they realize that Netflix is going to get into their business and essentially start cannibalizing their business? My guess is that's probably more the sort of, I mean, you could say 2013, which is when they launched House of Cards. But I feel like even that was a little, seen as a little bit of a novelty.

• 12:59Speaker 02

  And it's not for another year or two that it starts to get a little more freaky. The idea of like 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.

• 13:15Charlie Warzel?

  So this leads to, I guess, right, this is what kicks off the streaming wars, the sort of the golden age of all of that. I feel like--

• 13:25Speaker 02

  Golden, golden is a pretty loaded word to use for that, but sure, yes.

• 13:29Charlie Warzel?

  Well, golden is--

• 13:29Speaker 02

  The streaming age.

• 13:31Charlie Warzel?

  I guess, though, what I mean in terms of like greenlighting shows, right? And this like this notion of competition of, you know, we need to program these things with new, original stuff. And whether that stuff is algorithmic, you know, fodder based off of, you know, what people will watch, or if it's prestige stuff. I'm curious how you see this, this time, this like mid 2010s time? Because it feels like simultaneously, there is all this money flowing in, there's all this stuff getting greenlit. It feels like this moment where, you know, Hollywood's really grappling with people not going to the theaters in the same way. And how do you, how do you see that moment? Like, was it this period of like, this is good in some ways?

• 14:16Charlie Warzel?

  Or was it feeling like, like this is just, this is just degrading the art?

• 14:23Speaker 02

  I mean, so, When's Beams of No Nation? That's 2015, so that's the first Netflix movie. It was a serious movie that they tried to get awards and all that stuff. And I guess it all happens kind of fast. And so what's happening in Hollywood in the 2010s is Marvel has sort of distracted them all in terms of like they, 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 like, 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, you know? So Netflix sort of starts to rush in to fill the more mid-sized movie space and TV space and everything like that.

• 15:07Speaker 02

  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 like Netflix becomes like a utility. Like, everyone has Netflix, right? So when Hulu and HBO and, you know, 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 like, you're not going to let go of Netflix. Like Netflix had just already won the war. The only reason I objected to using the golden, like, to me, like, the golden age of TV is what we were just talking about, is the era that Netflix launched out of, which is

• 15:48Speaker 02

  this sort of simultaneously, the sort of HBO, the prestige cable, all that stuff, like The Sopranos, Deadwood, The Wire, all those shows. And then the, the sort of glitzy network stuff like Lost and Grey's Anatomy and whatever, what have you, that, you know, and the OC, like, that create the binge-watching thing. And so that's the golden age. And then the streaming age is what comes after. Okay. 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... You know, a little easier to watch if you're distracted.

• 16:25Charlie Warzel?

  Right.

• 16:26Speaker 02

  Often it feels like, and because 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 that becomes what we're all dealing with.

• 16:55Charlie Warzel?

  It's really interesting covering tech and watching the ways that things become so like recursive, right? Like it's basically like you get a thing that's great. And then as technology interacts interacts or works on it, what you get is like a game of telephone with that same thing that is just, you know, degraded. And I think that brings us to like the what you have been talking about, this rise of like the algorithmic friendly entertainment, right? The ambient viewing stuff, the big dumb titles. I saw a Guardian article about about Netflix who was talking about how the titles have become like so incredibly obvious on some of the more like trashy content and one is just called Tall Girl.

• 17:41Charlie Warzel?

  Cause it's about a tall girl.

• 17:43Speaker 02

  Tall Girl. Oh, 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 like where you're like, let me guess, it's about some hunting wives, wives who go hunting. And like they 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 going to work as someone is scrolling through like a hundred different offer, you know, opportunities. But then what's funny about Netflix is. It will also produce stuff that's that's really worthwhile.

• 18:22Speaker 02

  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 like the occasional sort of awardsy bump is really helpful to the to the bigger experiment.

• 18:52Charlie Warzel?

  So you have the 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, you know, still feeding into that that prestige, even if it is a little on the on the maybe slightly trashier side. And what we see now, though, is this collection of more and more and more and more information to create these, you know, ambient style shows, these second screen style shows, right? The shows that you're you're just supposed to, you know, doom scrolling and and you can watch people announce their what they're doing, you know, all the time in there. And I'm curious, has Netflix learned the wrong lessons from all of this?

• 19:37Charlie Warzel?

  Like, they they were using the data in service of something that is like relatively high quality. Now they're like, are they, is the data just like degrading the brand and all of what they're producing?

• 19:48Speaker 02

  I guess the argument against that they've 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 like, I feel like there's no really good argument for why some of their so much of their TV, especially TV, needs to be made what made in a way that almost assumes the viewer is not paying attention, right? Like, the idea. 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 a 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 sort of assumes the best of its viewer,

• 20:33Speaker 02

  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's 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.

• 20:50Charlie 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? Like, like, is there a point where, and I feel this way about like content everywhere, right? Like, are we going to reach a point where people are like, I just stop? Like I like, stop debasing me with this thing.

• 21:10Speaker 02

  Like, will people stop watching things? I don't think so. It, you know, has the world broadened, you know, to the point of like 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 going to 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, it's the easiest option.

• 21:44Charlie Warzel?

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

• 21:54Speaker 02

  Stranger Things. Is it Stranger Things? Either Stranger Things or Squid Games?

• 21:59Charlie Warzel?

  It's not. It's neither. It is Wednesday.

• 22:04Speaker 02

  That, 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.

• 22:21Charlie Warzel?

  Not only that, but, but that's season one is the, is the, you know, the most viewed. But Wednesday, season two is the fifth most. So it's like, it did have, it did have this, the staying power, but Stranger Things four comes in at three. So it's not even, it's not even the second. And Squid Game is not number two. Do you have one more guess at what number two might be?

• 22:45Speaker 02

  Uh, is it Bridgerton?

• 22:47Charlie Warzel?

  No.

• 22:48Speaker 02

  Is it, huh? Cause I'm sure there's also like reality stuff I'm not considering is.

• 22:55Charlie Warzel?

  I'll give you a hint.

• 22:56Speaker 02

  And it's not Squid Game.

• 22:57Charlie Warzel?

  It's more prestigious than you might think.

• 23:01Speaker 02

  More prestigious. Is it House of Cards?

• 23:04Charlie Warzel?

  It's Adolescence.

• 23:06Speaker 02

  Oh, Adolescence. Yeah, wow. But that, 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 like, oh yeah, well, but 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, right? Have in their history. So yeah, that makes sense.

• 23:35Charlie Warzel?

  But it all just speaks to like exactly what you said, which is the like, one of the things that Netflix has done is like divorced. It, it, it's added to like the weirdness of, of popular culture, right? Like one of my big hobby horses is nobody knows what anyone is doing because of the, the internet. Like no one knows what anyone's watching. No one knows what anyone's like, everyone knows everyone's opinions, but doesn't really know if they actually believe them or like what's happening. And this is such a good, like Wednesday is such a good example of this, like a true phenomenon.

• 24:04Speaker 02

  Undeniable phenomenon.

• 24:05Charlie Warzel?

  Nobody, but, but that like, doesn't really, it certainly penetrates popular culture, but not in the Seinfeldian, like, what's gonna happen on ER tonight kind of way. It's just, it's, it's super weird. But I, yeah, I'm, I'm glad that it, that it stumped you. I was gonna be, uh, I was gonna be mad if you.

• 24:22Speaker 02

  You did a good job stumping me. I mean, it's just like, the reheated, sort of 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, a Tim Burton directed, like, Tim Burton in his Twilight years, directed a spinoff of Addams Family that's like, 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. Like, that's why they do the, the things that they do. But will anyone, to use a Bill Simmons ism, like, will anyone be like,

• 25:06Speaker 02

  bouncing someone on their knee, tell them about Wednesday, season one, when they're a grandpa? Like, I don't think so.

• 25:12Charlie Warzel?

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

• 25:38Speaker 02

  Uh, I, I would say some. It's sort of there, a larger crisis, or a larger, sort of, like, existential question in commercial art right now, which is like, why does everything look this way, right? You know, I was recently watching Michael Bay's Transformers, for reasons I can't really explain.

• 25:56Charlie Warzel?

  You don't need, you don't need to explain yourself.

• 25:58Speaker 02

  And I, 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, like as much as it's silly, like visually. And now is the reason that all the movies kind of look like that, which by which I mean is sort of like they have, they're a little flat, they're a little kind of underlit, everything looks just a little staid. Is that because of Netflix? Is that because things need to be viewable on multiple different, you know, phone, iPad, TV, cinema screen? Is it because some people blame kind of like, oh, the way visual effects work these days, they prefer less lighting? I've heard that. I have no idea. Uh, some people say it's because

• 26:43Speaker 02

  actors now have like, uh, 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 that's, that's not going to be good for them.

• 27:10Charlie Warzel?

  So I wanna just give.

• 27:12Speaker 02

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

• 27:14Charlie Warzel?

  That, no, that was honestly, that was great. It's weird because this is again, the theme of the conversation to me, which is like, how much of this is?

• 27:23Speaker 02

  How much is their fault? Right. And how much is it just like, this is what's happening, you know?

• 27:27Charlie Warzel?

  Right. Not to just totally skip over all of it where we're, where I want to get to, but part of it is like, i- if Netflix didn't do this, if Netflix didn't come around in this way, wouldn't somebody else just have done this? Right? It just feels like the system's there, Netflix has exploited it, but it's so hard to chicken and egg. Like, right. Did the evil geniuses at Netflix do this to, to, to our beautiful boy of film?

• 27:53Speaker 02

  You cover tech, Charlie. So you can tell me, because I think the answer is Netflix is maybe an accelerant or maybe a more aggressive compet- 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, you know, 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, yes, Warner Brothers are the people who are first with a streaming platform and they, they kind of set the tone and it's a little more conservative

• 28:33Speaker 02

  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 like upstart company set a new tone and that then the, you know, the, the slower conglomerates sort of like struggle to catch up with. So maybe Netflix is responsible in that way, but it's also like someone's going to do that.

• 28:55Charlie Warzel?

  So Netflix went through this, this big messy pursuit, as we mentioned earlier, of Warner Brothers. Ultimately Paramount comes in over the top, pays a ton of money, has the sort of the Ellison Trump possible greasing the, 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 were, people were speaking out and just saying that like, this is not good, right? Like they're just scared of Netflix having this power of this consolidation. But I want to talk about that, that concern in that moment when it seemed like it was

• 29:36Charlie Warzel?

  going to be Netflix's game to win. It 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?

• 29:47Speaker 02

  What's sort of interesting about the last six months since the Warner Brothers 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, 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 Brothers, which is this like quite successful, the film branch company, but it's laden with debt. It's being built to sell by David Zaslove for the last couple of years. And I think Zaslove 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.

• 30:32Speaker 02

  And everyone starts panicking, as you're saying, because Netflix has just been philosophically hostile to the idea of the sort of classic, like, 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 Brothers, is about to vanish from theaters. That will, 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, ah, no, no, no, it's fine. I'll commit to a 45-day release window. I will honor all of these commitments. Like, Warner Brothers is gonna

• 31:15Speaker 02

  be its own thing. To the point that people started believing it. We'll never know if he was fully, like, on board or not, because it looks like, you know, 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, you know, disdainfully of the theater experience, but it was kind of this, like, question of, like, why would Netflix spend $80 billion buying a company that sells, 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 gonna buy, you know, Warner Brothers just to sort of prove some point, right? The Netflix concern was this much more kind of, like, artistic, philosophical concern,

• 31:59Speaker 02

  right? Where it's like, no one can really deny that Netflix is a well-run company. No one's really worried about where their money comes from. They can afford Warner Brothers. Whereas Paramount is like, don't worry, we got, like, 80 countries to help us. It's like, you know, we're gonna have $75 billion of debt, but it's fine. And everyone's like, okay, you know. But I just never really understood why Netflix would want Warner Brothers in terms, like, Netflix has just always been a very kind of, apart from the Quikster nightmare that they did, like, a million years ago, they've, they've always been very focused. They grow at the right scale. They know what they're doing, and they know, like, what the next step is. And this felt like a very weird next step for them to be taking.

• 32:38Charlie Warzel?

  Do you think some of it is truly just about power? Like, 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. Like, is that just because, like, that's our DNA, baby? Like, 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. I don't know. I feel like the only way that you could think about it because of that is this idea of just, like, power, right? Of the tech mindset of just, like, we have to scale. Like, 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.

• 33:23Speaker 02

  I think that's part of it. I think it's sort of this, like, never-ending need to grow. And Netflix buying Warner Brothers and HBO, that's growth, baby. Like, especially them adding the HBO stuff. Like, no doubt, like, 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.

• 33:47Charlie Warzel?

  Yeah, and not to be all, like, go all late-stage capitalism on this, but at the same time, it's like, this is what, this is the logic of, like, tech companies of this, like, of hyperscale. 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. You can't, 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. And they're staring down that thing that always befalls these successful tech companies, which is, you know, expectation of the forever growth.

• 34:28Charlie Warzel?

  So what do you think is next for Netflix now, post-Warner?

• 34:33Speaker 02

  So Ted Sarandos has sort of 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 it the funniest outcome of all this would be Netflix being like, we're going to 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 like 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 like the best way to growth, but like, I don't really know how they could possibly grow. Like they are, they are the biggest.

• 35:16Charlie Warzel?

  It's an amazing like head game too 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, make people do things they don't feel comfortable doing. Creating this streaming paradigm in this, this way that everyone has to catch up to you. And as soon as they start to catch up to you, you just say, no, we're actually going to do what you guys did. Like, 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 trolling school of business, but I kind of love it.

• 35:50Speaker 02

  I kind of love it too. I just feel like Ted Sarandos is sort of on a, 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 Zaslove. And people actually kind of aren't mad at me. And Netflix not getting to buy Warner Brothers prompted like a week of articles of people being like, you know, Netflix isn't so bad.

• 36:13Charlie Warzel?

  The other, you know, elephant in the room is the pivot to degenerative void, right? The, let's just try to churn out movies without having all these messy people being involved and.

• 36:24Speaker 02

  That's the evil version and they can do the good and the evil. They could make like, we're going to make art movies. And also, by the way, we will have like an AI channel that just like shoots slop into your ears. I don't like, they could do both, right?

• 36:35Charlie Warzel?

  The good bet is both for sure. I would, 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, you know, the ambient entertainment, the we must announce what characters are doing 25 times because no one's actually paying attention, you know, all that, all that stuff. Netflix has in one way, just for, you know, 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

• 37:16Charlie Warzel?

  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, like, where are you as a critic, as a reporter on the culture of all of this? Like, where do you kind of net out on it, right? If everyone right now is sort of like, maybe Netflix isn't so bad. Like, where are you when you think about this arc? Where do you fall?

• 37:46Speaker 02

  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, right, that came out in theaters in limited release, you know, New York and LA and San Francisco and, you know, like, Chicago, the chances of it reaching me before it hit home video were, like, 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, on Apple, on, you know, all the Amazon rental, like, all that stuff, while also giving it a run in theaters. Like, that, to me, seems like a great way to sort of preserve the medium that film critics like

• 38:31Speaker 02

  I love without, you know, annihilating it while, like, embracing convenience. What I've never understood about Netflix is why there needs to be like a monotheistic platform, right? Like, where, 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, like, 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.

• 39:03Speaker 02

  Is that so wrong? Am I so evil to be, to just be, you know, wanting everything for everyone? I don't know. I mean, like, 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. Like, 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 like how the whole thing, 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, you know, how do we know you're not going to leave us tomorrow for Peacock?

• 39:39Charlie Warzel?

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

• 39:42Speaker 02

  I'm doing my best. Thank you, Charlie, for having me.

• 39:48Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.

• 40:21Speaker 01

  From Rethink, the creative marketing studio at The Atlantic and Walmart, On Solid Ground is a new podcast exploring the increasing threat of natural disasters. I'm journalist Caroline Moderesi-Turani, and I spoke with those on the front lines of disaster response to understand how communities build resilience before, during, and after a storm. Listen to On Solid Ground wherever you get your podcasts.

• 40:53Charlie 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 want to 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.

• 41:30Charlie Warzel?

  This episode of Galaxy Brain was produced by Renee Klar and engineered by Dave Grine. Our theme is by Rob Smersiak. Claudina Bade is the executive producer of Atlantic Audio and Andrea Valdez is our managing editor.

• 41:53Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.