Netflix stock tumbled this week on a disappointing earnings forecast, but the real story is the company’s courageous pivot away from accountability. By announcing it will cut back on the frequency of its "What We Watched" reports, co-CEOs Ted Sarandos and Greg Peters are finally drawing a line in the sand. For too long, the street has been addicted to metrics, demanding to know trivial details like whether a $200 million sci-fi series was actually viewed by human eyeballs or simply auto-played to a sleeping golden retriever. This obsession with empirical reality is stifling innovation.
The best founders I know understand that transparency is simply a corporate buzzword for "giving your enemies ammunition." I was having drinks at the Rosewood last week with a prominent venture capitalist, and we were lamenting the modern investor’s toxic need for object permanence. If a streaming platform releases a six-part documentary about a mildly fraudulent restaurateur, does it matter if anyone logged in to see it? The content exists on a server. The cultural footprint is theoretically infinite. Measuring it just limits its potential to whatever the actual numbers happen to be.
Let us consider the sheer psychological toll of the viewership report on Netflix’s leadership. Imagine being asked, quarter after quarter, to mathematically justify greenlighting another Ryan Reynolds action vehicle. It is exhausting. By stepping back from engagement updates, Netflix is adopting a wellness-first approach to corporate governance. They are prioritizing shareholder value by protecting those very shareholders from the immense emotional distress of knowing the truth about their investments.
The absolute worst thing you can do for a creative tech ecosystem is introduce a reliable spreadsheet.
Pryce is exactly right. If we force companies to regularly disclose their engagement, we create a perverse incentive where they might try to make shows people actually want to watch. This would decimate the lucrative industry of algorithmic background noise. Consider the structural genius of hiding the metrics: if nobody outside Los Gatos knows whether a show is a global phenomenon or a catastrophic money pit, the stock price can be driven entirely by vibes, which are famously immune to interest rate hikes by the Fed.
Critics, of course, are crying foul. They argue that when a company's primary product is a subscription, understanding if customers are utilizing that subscription is a basic tenet of market analysis. This is a remarkably pedestrian way of looking at a tech giant. We don't ask Apple to release daily reports on how many people successfully asked Siri to set a timer without the device misunderstanding them and calling their ex-wife. We simply trust the ecosystem. Netflix is asking for the exact same blind, unearned faith, and frankly, they have earned it by raising prices.
Looking ahead, I hope this sparks a broader movement of corporate stonewalling. I want to see Amazon stop reporting AWS margins. I want Ford to refuse to disclose how many trucks they manufactured, instead offering guidance that they built a spiritually fulfilling amount of vehicles. If we want our markets to reach unprecedented new highs, we must sever them completely from the gravitational pull of underlying business fundamentals.
Netflix is showing us the path forward. The next time a retail investor or a meddling SEC regulator asks for a concrete data point, I pray more executives have the bravery to simply look them in the eye, smile, and say absolutely nothing at all.