I was picking at a $48 endive salad at San Vicente Bungalows with a source close to the rollout of Netflix’s new ad tier when the notifications started lighting up our phones. The streamer had ousted its top content executive and slashed a huge swath of its workforce. Naturally, Film Twitter began its usual weeping. People pointed to the $46.6 billion in revenue. They pointed to the $11 billion in net profit the company notched in 2025. They asked, with the naive indignity of those who have never had to manage a global media portfolio, why a company making record-breaking billions would need to throw thousands of people out into a contracting job market.
Make no mistake, this is exactly the kind of provincial thinking that is destroying Hollywood.
To the average subscriber, $11 billion in pure profit sounds like a victory. But in the streaming wars, $11 billion is practically a distress signal. Wall Street expects Netflix’s revenue growth to cool off to a mere 13 to 14 percent this year. Do you know what it feels like to only grow by 14 percent? It feels like standing still while your neighbors at Apple and Amazon buy entire sovereign nations. If Netflix wants to boost its operating margin by 200 basis points to reach a target of 31.5 percent—and as someone who appreciates the art of quarterly earnings, I desperately want them to—then the dead weight simply had to go.
We need to stop romanticizing the working class when they are actively standing in the way of shareholder value. The ousted content executive, for instance, was likely bogged down in antiquated concepts like greenlighting shows people actually want to watch. That kind of sentimental programming is a luxury you can afford at a 20 percent margin, but at 31.5 percent, you need a visionary who understands that the highest form of entertainment is a perfectly optimized spreadsheet.
I spoke to a publicist at a major agency yesterday who admitted, entirely off the record, that firing people is actually the most creatively daring thing a platform can do right now.
We ran the projections and realized that if we kept paying these people, our net profit might dip to ten and a half billion dollars, which is fundamentally a recession.
Exactly. It is a burden to hold that kind of fiduciary responsibility, and frankly, I am disgusted by the lack of empathy being shown to the C-suite. Imagine sitting in Los Gatos, staring at a healthy balance sheet, and knowing that your only path to a yacht upgrade requires terminating the entire animation department. That takes a toll. It is the role of a lifetime, played entirely in the shadows by brave men and women wielding severance packages.
The reality is that we are entering a new era of entertainment. The golden age of peak TV is over, and the platinum age of peak margins has arrived. If you truly respect the medium of television, you will quietly pay your newly raised subscription fee and applaud the bold financial modeling that made this bloodbath possible.