It's not possible to predict in advance what media will become popular with consumers (and thus profitable.)
Moreover, popularity/profitability does not correlate with production quality at medium and high quality levels. (That is, bad production quality rarely becomes popular. Medium and high quality may or may not become popular, and becoming popular is uncorrelated with production quality.)
Since a) most productions are unprofitable; b) you can't predict which ones will be popular; and c) as long as you're at "medium quality" or above, adding more quality does not improve your chances of being profitable, the optimal strategy for content at scale is to invest in making as many medium-quality productions as possible. The risk involved in making a few high quality productions is much greater.
Also as Netflix loses third-party programming they probably don't want to be seen as a barren wasteland.
Personally I don't have a problem with the mediocre shovelware originals so much as their itchy cancellation trigger finger that doesn't seem to give shows with devoted but small audiences enough of a chance to grow over a few seasons and at least finish their main story arcs. People are less likely to watch a series that simply ends on a permanent cliffhanger.
Netflix seems to be searching for the next Stranger Things and less willing to accept a spectrum of cult/niche hits.
1. You can spend more money for more quality, but there are diminishing returns. The price goes up faster than the quality does .
2. Spending more money doesn't guarantee higher quality, it is possible to produce expensive flops. So making fewer more expensive movies and shows increases their risk considerably.
3. As the studios and networks have shut off the content spigot in favor of their own streaming services, Netflix has a very large inventory hole to fill. Binge watching exacerbates this problem as it is easily possible for a user to consume an entire season over a weekend or even over a day, since some seasons are only eight episodes.
I think Netflix is going to try to spend their money a bit more strategically, perhaps changing the "season" model to something more flexible. Or maybe going the "feature film as pilot" route. There are problems with this in terms of locking down the availability of the key talent, but Netflix has been having good success with giving actor/writer/director/producer folks a piece of the action (eg. Jason Bateman is lead actor, director, and producer on Ozark), so maybe they can make that work.
Alternatively, if they continue with the spaghetti against the wall strategy, maybe they can do something about cancelled series ending in an abrubt never-to-be-resolved fashion. Either getting writers to eschew cliffhangers, or produce an ending episode that is only uploaded if the show is cancelled, or something.
You have to remember that a lot of cheap TV makes money. Sure, not many people may watch it, but that doesn't matter if it's cheap enough to make. That's the premise of a lot of the terrible reality TV you see.
The same principle applies to movies. The ideal film isn't another Star Wars or Avatar; it's the Blair Witch Project. It cost tens of thousands to make, but grossed almost $250 million globally.
You may notice that Netflix has a bunch of zombie movies and things. Horror films are generally cheap to make, and horror fans are a reliable audience.
I attended a preview of a NETFLIX movie similar to Braveheart. It was ok but it was no where near the quality of Braveheart. I think that speaks to the fact that they are just trying to build up content without attention to quality.
Also, the way they measure success is by the number of viewers. That indicates that you have to produce content that reverts to the mean. Rarely is that the best quality. And, the dropping of whole seasons at one time makes it hard for writers to develop characters. So you get some very shallow plots written since you can get that done really quickly.
It also makes it hard for viewers to get attached to the characters. I know I've watched a whole season in less than a week and have felt very unsatisfied. Similar to eating food just because it's available and you're hungry. I feel full and ready for another series. Yet, I barely remember what I saw and have no attachment to any of the characters. What could have been a great series is just a quick snack.
I generally prefer HBO Max in that if a new show comes out there is a much higher chance it is something I'll like - though Netflix makes so much more it's probably about even in quantity of shows I like.
My guess is making shows is very expensive and a gamble! Plenty of projects that look good on paper get panned. Plenty of shows that are considered "crap" probably get a huge amount of views against their cost. I still think this is a semi-overlooked problem to have such a large brand, but ultimately tough position to be in.
Netflix is a distributor, not a producer. Originals mean that they buy the rights to prevent people from watching the stuff elsewhere. They do partner with production companies, and maybe they do produce some content themselves but it’s really not their core business.
That said you could have asked why don’t they buy higher quality content?
Well, first they usually buy content _before_ it’s actually made. So difficult to say how the thing is going to turn out. So they need to diversify to make sure some of it is going to be good.
Then, they do buy a lot of high quality content. They won 16 academy awards and a lot of other awards. So at least the industry thinks some of it is pretty good.
And then there is the retainment problem. If you only had a little high quality content, people would just binge and find themselves without anything to watch and unsubscribe. So netflix has “shows you just can’t miss” to get people to subscribe, and then shows to keep people subscribed which tend to be of lower quality.
Also there is the platform content war fueled by tech money. Between the incumbents, (disney, hbo, etc,) and the new platforms (netflix, amazon, hulu, etc.) there are a lot of buyers on the market.
So the high quality stuff gets more and more expensive, and there’s less of it as it gets spread out.
I'd also wonder if part of Netflix's goal is making stuff that's high-enough quality to fit some part of a bell curve. This would mean making a lot of what amounts to low-quality content, to considerable portions of the Netflix audience.
Upping the quality level could then essentially shift the area where Netflix fits the curve, and cause the outflow of a lot of subscribers who perceive that they are paying for more quality than they want or need.
This could imply that your being here and asking this is just part of the way it works, given where you fall on some perceived-quality histogram, if there is such a thing.
Quality might get more subscribers, but they also want to keep them. To do that, there must frequently be something new to see.
1. Agile might work to test demand for software products, but when applied everywhere else it fails miserably. Just look at the horrible products released (and quickly terminated) using this method in the last 10 years. Except for Apple, the rest of the industry follows the experimentation dogma religiously, forcing producers to chase profits without regard for craft. Netflix's used this method to turn movie production into attention maximizing algorithms.
2. Tech (fueled by the ad industry) has penetrated Hollywood and injected propaganda (ex: woke) into every production. Entertainment has essentially been turned into adverts, where experimentation on greater ROI lead to the deterioration of quality. Think of content disguised as ads - Netflix has turned into another Google search experience.
The brainwashing machine is starting to crumble.
Writing is HARD. It's one of the hardest things you can do, and being exceptional at it is rare, and even when you do it well people might not notice.
Whereas spectacle is relatively easy.
And don't get me started on the "normalisation" of groups X Y and Z, or the diverse stuff.
Sense8 is a decent example. Had everything including out-of-body mind linked group orgies with every available sexual orientation. Lol! And it was entertaining,
But guess what? Wasn't really that great. Haven't bothered watching season 2 or 3 and probably won't.
Sometimes optimizing near-term metrics, like engagement, is easier. But it doesn't get at what's important. You can optimize engagement, but harm lagging metrics like user retention and brand authority. In other words, you can easily create click-bait, but it will sully your brand, and just put you in a vicious race to the bottom as you chase more and more engagement, from fewer and fewer subscribers that aren't interested in your brand anymore.
Most of the time (with a few exceptions) you notice that they are half baked movies or uninteresting stories that have been seen dozen of times.
But the thing is that for the past year or more, there are almost no more real recent "movie theater" grade or blockbuster movies that are added to the libraries. Everything is cheap or Netflix original or old movies that are available in tv for a long time.
So, when I want to watch a movie, I lose hours looking at the catalog and finally find nothing. In despair I go to Amazon prime to find movies...