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‘Stranger Things’ Tests Limits of Netflix’s Nostalgia Strategy

Nostalgia programming is a tricky thing. Done well, it can revive treasured memories. Done poorly, it can feel like an ill-conceived attempt at pandering, resulting in a rejection of the show and possibly the outlet responsible for its existence.

Netflix didn’t invent nostalgia, but it’s certainly leaning into it as hard as a “global internet TV network” can, in an attempt to attract and keep subscribers who might be swayed by a reanimated chunk of their childhoods.

Nostalgia is, after all, part of what built BuzzFeed into a web traffic powerhouse. If all those self-described “’90s kids” were that hungry for quizzes about which “The Little Mermaid” character they are, and articles consisting of “Saved by the Bell” gifs, why not actual revivals of the shows they loved?

And so the streamer’s new series announcements over the last year have been heavy on shows that might appeal to the segment of the U.S. population that fondly looks back on the ’80s, ’90s and early 2000s. There was “Fuller House,” the streamer’s “Full House” revival. Another four chapters of “Gilmore Girls” are set to premiere later this year. “Stranger Things,” a horror pastiche set in 1983 that pays homage to Steven Spielberg’s oeuvre, dropped on the service on July 15 and appears to be building a respectable audience through word-of-mouth. They’ll also be resurrecting “Mystery Science Theater 3000.”

Now, we’re starting to get into shows that might appeal more to the generation that precedes Millennials — Gen X. Baz Luhrmann’s hotly anticipated “The Get Down” takes place in late 1970s New York. They’re remaking “One Day at a Time” with Rita Moreno. “Stranger Things,” it could be argued, sits in a sweet spot that commingles younger Gen X-ers and older members of Gen Y.

“Nostalgia’s not a silver bullet,” cautions Dr. Clay Routledge, a professor of psychology at North Dakota State University who extensively researches the topic. “It works best when you celebrate or bring back a sentiment or idea connected to it without stepping on sacred ground.”

But leaning into nostalgia appears to have worked thus far for Netflix. The internet is abuzz with praise for “Stranger Things.” “Gilmore Girls” fans flock to every casting tidbit posted online.

And there’s the case of “Fuller House,” which was for the most part dismissed by critics.

Viewership data on Netflix originals is hard to come by, but if the numbers given to Variety by research company Symphony Advanced Media are anything to go by, “Fuller House” did gangbusters among viewers 18-34, a cohort comprised of a large number of those ’90s kids. An average of 10.1 million 18-34s watched each episode of “Fuller House” in the first 35 days after the first season dropped, per SymphonyAM.

Yet when you compare that average audience to the total 18-49 number, it’s clear just how much the show skewed to that largely Millennial audience: By SymphonyAM’s measure, 15.7 million 18-49ers watched each episode (again, in the 35 days following premiere). That would indicate that only 5.6 million people ages 35-49 watched — a number that by most accounts is nothing to sneeze at, but one that could indicate a potential snag down the line as Netflix tries to grab more subscribers in that older demographic.

While knowing how many people are watching these shows on Netflix is an interesting data point, and not wholly irrelevant, it’s more a piece of the puzzle than the whole picture. Just like premium cable channels like HBO and Showtime and Starz, the real measure of its success is number of subscribers, and herein lies the challenge for Netflix.

The streaming service’s U.S. subscribership took off like Usain Bolt from 2012 through 2015, more than doubling from 21.7 million at the end of 2011 to 44.7 at the end of 2015.

The problem is that there is a ceiling to that growth, one that may be far lower than Netflix execs have publicly predicted. Netflix itself doesn’t publicly break down the demographics of its subscriber base — it doesn’t really need to. But analyst firms like MoffettNathanson estimated in 2015 that 74% of households headed up by someone in the 18-34 range subscribe to a streaming service already, and most of those that don’t choose not to for economic reasons that aren’t likely to change.

“By now it should be increasingly clear that Netflix’s next leg of subscriber growth, barring a move to single-stream, multiple account households, needs to come from the older age demos,” MoffettNathanson senior analyst Michael Nathanson wrote in a note to investors. Streaming service penetration decreases slightly, to 68%, for those aged 35-44, but drops precipitously to 57% for those ages 45-54.

And there’s a very real question about the value the majority of Gen X — and late Boomers that are also a still-untapped customer reservoir — might ascribe to the service. Namely: Is something like a “One Day at a Time” remake, or a “Lost in Space” reboot, enough to make them try it out?

Judging purely from critical raves and internet buzz, it might seem like everything is hunky-dory over at Netflix, Inc. But last week, the streaming service took a beating on the Wall Street after reporting slower-than-expected subscriber growth in its latest quarterly results, both in the U.S. and abroad. It’s backing up money truck after money truck for programming both original and acquired, to the tune of $13.2 billion owed to studios, but it’s not seeing a commensurate bump in subscribers: domestic growth is stalling, and international growth isn’t matching the furious pace of spending.

Slowed U.S. growth has been explained by higher customer churn thanks to rate hikes for subscribers who had been grandfathered in to a certain price, but must now pay $9.99 a month. So what’s a streaming service to do to keep growing, to convince subscribers the extra $1 a month is worth it?

Banking on the pull of nostalgia just might not work for some of those potential subscribers over 35. That’s not so much a function of generational differences, Routledge says, but rather where people are in their lives at certain ages. “In times of uncertainty or distress or they’re not sure where they’re going, nostalgia is a stabilizing force, it grounds us,” he adds.

Most of Gen X is now at a point in their lives where they’re pretty well-grounded. The tumult of their 20s and 30s is behind them; save for a few midlife crises, they simply don’t need to seek comfort in memories of their past. And that could prove a problem if Netflix is going to fork over hundreds of millions of dollars for shows that don’t bring in the subscribers they’re targeting. While it has an ever-expanding back catalog of shows that these subscribers might want to revisit — “Kolchak: The Night Stalker” and classic “Star Trek” live on the service — that might or might not be enough to back up the promise of remakes and reboots.

Good shows are good shows, and they’ll find an audience. But whether that audience is drawn from the existing pool of Netflix subscribers or those who seek out the service is a crucial difference at this juncture. And as with most questions around the streaming giant, only time will deliver the answer.

 

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