Earlier last week an influential media analyst declared Netflix had officially won the streaming wars. Matthew Belloni, an entertainment journalist and founder of the news startup Puck, posted an image to X of his Netflix homepage that encapsulated the current state of streaming. “ALL of the Netflix Top 10 movies right now are licensed from legacy studios, and nine are from studios with their own streaming services (including four recent hits from Warner Bros.),” Belloni wrote. “The Streaming Wars are officially over.”

The fact that Netflix’s competitors have forked over some of their most prized content signals they are done trying to outspend and outmaneuver the industry’s biggest streamer. Instead they now see Netflix as a distributor that has both a vast audience and a willingness to license their content.

All this comes as some users sour on streaming, with complaints about rising prices and an increasingly smaller library of new titles to watch. This apparent paradox, of beating the competition while disappointing users, could be attributed to the theory of “platform decay,” which describes the slow decline of online platforms of any kind.

“Here is how platforms die,” Cory Doctorow, the writer who coined the phrase, wrote in an essay initially published on his website and then reprinted in Wired. “First, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.”

Platform decay

Doctorow’s less polite term for the platform decay is “enshittification.” He argues that it’s baked into the business model of the biggest tech companies.

“It is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a ‘two-sided market,’ where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them,” Doctorow writes.

The fact that Netflix seems to have won the streaming wars, one of the most competitive business fights in recent memory, isn’t a surprise. After all, it was a pioneer in direct-to-consumer streaming that wasn’t attached to a cable subscription. It amassed an international audience that dwarfs that of its competitors, which still falter in overseas markets. What does seem counterintuitive is that Netflix is criticized by some for the poor quality of its shows and declining user satisfaction.

The famed Hollywood historian Peter Biskind told Fortune he found Netflix “unwatchable.” Five years ago the blogger Matt Stoller wrote that should Netflix win the streaming wars it would hurt the entertainment industry, by emphasizing mediocre content and limiting options. Stoller argued Netflix would use its position as the strongest streamer to undercut filmmakers and “bargain more aggressively against creators,” he told Fortune recently. When this happens it will become harder for a broader assortment of content to be made, which leaves viewers with fewer options to watch. Now, five years later, he says “it seems like it’s played out consistent with what I had said.”

A report in The Information from 2019, the same year of Stoller’s original blog post, claimed Netflix had a habit of canceling shows after two seasons, regardless of how popular they were, because showrunners tended to ask for raises after their second season. Making less content would seem counterintuitive to a media company hellbent on outmuscling its competition. (A person close to Netflix told The Information it did not have such a policy).

“The products are not as good as they used to be,” Stoller now says.

Netflix did not respond to a request for comment.

Users do seem to have become generally less enthused with streaming services than they were in recent years. The Wall Street Journal found that around 25% of streaming customers canceled at least three streaming services over the last two years, up from 15% in 2022. Cancellations as a percentage of overall users have also grown, possibly because users are cycling in and out of streamers more frequently than they had in the past. Still, even though more people are canceling subscriptions than previously, most streamers are still growing. For example, Netflix added nine million users in the third quarter of 2023.

While Doctorow’s theory of platform decay might describe the user experience, it doesn’t necessarily apply to the company’s business performance. Netflix has 247 million subscribers more than Max, Paramount+, and Peacock combined. Meanwhile, its stock price has soared 53% over the last 12 months.

Despite claims of lackluster movies and TV shows, Netflix makes regular appearances during awards season. For this month’s Golden Globes, Netflix received 28 nominations. In terms of Oscars, it has well north of a hundred nominations over the years, winning over 20. Its well-known practice of offering few creative notes to filmmakers has helped it attract acclaimed directors like Martin Scorsese, Alfonso Cuaron, and Noah Baumbach, whose movies will, in theory, be in Netflix’s library in perpetuity.

Netflix licenses hit shows and box office smashes from competitors

Early on, major studios were happy to license their content to Netflix. But once the streaming wars reached their peak, from 2019 to 2020, the studios stopped, preferring instead to keep movies and shows on their own newly launched streaming services. Some of the most prominent examples included binge-watching staples like Friends, which Warner Bros. Discovery took to Max; and The Office, which returned to NBCUniversal’s Peacock.

In a speech in December, Netflix co-CEO Ted Sarandos called the lack of licensing an “unnatural state” for the entertainment industry because studios had long been built on the practice.

In recent months, however, a growing number of legacy media companies have accepted Netflix’s position as the dominant streamer and licensed it their content in an effort to tap into its huge audience. For example, WBD licensed box office hit Aquaman; NBCUniversal handed over the rights to stream Suits, the legal dramedy starring Meghan Markle; and Disney is working on a deal to stream 14 titles including Lost on Netflix.

Many such productions found success they may not have achieved on their parent company’s streamer. Suits, for example, set a record for the most weeks atop Nielsen’s streaming ratings—despite the show debuting in 2011.

“One way or another, we’re in business with nearly every supplier, including our direct competitors and I think that we bring a ton of value to them,” Sarandos said on an earnings call in October. “When you think about what happens when that show runs and becomes a huge success on Netflix, it has lasting value.”

WBD CEO David Zaslav says he’s happy to license Aquaman and other DC superhero movies to Netflix if the money is good enough under the belief it helps attract viewers to the franchise’s other movies. “In many cases it really helps us,” Zaslav said on a recent earnings call. “People come back and then they want to see the full bouquet of DC movies and the only place to do that is” on Max.

Some Wall Street analysts agree with Belloni and his tweet that the fact Netflix’s competitors license content to it is a sign of its impregnable position atop the streaming heap. While other media companies were willing to spend, and lose, vast sums of money in an attempt to compete, they’ve now pulled back on such an approach. Disney, the closest of Netflix’s rivals in terms of subscribers, plans to cut $2 billion from its content spending this year.

“Competition from the other media streaming companies has peaked,” Evercore tech analyst Mark Mahaney told CNBC last month. “It peaked when the CEO of Disney got fired for ‘excess streaming losses.’ All you’ve seen the other streamers do now is cut their spend…and they’re licensing to Netflix. So the competitive dynamics have changed 180 degrees from a year and a half ago.”