Daybreak - Indian broadcasters are pouring money into reality TV. Netflix's collapsing second seasons show why

Episode Date: July 15, 2026

Netflix built its empire on one idea: watch what you want, when you want, all at once. Now it's losing viewers to YouTube, struggling to bring audiences back for season two, and internally discussing always-on live channels and ad bundles you can't skip.Which is to say: it's considering becoming cable TV.The irony is that while Netflix is scrambling for answers in the US, India may already have one. A reality show that airs almost every night at 8pm just cracked Netflix's global top 10. The format that streaming was supposed to kill is doing just fine. And Netflix is finally realising why.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Netflix's binge model is broken. Let me explain. In 2023, when the live-action version of Japanese manga and anime, One Piece aired on Netflix, I finished watching the whole thing in a single sitting. I was obsessed. I hyped it up to everyone I knew for weeks and even rewatch some of my favorite episodes more than twice.

The fantasy settings, fun visuals, and the incredibly well-choreographed fight scenes lived in my mind rent-free, as the kids would say. But when season two came around this march, I didn't even hear about it until someone mentioned it kind of off-handedly in a conversation a couple weeks ago. I asked them if it was any good

and they said yes, that I should watch it. I made a mental note to binge it some weekend and then I forgot. Turns out, this was not just a me problem. One piece was one of Netflix's most watched shows in 2023. But then, Bloomberg reported just a few days ago that in 26, its second season had lost just over 30% of its audience despite positive reviews. That may sound bad, but it only starts to sound worse when you also hear that among Netflix's big returning shows of this year, One Piece was actually one of the better performers.

Some other shows lost as much as 70% of their audience. And of course, for Netflix, that is a problem. Because the number of people returning to shows is a core part of engagement. How long people watch and whether they finish what they start, in modern Hollywood, that's the number that matters. Because engaged subscribers are the ones who do not cancel. Right now, the numbers suggest that Netflix, the biggest streaming service in the world, is struggling to hold on to its viewers' attention. while also losing it to free platforms like YouTube.

It's struggling enough that it's now rethinking some of the very ideas it was built on, like always on-demand content and ads. A growing number of analysts also think that the culprit is the very thing that made Netflix Netflix, the binge model. Now, Netflix itself has not admitted it, and in fact its content chief has gone on record to say that there is no data

that proves weekly releases work better and that binging in fact is the better experience for viewers. But look at what the company has been doing lately. A WSJ exclusive last week reported that the company was considering always on live channels and streaming bundles, which is, in effect, a resurrection of cable TV, the very thing that it had set out to kill. Meanwhile, in India, another experiment is already,

showing early signs of success. A reality show that airs almost every night at 8pm sharp, just like it used to be on TV. And recently, it even cracked Netflix's global top 10. The last couple weeks have shown that there is a lot going wrong at the world's largest streamer. But also, that Indian television may have at least one of the answers Netflix is looking for.

Welcome to Daybreak, a business podcast from the Ken. I'm your host, J. Churchill Verghese, and every day of the week, my co-host Nikita Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Venice Day, the 15th of July. One Piece was not the only show that saw this steep dip in numbers. The Bloomberg report also said that the second season of Beef, an anthology series about people stuck in feuds, saw a drop of about 70%. Also, the live-action version of the animated show, Avda The Last Airbender, saw a 60% dip in viewership in the first week of its second season as well. Many consumers online and analysts have pointed to a few reasons and I'm sure they are quite relatable to any of us who has watched anything on Netflix. One reason is the incredibly long waits between seasons.

I'm sure that most of us are familiar with the jokes about how. the child actors on Stranger Things barely look like children anymore after the show took nine years to finish five seasons. The second is also another one that personally hits close to home. The studio is so

famous for canceling new shows pretty abruptly, often leaving them on cliffhangers. Which has kind of just taught users to not commit to new shows as they release and wait until the series concludes naturally or watch it only if it ends satisfactory.

despite a sudden cancellation. But many analysts are now also of the belief that the people cause is the binge model itself. The thing that had differentiated Netflix in the start. The model drops every episode in a series at once, the show gets a weekend or two of excitement and then silence for two or three years while the next season stays in the works. Netflix has basically trained audiences to be eager about a show briefly and then move on to whatever social media or the platform itself is buzzing about next. Add to that, the fact that the platform puts out hundreds of original titles in a year.

In fact, in 2025, Netflix released nearly 600 originals, which is about two titles every day. That kind of speed and sheer volume obviously means that shows never quite build up the slow word of mouth that keeps people subscribed and by the time season two rolls around, the audience has already moved on. And in between the weights and the there's nothing to watch phases, where exactly are Netflix viewers moving on to? Well, it turns out YouTube overtook Netflix in daily viewing time this year

and US adults now spend about as much time on TikTok as on Netflix. A Nielsen report last year showed that Netflix's share of US streaming time slid from 21% to 17% in two years, while YouTube's rose to 28%. And obviously, what doesn't make things easy for the streamer is that both its rivals are free for viewers, while Netflix keeps increasing its prices. All of this together is certainly coming back to haunt the company.

Here's what Lucas Shaw, Bloomberg's entertainment writer, wrote in his newsletter. Netflix's inability to retain audiences will only fuel the growing investor concern about engaging. The amount of time customers spent watching Netflix last year grew less than 2%. That's a big reason shares in the company have declined over the last year. Investors are worried that Netflix, while still the clear market leader, is losing its edge. To be fair though, Netflix is still a profitable business.

It's still the market leader and it still has the industry's lowest cancellation rates. So this seems to be a crisis of more. or what comes next and not just survival itself. But none of that has stopped Netflix's stocks from starting to drop. They've been sliding since late last year when news leaked that Netflix wanted to acquire Warner Bros. Discovery. The WSG exclusive, I mentioned earlier, reported that the news prompted investors to assume that the company was worried about growth. Uday Cheruwu, a portfolio manager at investment firm Harding Lovener, which invests in Netflix, by the way,

said in the report that Netflix's decision got investors starting to think, are we missing something? Of course, this means that the company is now in a race to prove that it hasn't hit its peak yet, that it can, in fact, grew. Stay tuned. In the same week as the Bloomberg piece, Netflix announced a slew of new partnership,

and plans that rethink its current content strategies. For one, it's licensing short videos from publishers like BuzzFeed, Continast and Hirsts onto its homepage from August 3rd onwards, so that it can experiment with short-form content around lifestyle, food, fashion and celebrities. And then there's the big announcement, the one that the WSGA exclusive broke. Netflix executives have been internally discussing channels that are always on, continuously streaming and even bundling rival services like Peacock into its app so that you can pay Netflix one bill and get access to different streaming services through it.

Now, channels you can't pause, ads you can't skip one monthly bill. Sounds familiar. And the ads bit matters particularly over here. Netflix's ad business, even though it's in its early stages, has generated about $1.5 billion just last year. Earlier this year, the company said that it expects to double its ad revenue in 2026. And live programming would give it something its on-demand library can't. Ads, nobody can fast forward or skip. Basically, the streaming leader believes that the fix for people drifting away from its platform

is programming that is always on at a fixed place at a fixed time. Which is interesting because there is in fact a geography where TV never stopped working that way. while Netflix's shows were slowly tapering off by season 2, in India, something quite different is playing out. Something that might be a key to crack Netflix's falling engagement. The reality show Big Boss just wrapped up season 19, and it in fact had grown a lot in this particular season. Gio star's own numbers reported that watch time was up by 65% on colours and Gio Hot Star

with the finale being watched live by 4.5 million on digital and more than 1.30 million TV viewers. Now, that's the thing about reality formats. The season two problem and all its baggage doesn't really carry over. In fact, Tanya Bami, Netflix-India's series head, explained why quite succinctly in a money-controlled report. Here's what she said. Unless it's a documentary, unscripted shows are franchises. Basically, that means that while scripted stories can end or drag on, formats can stay fresh forever through new castes while still maintaining familiarity with audiences. That's how a show like Big Boss gets to nearly 20 seasons.

It is also a very solid way to build and maintain habits with viewers because you'll always have a dedicated audience that returns for every season. The other obvious plus with reality is the comparative ease of production. Non-fiction is generally cheaper to produce and as Bami says in the Money Control report, much faster. That immediately takes care of one of the most popular pain points with Netflix, reducing the gap between seasons. Which is exactly why several streamers and broadcasters across India have been increasing or continuing their investment in unscripted non-fiction

even as TV money is shrinking. An EY and Federation of Indian Chambers of Commerce and Industry report states that ad revenue was down 10% last year and millions of homes moved to connected TVs and free-dish TV from paid subscriptions. Star Plus, for example, is backed to non-fiction after four years with a quiz show called India's Top 1% starring Anil Kapoor. Meanwhile, Sony is readying KBC or combination. Kouropathy Season 18 and also Weel of Fortune with Aksha Kumar.

Prime video is also adapting a Dutch reality show called The Alliance, hosted by Kunal Kamo. Now, this industry-wide trend is also reflected in Netflix's current and upcoming lineup of content in India. Monica Shergill, the Netflix-India VP of Content, told E.T. that the company plans to launch four titles a week in the second half of this year, with unscripted nonfiction as a growing part of its slate. The most recognizable show airing right now is Lockup. The reality TV show and mentioned earlier,

which is hosted by veteran Bollywood director Farah Khan and actor Tritej Desh Mug. The concept follows contestants locked in a prison set and they have to complete certain tasks so that they can escape. Another strategy Netflix is adopting is importing formats and communities by signing on YouTube famous creators. That's how it started streaming season two of India's Got Latent comedian Samayana's talent show, which is being simulcast on both YouTube and Netflix. The company is also tying up with other comedians like Bhuvan Bam of BBK wines and Zakir Khan.

All these experiments are already paying off. Tanya Bami told Money Control that lockup saw popularity in 12 countries when it broke into the Netflix global top 10, which was especially impressive because the daily release format meant that the show was not dubbed and was available only with subtitles in non-Hindy speaking countries. As for India's Got Latent, it released simultaneously on YouTube and Netflix and pulled 45 million views on YouTube and more than 2 million on Netflix. And even with that lower number on Netflix, it still ranked number 2 on Netflix India.

So Netflix's new bet right now does not seem to be a lot. just about having people come back for season two. But to build a new habit altogether, where they return for the same or similar content every single day. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories,

newsletters and a whole bunch of premium podcasts. To subscribe, head to the. Ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.