With a subscriber miss, ballooning costs, competitors circling and an existential need to produce more in-house hits, the dominant streamer may be starting to look a lot like — gasp! — one of the entertainment giants whose world it turned upside down.

Over the course of a few days this spring, each top talent agency was summoned to Netflix's extravagant For Your Consideration space in Hollywood, where the reps were plied with snacks and drinks before content chief Ted Sarandos unfurled dizzying presentations about the streamer's growing original programming needs.

It was the second time that Netflix had hosted this series of showy gatherings, and several attendees noted a stark contrast between 2018, when executives were confident to the point of boastfulness, and this year, in which they projected a more humble air. The message received by multiple attendees: We come in peace.

Netflix is at an inflection point. After a half-decade of near unchecked dominance in the premium streaming video space that allowed it to aggressively poach entertainment's top executives and A-list creative talent, the company now finds itself under attack. Threatened by its rise, and newly bulked up by a series of mergers and acquisitions, legacy studios Disney, WarnerMedia and NBCUniversal have begun pulling their programming off Netflix and prepping the launch of their own streaming services. Add in Apple's planned TV platform, and four very well-funded, content-packed new rivals will hit the market within the next year.

"Competition is changing their business," says MoffettNathanson partner Michael Nathanson. "They're transitioning to a more uncertain model. They have to make more original content and it has to be as good as anyone's."

With a market-leading 152 million global subscribers, 10 percent of TV screen time in the U.S. and a several-year head start, Netflix may be too big to fail. But that hasn't stopped a growing chorus of questions over how long the "Netflix bubble" can last. Its ballooning costs — analysts estimate that it will spend between $10 billion and $15 billion on content this year — means it burns through cash ($3 billion in 2018). Its current debt load is $12 billion.

Worries ratcheted up July 17 when the company reported its first subscriber loss in the U.S. in eight years. Its high-flying stock came crashing down 15 percent, erasing $24 billion in value in less than a week. "It's notable that they lost subscribers before they lost a meaningful amount of content and before there was direct competition from their suppliers," says Wedbush's Michael Pachter, a noted Netflix bear. "This suggests they will face additional pressure when they lose content later this year and as their current [licensing] contracts with Warner Bros., Fox, Disney and NBCU expire."

Mounting expenses and an insatiable need for hits — if these problems sound familiar, well, that's because for most media executives, they are. As it matures, Netflix looks less like a high-flying tech interloper and more like the entertainment company it's come to think of itself as. As one insider sums it up, "In a world where Netflix is no longer the underdog and no longer has to prove itself, it is behaving much like the studios."

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Netflix's refusal to play by Hollywood's rules — dropping episodes all at once, not releasing ratings, overpaying up front for top creative talent in exchange for no backend profits — has been a source of external tension and envy. But the studios have gotten savvy to its ways and have started to fight back. With $71.3 billion in Fox assets now in its portfolio, Disney wields significant firepower in negotiations (it has also begun to eliminate many backend deals); and with the backing of AT&T, WarnerMedia doesn't have to think twice about shelling out $500 million to keep J.J. Abrams' Bad Robot in the family.

With Apple in the mix, and Amazon and Hulu both upping their spending, in-demand creators have more options than ever. "That sort of shiny, new toy quality that Netflix had a couple of years ago, I'm not feeling so much in the marketplace," says ABC Entertainment president Karey Burke. "People who do really care about telling stories that last for many seasons, they're starting to turn back to cable and broadcast as really viable, if not optimal, alternatives."

One reason, sources say, is that Netflix deals aren't always as lucrative as they once were. Its cost-plus model, in which it pays a premium up front for full ownership, might be a fine deal for a mediocre show but cuts profit participants out of the big payout that once came with a long-running hit. "We don't make a lot of money when we do a deal at Netflix now," gripes one producer with a show at the streamer. "They're not throwing around cash the way they used to."

Netflix also isn't keeping its shows around for very long. It's become standard practice for the streamer to cancel a project after a second or third season, cutting creators off from bonuses that don't kick in until later seasons — though Netflix insiders argue that someone who creates a hit for the streamer ultimately is paid handsomely. Cancellation decisions have been hard for creative partners to understand because viewership metrics have historically been opaque. Talk within dealmaking circles has centered on Netflix's internal metric — dubbed "efficiency" — for determining if a show is worth renewing. The simplest definition of efficiency, per sources, is the ratio of the show's cost to number of viewers, though Netflix is said to place more value on luring new subscribers or keeping those who seem in danger of canceling.

Still, the lack of transparency has led to confusion around the cancellation of critical darlings like One Day at a Time and Tuca & Bertie. "T&B is critically acclaimed and has repeatedly been called one of the best new shows of the year," Tuca & Bertie creator Lisa Hanawalt tweeted July 24 after she learned her show would be ending. "None of this makes a difference to an algorithm, but it's important to me."

While there are frustrations at Netflix as there are at any studio, the streamer is still one of the most talent-friendly places in town, which explains why everyone from the Obamas to Beyoncé to Game of Thrones creators David Benioff and Dan Weiss to Adam Sandler inked deals there. "There is an empowerment of the creative process at Netflix that is genuinely unique in my experience," says Stranger Things executive producer Shawn Levy, who signed an exclusive TV deal there in 2017. "Over the course of a dozen feature films and TV shows made for more traditional studios and networks, I've never encountered such an absence of committee-think, so little bureaucratic interference."

Netflix has been especially aggressive in poaching talent from Disney ahead of the launch of Disney+. In addition to showrunners Shonda Rhimes and Kenya Barris (who were both at ABC), it has inked deals with Gravity Falls creator Alex Hirsch, High School Musical director Kenny Ortega — "They're giving me a voice" — and Doc McStuffins creator Chris Nee, who says, "Netflix was offering me a creative home where I could [tell stories] that didn't necessarily fit in the Disney brand. That creative freedom felt like an opportunity I could not turn down."

Talent will continue to work with Netflix as long as it is able to write big checks, says Pachter. "I'm optimistic that Shonda Rimes, Ryan Murphy and Kenya Barris will make great shows," he adds, "although it's likely that each will produce no more than one or two over the next five years."

Netflix also is changing the way it talks about viewership on its platform. While there's nowhere near the level of data available about its originals that there is about traditional broadcast and cable shows, the company has started to release select, unverified audience numbers — like when it reported in July that nearly 41 million households had watched at least one episode of the third season of Stranger Things in its first four days. "The viewing numbers for our show, and the transparency about how those numbers ranked relative to other shows and movies, that was thrilling information," says Levy.

Per sources, a month after a show's launch, Netflix often schedules a call with the creative team to discuss how many people watched either one episode or the whole series after its first week and first month on the service. "We are trying to get to a place where we can be a lot more transparent both with our producers and with our customers," Sarandos told investors in April.

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In 2018, when Netflix received more Emmy nominations than HBO — then tied for most wins — it appeared to signal a changing of the guard. But one year later on July 16, HBO was back on top with a record-setting 137 nominations, 20 more than Netflix. The next day, the company was dealt another blow, reporting that it had added a fewer-than-expected 2.7 million subscribers, including a loss of 130,000 U.S. members, during its second quarter. "It's easy to overinterpret the quarter membership adds, which are a bit noisy," CEO Reed Hastings told investors, adding that he expected to add a substantial 7 million subscribers during the third quarter.

One cited explanation for the miss was a price increase that had gone into effect in the spring, raising the cost of its standard plan in the U.S. to $13 per month (hikes historically impact subscriber renewals for a period of time). Hastings also placed blame on the quarter's content, which didn't draw enough new subscribers.

After years of riding the wave of cord-cutting, Netflix appears to be rubbing up against market saturation in the U.S., where it has just over 60 million subscribers. "Those who haven't moved [to streaming] yet are less likely to move in the immediate future," explains media consultant Matthew Ball, an Amazon alum.

International is where the majority of the company's growth will come from in the years ahead — experts have pegged the potential market at between 700 million and 800 million outside of China, where Netflix doesn't operate — but it's in the U.S. that Netflix will face the most competition from an influx of new streamers. "The story will become whether they can sustain their U.S. subscriber level, if not try to push it up a little bit more, in the face of this rising competition," says Macquarie analyst Tim Nollen.

Its rivals aren't going easy on Netflix. Disney took the first shot with the news that it would stop licensing its films to the streamer as it prepares an October launch of its $7-per-month Disney+, which will be loaded with IP from Marvel, Pixar and Lucasfilm. Then WarnerMedia and NBCU pulled back The Office and Friends for their services. Netflix says no one show makes up more than a percent or two of its overall viewing hours. But in the aggregate, the loss of that programming could change its brand identity.

"I can tell you what an HBO show is," says Watchmen showrunner Damon Lindelof, who has an overall deal with Warner Bros. TV, about one of the advantages that a legacy business has in the streaming wars. "What is a Netflix show versus a Hulu show versus an Amazon show? I can't answer that question."

Few analysts expect Netflix's subscriber base to take a hit once consumers have more options, but they do predict that people will be more likely to turn their subscriptions on and off based on what they want to watch. "If you want to cancel HBO and Showtime on linear, you spend an hour on Sunday calling your cable provider," says Nathanson. "Now, churn is just a click away."

All this competition also has had a less-publicized effect: It's making Netflix executives more poachable. Fully trained in the ways of working for a streamer, they're desirable candidates for top jobs at the coming services — even if it's hard to match the sky-high salaries that Netflix has used to lure executives for the past several years. Disney+ recently recruited two such executives, including Matt Brodlie, who focused on YA acquisitions like To All the Boys I've Loved Before.

Netflix is proud of the transparent, decentralized corporate culture it has created, and executives credit employee freedom for its ability to move fast and grow so quickly. But that environment also has been put to the test as Netflix ballooned to 7,100 employees at the end of 2018. The company's quarterly two-day leadership meetings have grown so large — between 600 and 800 employees — that there are only a few spaces that can hold them, often the Langham Hotel in Pasadena (though July's event saw staffers fly to Iceland). For creative partners, the sheer number of development executives has made it a challenge to know who to call with a hot show. Per a creative partner, one powerful vp didn't have clear answers when asked about how to pitch a specific project to the company.

Those agency gatherings this spring were supposed to address such questions. But one attendee said he walked away more confused than before: "I didn't get a great understanding of the Netflix mission other than world domination."

Lesley Goldberg contributed to this report.

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Netspeak

Efficiency (n.) Netflix's term for a show's cost-benefit analysis. It's a ratio of a project's budget to its viewership, with more weight given to new subscribers and those at risk of canceling their membership.

Keeper Test (n.) When managers ask themselves whom they'd fight to save. If you fail, you're given a generous severance and replaced with "a star."

Sunshining (v.) When a Netflix employee acknowledges a misstep or explains their decisions in front of colleagues in an effort to be transparent.

One:One (n.) The way Netflixers refer to a one-on-one meeting. Employees organize their days around these frequent check-ins.

360 Review (n.) Employees review colleagues — including their bosses — through a non-anonymous software tool called 360. There are even "real-time" 360 reviews, in which a team will go around the table at a meal and give feedback on everyone else.

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A version of this story first appeared in the Aug. 7 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.