They know exactly who's watching what. Those shows were just not hits.
2. We don't actually know how the popularity looks because we don't have the numbers. Even with the numbers, show popularity is a function of marketing and time allowed to grow, which is exactly what the article highlights.
The lack of an external signal doesn't mean that everything is fine inside.
The best companies, with true vision, balance their philosophy with the interests of investors and are okay if not everyone is behind their short term moves. The statement IMO either has its original meaning in my first post, or it means Netflix overvalues its short term stock outlook, and that is affecting content. No matter how you slice it, content at Netflix will continue to suffer so long as that holds true / Netflix continues to make similar statements.
Obviously you can't spend a lot on shows that are losing money and stay solvent. But beyond that it's complicated
If you optimize only return-per-unit or viewers-per-unit (unit being movie, series, whatever) you could easily end up being a place that only makes a small number of "big" mass market appeal shows and movies.
That's a business model, but it's not the only one that makes sense. If you want to be a "big tent" sort of content place (very much where netflix started) you need to make some narrower appeal stuff. You have to make sure it still makes you money, but with a subscription service (rather than rental) this isn't actually easy to evaluate.
You also have to thing about time line. If you optimize for ROI on a short time (e.g. initial release) vs long burn, you'll make different decisions.
So part of this isn't just "you have to be a viable business", it's also "what sort of viable business".
You are alone in that, since it seems that everyone on the content creation site is stubbornly insistent on getting a paycheck. So if for actors, writers, camera men, set builders etc both great art and money go together, why should be different for the corporate overlords.