On the surface, it looks as if Netflix (NFLX -0.86%) had a decent night at the 71st Primetime Emmy Awards Sunday night. The leading streamer came away with 27 trophies, second only to AT&T's (T 0.77%) HBO, which brought home 34 awards. 

It was a step down for Netflix after it tied HBO for the most wins a year ago at 23 apiece.

However, that wasn't the real disappointment for the video disruptor. Once again, Netflix failed to grab one of the event's two marquee awards, best drama and best comedy. Netflix has never won either award despite throwing billions at original programming since 2012.

Instead, this year those awards went to Amazon's (AMZN -0.22%) Fleabag for Outstanding Comedy Series and HBO's Game of Thrones, the epic fantasy hit that closed out its final season on top.

Notably, Netflix is the only one of the major streamers to never have won a best series Emmy. Amazon has won Outstanding Comedy Series two years in a row now after Marvelous Mrs. Maisel won last year, and Hulu took home the Outstanding Drama Series in 2017 with The Handmaid's Tale.

Netflix also won just four Primetime Emmys, with the bulk of its wins going for Creative Arts categories that are more technical or are in more minor categories like documentaries. Here, Netflix finished well behind HBO, which had nine, and Amazon, which finished with seven.  The awards Netflix brought home at the big show were:

  • Directing for a Drama Series: Jason Bateman, Ozark
  • Supporting Actress in a Drama Series: Julia Garner, Ozark
  • Lead Actor in a Limited Series: Jharrel Jerome, When They See Us
  • Television Movie: Black Mirror: Bandersnatch
The reception area at the Netflix headquarters

Image source: Netflix.

An ROI problem

Netflix's Emmy-night flop might not be so concerning considering that the company has built by far the biggest global streaming platform even without the judges' stamp of approval for best series. Yet, with every passing year, the company's lack of the industry's biggest accolade becomes more glaring.

First, CEO Reed Hastings has regularly used the Emmy Awards to chart the company's own progress in its quest to dethrone HBO as the champion of original content, and he regularly touts the total of nominations and awards Netflix gets. In the company's second-quarter shareholder letter, management said that 40 of its titles had been nominated for 117 awards, adding, "We are incredibly proud to offer best in class original programming in so many different forms." 

But the greater problem is that the thrust of Netflix's original content spending has been on television, not movies, and the Emmys are the industry's standard for quality. That Netflix racks up nominations is a credit to the company's studio, but it's a problem that it still hasn't won a best series award. That has to make investors wonder if the streamer is spending its money as effectively as it could be, or getting the best return on its investment.

Netflix spends far more on content than any of its rivals. This year it's expected to plunk down an estimated $15 billion in programming, both original and licensed. There's no precise figure for how much the company spends on original U.S.-based TV, but content chief Ted Sarandos said last year that 85% of new content spending is going to originals. Given the company's preference for TV over film and the supremacy of American content, it's likely Netflix is spending at least half, if not significantly more, of that $15 billion budget on first-run U.S. television.

HBO, by contrast, is spending an estimated $3 billion on content this year, which includes licensed programming, while Amazon is set to spend about $6 billion this year.

The competitive landscape is about to get much more difficult for Netflix. Walt Disney and Apple are jumping into the fray, among other new competitors, and AT&T has big plans for HBO Max, its new streaming service set to launch next year. Meanwhile, the loss of Netflix's two most watched shows, Friends and The Office, is putting additional pressure on its originals lineup.

Now, more than ever, the streamer needs to get the most value out of its original content budget so it can retain subscribers who may tempted to switch to one of the new streaming services -- and so it can continue to add new ones. After another disappointing night at the Emmys, investors should be asking if Netflix is really any better than the competition.