Problem for not only Netflix, but any other mammoth media company that wants to appeal to >50% of the population: you can't exclude half the political spectrum (either half).
In the last part of the 20th century, the utterly drab and lackluster Three-Letter Networks were drab and lackluster in part because they were trying to avoid offending as large a portion of the population as possible. But, with way more than 3 networks competing now, you can't be drab and get anyone's attention. Which means either you have content that's offensive to lots of people, and hope that it is offset by other content that appeals to those people, or you shrink down to a niche provider that appeals only to a much smaller portion of the population.
The third factor is that many companies cannot get financing or keep up their share prices unless they can pretend they will be as big as Facebook, so just existing in your little niche may not work well either. Unstoppable force meets immovable objects...
"you can't exclude half the political spectrum (either half)"
That is a changing dynamic. For one, the "halves" keep changing, sometimes it's more polarized and sometimes more moderate.
And during a lot of the 2010's, it was perfectly viable to exclude the conservative "half". They just didn't push back much, at least when it came to spending.
But now things are changing. In Florida, Disney World may be losing their special political status due to Disney's political posturing. That would have been unthinkable 5 years ago. Now, as you say, large companies have to worry about alienating anyone.
Whether this will cause further fracturing, or we go back to "drab and boring", I don't know.
There's also a young/old dynamic. Some companies feel safe appealing to young people, who they perceive as progressive. That may work, but young people are also unpredictable, so it's not necessarily a good long-term strategy.
I think the quality of content is not related to whether is for or against some part of the population. As a matter of fact I find it quite dull and artificial when is so obsessively centered on some aspects like race or sexuality.
It reminds me of Don Quixote: it's a masterpiece of literature but I find different parts of varying quality. Some parts are eternal and you can relate to the glories and miseries of people from 500 years ago. Other parts, like when Don Quixote starts to ramble about honor, what is honorable or not, and so on and on, are quite boring. Not because honor is not important, we have laws nowadays about defamation after all, but you cannot make it the center of your life.
Making your content either offensive to some part of the population or making it all about some political agenda results in low quality content, IMHO.
What is isn't going to do is make Netflix a partner to something really out there, like Blaze TV.
This entire change to their guidelines feels dishoenst. They paint it as their duty to encourage pluralism, but they in fact just want to platform just enough content on the sidelines to make off with the largest profit profit margins.
It's another surrender to the power of the almighty dollar. I'd much prefer if Netflix was smaller and other competitors were around to fill that hole in the market so I could, as they say, vote with my wallet. (That phrase is never a dismissive sham, I swear!)
In the last part of the 20th century, the utterly drab and lackluster Three-Letter Networks were drab and lackluster in part because they were trying to avoid offending as large a portion of the population as possible. But, with way more than 3 networks competing now, you can't be drab and get anyone's attention. Which means either you have content that's offensive to lots of people, and hope that it is offset by other content that appeals to those people, or you shrink down to a niche provider that appeals only to a much smaller portion of the population.
The third factor is that many companies cannot get financing or keep up their share prices unless they can pretend they will be as big as Facebook, so just existing in your little niche may not work well either. Unstoppable force meets immovable objects...