Having worked close to the recsys folks at Netflix, I can tell you that this statement couldn't be further from the truth.
Then on top of that, similar to YouTube, half of that content are things I have already watched. HBO and Amazon are even worse in this aspect but it just drives me crazy, feels like seeing the same 100 movie options over and over for months. Has the catalog shrinked that much over the years?
I started keeping a separate list of films to watch on IMDB, but 6/10 times they are not available on any service except for rent in AppleTV.
I'd guess they push you to their content for the same reason they make that content in the first place: they believe you'll like it and keep watching it.
Ad placement is one wrinkle that would incentivize promoting their own content, but I don't get the impression that's big enough to make the difference at the margins.
I wouldn't tbh, though I'll admit I'm speculating solely on public information. During the 2023 strikes, SAG-AFTRA and the WGA negotiated additional residuals based upon whether 20% of the streaming services subscriber base viewed the content within 90 days of release.[1] So, streaming platforms are evidently willing to share subscriber viewership data with 3rd parties if it's a contractual requirement.
I would be surprised if content licensors haven't negotiated an as good or better deal for themselves.
[1] https://variety.com/2023/biz/news/sag-aftra-streaming-bonus-...
If they successfully steer you towards Netflix produced content, you're less sensitive to what happens to the licensed content.
On one of the podcasts that I listen to, which has given me many great recommends, one of the hosts has given up watching content until it hits three or four seasons because of exactly this.
https://medium.com/@danial.a/how-netflix-used-data-to-create...
I suspect they just push what they want you to watch, like their own content. Seems that way to me at least, based on their quite shitty "recommendations"