Netflix Reports Sunny Earnings Amid Hollywood Strikes
The new advertising tier that Netflix introduced in November is still a small component of the company’s business, but Netflix said it believed it would continue to grow. Membership numbers for its ad-supported tier have doubled since the first quarter.
“While we’ve made steady progress this year, we have more work to do to re-accelerate our growth,” the company wrote in its letter to shareholders. “We remain focused on: creating a steady drumbeat of must-watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members.”
Comcast, Warner Bros. Discovery, Paramount Global and Disney will all report earnings in the coming weeks. But the optics for Netflix are especially complicated. Netflix has been on the receiving end of much of the vitriol surrounding the strike, primarily from writers who say the economics of the streaming era have eroded their working conditions and hurt their overall compensation. The company already contended with angry shareholders last month, when they voted to reject lucrative pay packages for the company’s top executives.
Netflix had little to say about the strikes, beyond noting that it had lowered the overall amount of cash it was planning to spend on content this year because of “timing of production starts and the ongoing W.G.A. and SAG-AFTRA strikes,” referring to the writers’ and actors’ unions. It acknowledged that its free cash flow expectations from 2023 to 2024 could “create some lumpiness” because there was no guarantee when the production of films and series would begin again.
Some of Netflix’s productions were able to finish before the start of the actors’ strike, which began last week. Other notable series like “Big Mouth,” “Cobra Kai” and “Stranger Things” were all scheduled to be in production but were shut down because of unfinished scripts. In the case of “Stranger Things,” the creators of the series, Matt and Ross Duffer, chose to stop filming because they could not continue write while on set.
Source: The New York Times
