The CEO Of Netflix Says That The Company Is Very Dedicated To Ending Hollywood Strikes:
Ted Sarandos, co-CEO of Netflix, said on Wednesday that the company was “super committed” to finding a way to end the double strike within Hollywood, in which actors and writers are on strike together for the very first time since 1960.
Analysts think that when Netflix reports its earnings tomorrow, growth in subscriptions will make people forget about the strikes within Hollywood. Because of the crackdown on sharing passwords and the launch of a cheaper ad tier, the platform is likely to see a rise in memberships.
Approximately 65,000 Hollywood Actors Join The Picket:
As of last week, about 65,000 Hollywood players had put up picket signs, stopping shows as they fought for higher pay in an industry that is changing quickly and where prices are going up.
Analysts on Wall Street are becoming more optimistic about Netflix, even though the streaming service is cracking down on users who share passwords and Hollywood stars and writers are on strike, which could make it harder to get new content this fall.
Executive Said That A lot Of Work To Do Before Deal Can Be Made:
Still, the executive stated that there was “a lot of work to do” before a deal could be made. “Let me start by being very clear about something. “We didn’t want these strikes or this strike to happen,” Sarandos said on Wednesday throughout the company’s quarterly earnings call.
Sarandos said, “You ought to understand that nobody here, nobody in the AMPTP, and I’m sure nobody at SAG or the WGA took any of this lightly.”
Netflix Is Committed To Coming To A Deal As Rapidly:
We still have a great deal of tasks to do there, though. There are a few things that are hard to figure out. We are very committed to coming to a deal as rapidly as possible that’s fair and lets the business and everyone in it move forward through the years to come.
In talks between unions for US artists and writers and TV as well as movie companies, the streaming business was a big point of contention. Over 11,500 writers have been upon strike for two months.
160,000 Artist Joined The Picket Line:
Last week, 160,000 artists joined them at the picket line, making it the first time in 60 years that both groups were on strike at the same time.
Even though Hollywood is going through a rough patch, Netflix, which is essentially the poster child for streaming, is safe from the worst of the problems.
“There are a few problems that are hard to solve. We are very determined to reach a deal as quickly as possible. One that is fair and lets the industry and everyone who works in it move ahead into the future.”
Sarandos also said that the strikes hit close to home for him because his father was an engineer in a union.
“When I was growing up, that union was a big part of our lives. I also remember that my dad went out on strike more than once. As Well As I understand that because it puts a huge financial and mental strain on your family,” he said.
Free Cash Flow For The Quarter Was $1.34 Billion:
The free cash flow for the quarter was $1.34 billion, which was a lot more than the $542 million that most people thought it would be. Netflix also raised its forecast for free cash flow for the whole year from $3.5 billion to $5 billion, saying that the Hollywood strikes had an effect.
On the call, Netflix CFO Spencer Neumann said, “We expect a positive as well as growing free cash flow trajectory over the next few years.” He also said that the strikes could cause some “near-term lumpiness.”
What’s The Deal With The Strike?
SAG-AFTRA says that there are two primary areas of debate. The stars are asking the companies to pay them more and to make it harder for them to use AI in artistic projects.
According to a paper given by SAG-AFTRA, artists want an 11% raise on their base pay this year as well as an 8% boost over the following two years.
Artist Want 11% Rise On Their Base Pay:
This is to make up for the high inflation of the previous two years. According to the paper, the companies have responded with a proposal of five percent this year as well as 7.5% in each of the next two years.
The AMPTP told the unions that its deal included “the biggest rise in minimums within 35 years.” “It makes me very upset.
We’ve talked about the forces that are changing this business along with the problems we’re having, like the COVID rebound, which is still going on and hasn’t ended yet.
Iger said this in an interview alongside David Faber on CNBC’s “Squawk Box” while at the Allen & Co. meeting in Sun Valley, Idaho. “I can see why a labor group would want to help its members get the most money and be paid fairly based on what benefit they bring to the company.
As an industry, we were able to work out a good deal alongside the Directors Guild that shows how important the directors are to this great business.
We wanted to do the exact same thing with the writers, and now we want to do the same thing with the players. There are some things they expect that are just not possible. And they add to the problems this business already has, which is, to put it bluntly, very upsetting.”
Credit Suisse also raised its price target for Netflix stock. Last week, a Credit Suisse analyst raised the price target from $331 to $370 while keeping the “neutral” rating.
Before the crackdown on sharing passwords started last year, Netflix told shareholders that it thought there were over one hundred million households.
A household is defined by Netflix as a group of individuals living under the exact same roof who use an account that doesn’t belong to an active member of their household to watch Netflix.
