For the first time since 1960, Hollywood writers and actors have gone on a dual strike — hitting the picket lines over issues ranging from contract pay that hasn’t increased in years to the impact of streaming on the entertainment business. SAG-AFTRA, the guild representing some 160,000 TV and movie actors, approved the actors’ strike on Thursday, bringing Hollywood screeching to a halt and putting the entertainment industry in a state of limbo that might last for months.
Paradoxically, though, while streamers like Netflix are at the center of this historic standoff, Netflix is likely to remain relatively unscathed for the time being. The operative words there being “relatively,” and “for the time being.”
Executives of the streaming giant will no doubt have more to say next week, when the company reports its next quarterly performance on July 19 and is all but certain to be queried by analysts about the writers’ and actors’ strike. For now, though, there are at least two areas I can see where Netflix is not only strongly positioned to temporarily ride out a Hollywood work stoppage — but it might also even benefit from it.
For one thing, as we saw during Covid and we’ll now see during the actors’ strike, Netflix works way, way ahead of time. A new TV series or movie that debuts on the platform this week might have been worked on months or even a year ago. And, on a related note, Netflix’s massive scale also means that it can continue operating uninterrupted in markets outside the US that aren’t subject to the actors’ strike — like in Korea, where the company plans to ramp up its content spending by hundreds of millions of dollars in response to the global success of shows like Squid Game.
Furthermore, and this is the icky part of the argument in favor of Netflix being primed to do well during the strikes: Not only does the company have a huge backlog of content and the ability to keep the pipeline full outside the US, but the strikes will also effectively cut costs and thus improve Netflix’s earnings picture in the near-term.
Striking actors and writers mean the company will be paying for fewer people and fewer shows, for example, which is what’s led some of the more conspiratorially minded observers of this whole messy saga to suspect the studios might actually be embracing the strikes in the short term as a way to cleanse their balance sheets. I’m not sure I’m ready to go that far, though. That strategy feels a little like willfully pulling the temple down on yourself.
At any rate, let’s hope this gets settled as soon as possible. But don’t expect to see your favorite stars again anytime soon — either on the big screen, on TV, or promoting new work.