Netflix reports its second-quarter results on Wednesday, the first in a series of reports by the entertainment company that has been the target of the outrage of Hollywood’s strikers and writers.
Analysts expect Netflix to release positive news. There is little resistance to the company’s crackdown on password sharing. The new inventory Netflix introduced in November is expected to start generating solid profits. And despite increasing competition, overall churn remains low.
“If there’s a winner in this, I think there’s really only one winner when you think about it economically in terms of real value, and that’s Netflix,” said veteran media executive Barry Diller. Told. “It’s not like all the other companies lose. It just means that these other companies don’t have that great of a business model.”
Comcast, Warner Bros. Discovery, Paramount Global and Disney are all expected to announce earnings in the coming weeks. But Netflix’s optics are particularly complex.
Netflix has received a lot of scathing criticism over the strike, mostly from writers who argue that the economic climate in the streaming age is eroding working conditions and undermining overall pay. The company was already at odds with angry shareholders last month when it voted to reject high payouts to executives. A rosy earnings report certainly has the potential to infuriate those in the picket line.
“The Guild will listen to every word they say and use it against them,” said a Bank of America analyst who moderated a question-and-answer session with Netflix executives after the earnings call. Jessica Leaf Ehrlich said. “The reality is they run a big business. Of course, I ask them about strikes, but they do other things that have nothing to do with strikes, like sharing passwords. Guild.” I don’t know how cautiously they say their words or be on guard because they might react.”
The company has already benefited to some extent from the strike. Netflix reported last month that it would license original HBO shows like “Insecure,” “Band of Brothers,” “The Pacific,” “Six Feet Under,” and “Ballers” from WarnerMedia.
Netflix announced Wednesday morning that it has discontinued its $9.99 ad-free “Basic” plan in the US and UK. Consumers on the plan can continue, but new subscribers can choose between a $6.99 ad-supported plan or two ad-free options: $15.49 “Standard” or $19.99 “Premium.” There is a need to.
Unlike traditional entertainment companies whose stocks have fallen since the writers’ strike began in May, Netflix’s stock has surged about 39% to $474.80 at the market close on Tuesday.
In addition to Netflix’s new subscriber program generating solid profits, the company is also expected to book benefits from reduced operating costs related to canceled productions during the writers’ strike. Famous shows like “Big Mouth,” “Cobra Kai,” and “Stranger Things” were all scheduled to go into production, but were canceled instead. For “Stranger Things”, series creators Matt Duffer and Ross Duffer chose to stop filming because they were unable to continue writing while on set.
“I can’t stop writing when the shooting starts.” they wrote Twitter in early May.
