It’s another earnings quarter and another new strike knocking on the door, and Netflix co-CEO Ted Sarandos is responding to the reality of SAG-AFTRA and WGA on strike as he cuts a fine figure for Wall Street.
During Netflix’s second-quarter earnings interview on Wednesday, Sarandos deflected on a couple of questions from Wall Street analyst Jessica Reif Ehrlich about how much this year’s content spending would be deferred into next year, as well as at what point the contents may run out. Instead, Sarandos opened the earnings interview by saying both strikes “aren’t an outcome we wanted.” She also shared a personal story saying that his father was a union electrician who she remembers going on strike.
“We make deals all the time, we’re constantly at the negotiating table, with writers, directors, actors, producers, and we were very much hoping to reach an agreement by now.” Sarandos said. “It takes a huge toll on your family, financially and emotionally. So you should know that nobody here, nobody within the AMPTP, and I’m sure nobody at SAG or nobody at the WGA has taken this lightly. But we have a lot of work to do. There are a handful of tricky problems. We are extremely committed to getting an agreement as soon as possible, one that is fair and allows the industry and all of its members to move forward into the future.”
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When asked when content might sell out for Netflix, Sarandos said the company listed some of its upcoming shows and movies in the investor note and referred to his remarks in its fourth-quarter earnings call on Netflix production. “all kinds of content”.
“That’s not the point. We have to end this strike so that we can all move forward” Sarandos said.
During the latest earnings call, Sarandos said Netflix was “better than most” prepared in the event of a writers’ strike.
“If there is one, we have a large base of upcoming shows and movies from around the world, so we can probably serve our members better than most,” he said in April. “We really don’t want that to happen, but we have to make plans for the worst, so we have a pretty solid slate of releases that will take us a long way. But just to be clear, we are at the table and we will try to arrive at a fair solution so that there is no strike.”
So far he’s been right. Netflix’s earnings this quarter were strong, with the company adding nearly 6 million global subscribers in the quarter thanks to the launch of “paid sharing,” bringing Netflix’s global subscribers to 238.39 million. Its share price is also up sharply from the previous quarter and could soon hit $500, and as a streamer that plans its content well in advance, Netflix got away with the nearly three-month writers’ strike, while others Linear TV networks have already felt the pinch.
But an actors’ strike on top of a writers’ strike is a different animal, and even Netflix will start sweating if it can’t deliver some of its biggest shows fans want to see in time. The writers’ strike has already halted production on “Stranger Things 5” and the actors’ strike has now halted any remaining American productions, as well as production overseas. The actors’ strike is also suspending Emmy campaigns and putting a damper on fall film festivals that Netflix may be relying on to fuel its Oscar campaigns.
Netflix, despite beating earnings expectations and adding nearly six million global subscribers, fell short of revenue benchmarks this quarter, topping $8.187 billion in revenue from April through June, with quarterly earnings on a per-year basis. share at $3.29. Overall net income was $1.488 billion for the quarter, and Netflix expects an even higher profit, $1.58 billion, for the next quarter.
