Netflix will release its second-quarter earnings on Wednesday, the first in a series of reports from the entertainment company that have been the subject of anger from striking Hollywood actors and writers.
Analysts expect Netflix to have positive news to report. There has been little resistance to company action on password sharing. New Ad Level Netflix City: Solid returns are expected in November. And despite the added competition, overall customer churn has been low.
Veteran media executive Barry Diller said, “If there’s a winner in this, and I think in terms of true value economically, I think there’s really only one winner — it’s Netflix.” “It doesn’t mean that all these other companies lose out. It just means that these other companies don’t have as good a business model.
Comcast, Warner Bros. Discovery, Paramount Global and Disney will all report earnings in the coming weeks. But the optics are particularly complicated for Netflix.
Netflix is paying the price too much vitriol Around the strike, mainly writers say that the economics of the streaming era have worsened their working conditions and hurt their overall compensation. company already satisfied Last month, angry shareholders voted to reject lucrative pay packages for the company’s top executives. A good earnings report can certainly provoke the people sitting on the dharna.
Bank of America analyst Jessica Reif Ehrlich, who will lead a question-and-answer session with top Netflix executives following the earnings announcement, said, “The guilds will be listening to every word they say and using it against them.” “The reality is, they are running a big business. Obviously I would ask them about the strike, but they also have other things going on like password sharing that have nothing to do with the strike. I don’t know how carefully they will be told or shielded because of the possible reaction from the unions.
The company has already seen some benefits from the strike. Last month, Netflix revealed it would license original HBO shows from WarnerMedia, including “Insecure,” “Band of Brothers,” “The Pacific,” “Six Feet Under” and “Ballers.”
Netflix announced Wednesday morning that it has removed its $9.99 ad-free “Basic” plan in the United States and the United Kingdom. Customers who subscribe to this plan can continue, but new customers must choose either the $6.99 ad-supported plan, or one of two ad-free options, priced at either “Standard” $15.49 for or $19.99 for “Premium”.
Unlike traditional entertainment companies, whose stock prices have seen a decline since the writers’ strike began in May, Netflix shares are up nearly 39 percent, reaching $474.80 at market close on Tuesday.
In addition to solid returns from Netflix’s new subscriber programs, the company is also expected to benefit from lower operating costs associated with production shutdowns during the writers’ strike. Notable shows such as “Big Mouth,” “Cobra Kai” and “Stranger Things” were about to begin production, but were shelved. In the case of “Stranger Things”, series creators Matt and Ross Duffer decided to stop filming because they could not continue writing on set.
“The writing doesn’t stop when the filming starts,” they wrote on Twitter in early May.