How The Writers Strike Could Benefit Streaming Platforms – The Average Joe
Business Economy Tech Subscribe About Us

    How The Writers Strike Could Benefit Streaming Platforms

    victorlei

    May 31, 2023

    And there goes their biggest bargaining chip.

    The Hollywood Writers Strike is entering its second month — and there are little signs of a quick resolution.

    The key issues: Writer earnings, studios using generative AI (discrediting writers) and minimum employment terms.

    Reality shows, documentaries and broadcast news are still being produced — but scripted shows, including Severance, Stranger Things and Billions, have been delayed.

    • With a summer of big movie hits coming, you might not notice much difference just yet.
    • Give it a few more months, and you may question why you pay for several streaming platforms.

    Impact on streaming platforms

    The longest WGA strike took five months in 1988, and the previous one in 2007-2008 lasted three months. But here’s how this one could be different…

    • With streaming platforms in cost-cutting mode, the WGA doesn’t have as much leverage as before.
    • If negotiations drag on, studios can cancel expensive deals for shows that were signed years ago.

    It could go three ways for streaming platforms: Viewers cancel subscriptions, stay subscribed even without much new content or downgrade to ad-supported tiers.

    Why downgrading isn’t so bad

    This year, Netflix is enjoying a 33% run thanks to a hot ad-supported tier launch — hitting 5M monthly active users within six months.

    And it gets even better. In the first quarter, Netflix reported making more revenue per user on its ad-supported tier than its $15.49/mo standard tier.

    Profit is priority: Warner Bros Discovery Max is expected to hit profitability this year — joining Netflix and Hulu (majority owned by Disney). And for investors, higher profitability at the expense of slower growth may not be such a bad thing.

    Trending Posts