Netflix’s Unbreakable Production Pipeline Keeps Strike at Bay

“Netflix Unaffected by Hollywood Strikes as Foreign-Led Productions Provide Shield, Analysts Say”

Netflix, which is set to report its earnings on Wednesday, appears to be shielded from the ongoing Hollywood strikes due to its foreign-led productions, according to analysts. As striking actors and writers picket outside film and television studios, forcing productions to halt, Netflix seems to be unaffected as a significant portion of its content comes from countries not involved in the strike. The streaming giant’s international production capabilities have been praised as a “huge differentiator” and have proven successful during the pandemic when subscribers turned to shows created outside the US. This includes popular titles like the French mystery thriller Lupin and the comedy Call My Agent! Analysts believe that Netflix’s lack of reliance on struggling parts of the entertainment industry, such as theatrical and broadcast television, contributes to its resilience.

In addition to its international production capabilities, Netflix’s recent crackdown on password sharing has also contributed to its success. The company’s move to enforce additional fees for users who share accounts outside of the same household has resulted in a surge of new subscribers. Research firm Antenna reported that this initiative drove the four biggest days of user additions in the US in over four years. Experts estimate that of the 100 million households sharing passwords, around 50% could be prompted to create their own accounts as a result of Netflix’s crackdown.

Despite being in what is typically a weak quarter due to school holidays, Netflix is expected to have added a net 1.77 million subscribers, according to Refinitiv. This is a significant improvement compared to the same period last year when the company lost nearly a million subscribers. Furthermore, Netflix’s ad-supported tier, launched two quarters ago, is predicted to have attracted 2.7 million subscribers in the April-June period. Analysts believe that the crackdown on password sharing will drive more users to the ad tier, leading to increased revenue from advertising. Macquarie analysts anticipate that Netflix could generate $770 million in ad revenue by the end of 2023.

Overall, Netflix’s ability to continue producing content despite the Hollywood strikes and its successful efforts to combat password sharing have positioned the streaming giant for continued growth. With its international production capabilities and diverse catalog, Netflix remains a dominant force in the streaming TV era, even amidst increasing competition from platforms like Disney+ and Amazon Prime Video.