Large media companies are reporting stronger-than-expected profits as the strikes by Hollywood writers and actors continue. While these companies express a desire for their workers to return soon, they are currently benefiting from the work stoppages due to the absence of production expenses. Netflix, for example, announced that projected free cash flow will be approximately $1.5 billion (€1.36 billion) higher this year than originally anticipated because of the strikes. Warner Bros Discovery Inc saved $100 million (€90.67 million) in film and TV production costs in the second quarter, a figure that could reach hundreds of millions if the strikes persist until the end of the year. Walt Disney Co also expects a reduction of $3 billion (€2.72 billion) in film and TV production costs this year due to the strikes.
This financial benefit for the studios helps explain why progress towards a settlement has been slow. The studios have extensive libraries of completed films and TV shows that will generate billions of dollars in additional revenue before the long-term impact of the strikes becomes apparent. Additionally, many members of the striking Writers Guild of America and Screen Actors Guild have other jobs outside of Hollywood, which reduces the pressure on them to compromise.
The writers’ strike, which began in May, has already surpassed the duration of the union’s previous work stoppage in 2007. New film and TV production, particularly for scripted series, has nearly come to a halt as a result. The actors joined the strike in July. Meanwhile, Disney has announced plans to increase prices for its streaming customers later this year, including customers in Europe.
Disney revealed that it will raise prices for the advertising-free version of its flagship streaming service, Disney+. Starting from October 12, the monthly cost of the ad-free version will increase by 27% to $14, up from the current $11. The ad-free version of Hulu will also see a 20% increase, rising to $18. This marks the second price increase for Disney+ in less than a year and reflects the company’s efforts to make its streaming business profitable by September 2024. The lowest-priced plans, Disney+ and Hulu with ads, will remain at $8 per month. Outside of the US, Disney will introduce new standard and ad-supported tiers in select European markets and Canada, with prices starting at £4.99/€5.99 per month and $7.99 per month, respectively. Existing subscribers will continue to receive the premium tier with no ads unless they choose to switch to one of the new lower-priced plans when their subscription price increases in December.