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Netflix Didn't Start The Fire, But It May Have Fanned The Flames

May 23, 2023 7:35 AM ETNetflix, Inc. (NFLX)12 Comments


  • The current writer’s strike has brought Hollywood to a slowdown, and while chaos may look to be reigning supreme, it depends on who you ask.
  • The biggest difference between now and the last writer’s strike over a decade ago is the seat the streamers have at the table.
  • While Netflix itself didn’t cause the strike, a lot of its policies and approaches are at the center of the controversy leading many to call it the "Netflix Strike."
  • The issue is that Netflix’s changes to the traditional model have now largely been adopted by other streamers/studios leading to a decrease in overall earnings for creatives.
  • For now, the studios/streamers aren’t in a rush to be flexible because the strike could eventually allow them to shed unprofitable long-term deals - but that’s also a dangerous long-term game.

Netflix Headquarters


The revolution was televised.

Well actually it was streamed - and while you may have thought the shockwaves had passed, they're still causing damage.

As you may be aware the entertainment industry is reeling at the moment as the

This article was written by

A long time entertainment industry professional, I have worked with a number of top Hollywood studios and networks. With over a decade in the field I use my in-depth knowledge of film and television to inform potential investors about the viability of the many upcoming projects in the industry. Questions? E-mail me at TheEntertainmentOracle[at]gmail.com.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (12)

Fundamentally, linear TV over-earned, so did the creatives in that era. Most cable subscribers watch less than 10% of the channels they pay for. That's why this is so painful for all legacy media companies, and the creatives with the linear business in death spiral.
We have all seen how Netflix didn't lose a beat during the pandemic and the production shutdown. They hoard at least 1 year of content without preparation (pandemic), easily more this time and international productions ain't shut down.

Most writers will run out their winter stash before Netflix feels a pinch.
La Marque profile picture
Disagree in general. Netflix doesn't own any linear channels. The studios that do seem to think that they can be like Netflix or Prime and screw their linear viewers. The last writer's strike accelerated streaming which is ending linear viewing, the cash cow and ratings engine. Netflix may need some American content; but their foreign content keeps a lot of subscribers worldwide. That's something that DIS, WBD and PARA don't have.
@La Marque NFLX has a bigger library than its competitors (owned and licensed). They have a huge international production pipeline. If all domestic productions dry up, they will have more new content than all competitors combined. I am sure they don't mind.
La Marque profile picture
@yellowpage Agreed. Right now, I'm watching "Good Morning, Veronica" and "My Holo Love". The key point is that Netflix doesn't own any linear channels. The fact that $DIS, $WBD, and $PARA show their linear shows the next day on their streamers is accelerating the demise of linear networks.
Netflix has an advantage, because there are plenty of indies who will get more of a chance ro sell their films.
nerd_rage profile picture
NFLX is definitely the source of this (which is not necessarily a criticism.)

NFLX killed linear TV (and video stores) by offering consumers a better deal but what's better for consumers is worse for business. They jumped from cable, where subscribers are forced to subsidize stuff they don't want, and can't cancel without having a huge fight with some customer service zombie, to streaming, where you can churn around to keep your costs bare bone while having access to everything, and cancel at the click of a button. You'll never even talk with a customer service zombie.

So that means a lot of money got yanked out of the ecosystem. Maybe some also went to CEO salaries; maybe some to investors (not lately tho hah). But it means less content can be supported and less need for writers et al. And more motive to find cheaper ways to produce content, like AI or cheap foreign production.
gametv profile picture
@nerd_rage i was a subscriber since 2011, just cancelled netflix for the first time. reasons?
- the move to cut sharing. this was offensive to me. i'm boycotting all greedy companies that raise inflation with price increases.
- support writers against the greedy netflix
- dont want to support woke netflix
- content on netflix doesnt reflect my values (shows like Selling Sunset are so typical of the netflix world-view)

in the past netflix was essential due to lack of options. now there is alot of content that we can buy, so it makes sense to binge and cancel.

it isnt about the money, it is about netflix having no loyalty to long term subscribers.
@gametv You meant you have been a moocher since 2011? Netflix didn't get a penny from you anyway. What does it lose?
john.fAIrplay profile picture
This illustrates the basic problem with unions. There's a tiny number of these writers who are good at what they do. The content buyers can't reward those writers with better pay unless they also reward all the terrible writers with better pay. If I were one of the better writers, I would be disgusted to be part of an organization that protects incompetence and claims low-quality work is just as valuable as high-quality work.

If I were willing to watch anything, regardless of quality, there's already enough content on NFLX alone that I could watch shows for the rest of my life and never run out of shows.
nerd_rage profile picture
@john.AI-AI-AI aka Fairplay And look at what hits the NFLX top ten, almost all garbage. The writing is so poor, why can't it be written by AI? Sure there are some shows like Severance and Succession that AI can't touch but those are maybe 5% of total viewing. Most people are perfectly happy to consume garbage.

I've run out of good shows to watch on NFLX, and I'm cancelling, but I figure that's normal from here on out. I'll keep AMZN permanently for free shipping and churn between the rest.
Alice21 profile picture
Just finished Walker : Independence on HBO. I’m good with the writers strike.
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