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Since early May, writers have been picketing outside Netflix\u2019s Hollywood offices as they fight for updates to their contracts with the entertainment industry\u2019s biggest, and richest, companies. They\u2019ve been refusing to work, disrupting productions, and creating chaos for an industry already reeling from the changes wrought by the rise of streaming. Last week, actors joined them in walking away from their work.<\/p>\n
But turns out it\u2019s hard to keep Netflix down. The streaming giant told investors on Wednesday that all of those paused productions have been helping it save some money, $1.5 billion to be exact. By the end of year, the company is now expected to have $5 billion in free cash flow.<\/p>\n
The strikes don\u2019t seem to have hurt Netflix\u2019s standing with customers, either. The streamer added 5.9 million subscribers during the most recent three-month period, which ended after the writers strike had already been underway for close to two months. Even in the United States and Canada, where the effects of the strike are likely to be felt first, Netflix added nearly 1.2 million subscribers. That\u2019s more new subscribers than it\u2019s had in the region in at least a year.<\/p>\n
Netflix attributed that growth to its recent effort to crack down on password sharing, and to offering customers more price flexibility with the introduction of a cheaper ad-supported plan. Both initiatives were put into place after the company was caught off guard by a sudden slip in momentum during the first part of last year, when it lost subscribers.<\/p>\n
Before writers or actors went on strike, Netflix co-CEO Ted Sarandos<\/strong> predicted that the company would be fine if its content pipeline dried up. \u201cWe have a large base of upcoming shows and films from around the world, so we could probably serve our members better than most,\u201d he told investors<\/a> in April. And yes, the company often has shows stockpiled for months before they air, meaning that customers aren\u2019t likely to feel the effects of the production pause for some time. Netflix also relies heavily on reality programming and documentaries, which aren\u2019t affected by the strike, to round out its scripted library.<\/p>\n Even when Netflix\u2019s steady flow of new scripted shows turns into a drip, it\u2019s got thousands of hours of licensed movies and television shows that it serves up to its subscribers on demand. (NCIS<\/em><\/a>,<\/em> anyone?) To pad out that offering, Netflix recently began licensing HBO shows including Insecure<\/em> and Six Feet Under.<\/em><\/p>\n Still, Sarandos said in a video interview<\/a> on Wednesday that he \u201cvery much hoped to reach an agreement by now.\u201d The son of a union electrician added that he knows striking can take \u201can enormous toll on your family, financially and emotionally.” He didn’t go into specifics about Netflix’s role in the contract negotiations, but said, \u201cWe’ve got a lot of work to do. There are a handful of complicated issues. We’re super committed to getting to an agreement as soon as possible, one that’s equitable and one that enables the industry and everybody in it to move forward into the future.\u201d\u00a0<\/p>\n Sarandos also noted that Netflix produces a wide variety of content, including local-language fare that won’t be impacted by the strike. Still to come this year on the streamer: New seasons of The Crown<\/em>, Heartstopper<\/em>, and Virgin River<\/em>. So content procurement shouldn\u2019t be a problem. Instead, what Netflix needs to worry about most is whether the strikes eventually turn the tide of public opinion. The streamer is already the villain<\/a> for thousands of picketing writers and actors. And as LA Times<\/em> columnist Mary McNamara<\/strong> recently wrote<\/a>, it could eventually become that for the general viewing public too.<\/p>\n