Netflix, Disney and Other Major Studios Have More Cash Thanks to the Strikes

Big Hollywood studios are looking to weather the double whammy of the writers and actors strikes by raising the rates on their subscription service and relying on old or foreign content.

And as several studios and their parent companies reported stronger-than-expected earnings in the second quarter, it seems as though their strategy is working, Bloomberg reported.

Netflix said it expects its free cash flow this year to be $1.5 billion more than it had originally projected, owing to lower content spending as a result of the strikes. The streaming service added nearly 6 million subscribers in its second quarter amid a password sharing crackdown. And as the strikes put a hold on Netflix’s U.S.-based content, it has looked overseas to keep new content flowing in, directing more of its $17 billion annual content budget into expanding foreign language programming.

Warner Bros. Discovery reported more than $2 billion in cash from operating activities, thanks in part to a $100 million boost from the strikes. 

The Walt Disney Company, too, saw $1.6 billion in free cash flow in the second quarter, up from just $187 million in the same period last year. The Mouse house attributes the increase to higher operating income at Disney Parks and lower production spending. Disney also announced a 27% price hike to watch its streaming platform, Disney+, without ads, starting Oct. 12. 

And Comcast Corporation, the parent company of NBCUniversal, said it had “significant” free cash flow generation, according to CEO and Chairman Brian L. Roberts. The company reported $3.4 billion in extra cash, a 7.9% increase from $3.2 billion a year earlier, even as Peacock, its struggling streaming service, lost $651 million. Comcast’s net income jumped 25%, to $4.25 billion from $3.4 billion in the second quarter of 2022.

Production behemoth Paramount Global’s filmed production expenses dropped to $826 million from $1.2 billion a year before. Paramount CEO Bob Bakish told investors that the company has enough movies and shows to keep people watching for the next few months.

The Writers Guild of America walked out in May, and the Screen Actors’ Guild-American Federation of Television and Radio Artists joined them on the picket line in July. The strikes could cost studios and related industries upwards of $4 billion, said Kevin Klowden, chief global strategist at Milken Institute. 

The WGA and studios agreed to meet on Friday to resume negotiations, after more than 100 days of striking.