Netflix is facing the prospect of losing a large portion of its user base as the fallout from the 2023 writers' strike intensifies.
The streaming giant, which lost millions of subscribers in 2022 due to the cost of living crisis, might suffer a similar downturn in users as part of its role in the ongoing dispute between the Writers' Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP).
To try and summarize why the strike is taking place: the WGA, which represents over 20,000 writers in the entertainment industry (per the US Department of Labor), has been trying to negotiate better working conditions with the AMPTP. The reason? WGA members are concerned that the alarming rise in artificial intelligence (AI), such as ChatGPT and Bard, might replace them in the industry as studios potentially look to utilize AI as a cheaper labor source. WGA members are also calling for a better pay deal from studios – especially those who run the world's best streaming services, such as Netflix and Prime Video – who continue to compensate writers with low wages despite inflated prices.
The AMPTP, which represents the world's most renowned movie and TV studios, is refusing to play ball with the WGA. Subsequently, the WGA – which represents people who work on films, TV shows, podcasts, documentaries, news outlets, and more – held a vote over strike action in mid-April, with 97.5% of its members (per Gizmodo) voting to walk out. The strike began at 12:01 AM PT on May 2 and will last until the AMPTP and WGA can agree on a new deal.
So, how does Netflix factor into all of this? It all started on April 18, with co-CEO Ted Sarandos telling reporters (via Deadline) that studios "don't want" a strike to happen. However, Sarandos also expressed confidence in Netflix being able to ride out any perceived strike (at the time, anyway), saying: "If there is one, we have a large base of upcoming shows and films from around the world. We can probably serve our members better than most."
Understandably, Sarandos' comments weren't received well by WGA members and those standing in solidarity with them. Now, a rumor, which suggests Netflix had a big role to play in the breakdown in talks between the WGA and AMPTP, has only added fuel to the fire.
Speaking on the latest episode of John Rocha's The Hot Mic podcast, industry insider Jeff Sneider claimed that the wider industry is blaming Netflix for the writers' strike. "Apparently there’s a rumor going around on tracking boards and things like that – they blame the whole thing on Netflix," Sneider said. "And… like the studios are actually ready to make a deal. It’s Netflix that’s refusing to make a deal because they don’t wanna have to… show transparency for the streaming numbers. That’s, you know, a big part of it."
The immediate fear of AI isn’t that us writers will have our work replaced by artificially generated content. It’s that we will be underpaid to rewrite that trash into something we could have done better from the start. This is what the WGA is opposing and the studios want.May 2, 2023
Sneider was quick to claim that he's unsure about the story's validity – his source wasn't 100% sure, either – but the story has quickly grown legs across the entertainment sector. As a result, WGA members and more general Netflix users have begun to call on those subscribed to the streaming platform to cancel their subscriptions. That way, Netflix will be hit where it hurts most, i.e. across its revenue streams. Incidentally, according to Vanity Fair's Gabriel Sherman, Netflix has already suffered a 1.7% drop in its stock price since the strike began.
Tawyna Benavides Bhattacharya, who worked on Netflix's My Life With The Walter Boys, was one of the first WGA members to state they were cancelling all of their streaming subscriptions, including Netflix, until the strike was resolved. Others quickly followed suit, including Bosch writer Dylan Park-Pettiford, voice actor Janine Granda, and Tell Me Lies' scribe Meagan Oppenheimer. A quick Twitter search of the phrase "writers strike cancel" confirms many more (entertainment industry employees and Netflix users) are doing likewise.
Netflix didn’t start producing content until 2011. They’ve never truly experienced a writers strike. Amazon has made sure to keep unions out of their workforce but entered Hollywood after guilds were established… this is going to be interesting.May 2, 2023
This isn't the first time this year that Netflix has faced the prospect of losing users. During its Q1 2023 earnings call, during which Netflix announced its password sharing crackdown plan was actually happening, the streamer confirmed it had suffered a slight downturn in paying customers after rolling out the password crackdown scheme in Latin America. However, Netflix bullishly stated it expects users to reactivate their account, or even sign up for the first time, a few months later, with people worried about missing out on the service's latest big hit.
It's unclear how the Netflix writers' strike rumor will affect its subscriber base. Right now, the amount of people ending their subscriptions appears to be more of a ripple, rather than a tidal wave of cancellations. And, if Netflix is as confident as it proclaims over its forthcoming line-up of movies and TV shows, it'll likely retain the vast majority of its userbase through the ongoing strike.
The problem Netflix might have, though, is if users start getting agitated over the delayed return of its most popular shows. The likes of Stranger Things season 5, Wednesday season 2, The Night Agent season 2, Squid Game season 2, and Arcane season 2 are all in active development. The writers' strike means all WGA members (and those who support the strike) have downed tools on penning scripts for these wildly successful TV series. Incomplete scripts means principal photography on these productions can't begin, thus delaying their releases further.
The Shield put FX on the map. Mad Men put AMC on the map. House of Cards put Netflix on the map. Writers did that. Not some CEO. Know what you get when you put CEOs in creative lanes? You get Quibi.May 1, 2023
If Netflix's global user base gets tired of waiting for each of these shows to return – depending on how long the writers' strike lasts – more subscribers could start turning their backs on the streamer. If that happens, Netflix will have no choice but to return to the negotiating table alongside its fellow studios, and come to an agreement with the WGA.
Regardless of how important Netflix's role in all of this is, there's one thing we can all agree on: employees deserve to be properly compensated for their work. If WGA members don't think they're getting a fair deal, they have the right to strike until a resolution is reached. Over to you, Netflix and company.
Want to know how to cancel your Netflix subscription? Here are the reasons you should (and shouldn't) ditch it in 2023. And, if you're considering whether to leave the service, watch these nine cancelled Netflix shows before you do so.