Streaming’s outlook: The possibility of a strike comes at a challenging time for streaming services, which are feeling pressure from investors to reverse shrinking revenues and subscriptions by cutting spending.
- The streaming market’s saturation has led to slower growth, which in turn has affected stock values, forcing companies to seek expensive mergers, pursue new revenue sources, reduce original content spending, and more.
- A strike or new contract that results in significantly higher writer pay could make it more difficult for streaming services to pursue long-term growth goals.
- That means things like Netflix’s attempt to build its own ad tech system, Warner Bros. Discovery’s debt payments, potential acquisitions, and the broader industry’s push into markets like India would be slowed both by greater expenditures and an inability to produce new content without writers.
Our take: 2021’s canceled stage employee strike should give WGA members hope that a reasonable contract can be reached between streamers and writers, but platforms scared of shrinking revenues may play hardball, which could result in conflict.
- A strike poses virtually no risk of killing multibillion-dollar streaming behemoths, but a loud, public conflict and higher spending on a new contract would only further disappoint investors.