Despite the writers’ and actors’ strikes in Hollywood, streaming industry pioneer Netflix (NFLX.O) demonstrated resiliency by adding more customers in a quarter than in the previous three years, driving its shares up 14.5% on Thursday.
Netflix gained 247 million members in the third quarter, an increase of over 9 million over the previous three months, by capitalizing on its dominance in worldwide production and the financial struggles of its media competitors.
Since the COVID-19 epidemic sparked previously unheard-of growth in early 2020, it was the biggest boost.
The price of Netflix shares increased to $396.20, putting the business on track to increase its market valuation by more than $22 billion, marking the largest one-day percentage rise in over three years.
According to Bernstein analysts, paid sharing has given Netflix access to a larger-than-expected market of potential customers. “The management deserves an Emmy for managing investor expectations,” the analysts stated.
The effects of the industry’s months-long labor stoppage, which started in May with a strike by Hollywood’s writers, will be evident in the results from media competitors, including Walt Disney (DIS.N), Paramount Global (PARA.O), and Warner Bros Discovery (WBD.O).
The Writers Guild of America settled last month, but the actors on strike in July are still not back at work.
While competitor streaming services delayed releases and had fewer foreign-language programming than Netflix, which could create in more than 50 nations and languages, U.S. broadcast networks packed their autumn schedules with reruns and reality series.
According to Insider Intelligence lead analyst Ross Benes, “Netflix is better positioned than most entertainment companies in plugging programming gaps from the writers’ and actors’ strikes.”
“With original U.S. productions delayed and other T.V. and streaming companies no longer holding exclusive titles with vise grips, expect Netflix to revert to its past when many of its biggest shows were licensed,” Benes stated.
The Netflix U.S. and Japanese content teams’ live-action version of the Japanese manga series “One Piece” was the number-one program in 84 nations, surpassing even the well-liked sci-fi series “Stranger Things.”
While this is happening, one of the many television programs Netflix licensed from media rivals that are finding new audiences on Netflix is the legal drama “Suits,” which last aired on the USA Network in 2019. When it debuted on the streaming site in the summer, “Suits” broke watching records.
In a video message to investors on Wednesday, Netflix Co-CEO Ted Sarandos stated, “We can take ‘Suits,’ which had previously aired on other streaming platforms, and pop it right into the heart of the culture in a massive way.
Sarandos noticed similarities between how Netflix handled “prolonged and pretty unpredictable production interruptions” during the epidemic and how negotiations between the union for actors, performers, and big studios collapsed this week.
“These are the times that I’m glad we have such a rich and deep and broad program selection,” Sarandos stated.
Still, strike interruptions occasionally affect Netflix. Until actors start working again, American productions like the mega-hit “Stranger Things” are paused.
Because Netflix “doesn’t have the same back catalog as Disney+ to fall back on,” delays for some of its most popular episodes are “problematic,” according to Sophie Lund-Yates, chief equities analyst at Hargreaves Lansdown.