Just over a week after thousands of television and film writers went to work, Netflix is feeling the heat.
Late Wednesday night, Netflix abruptly said it was canceling a major Manhattan showcase it was hosting for advertisers the following week. Instead of an in-person event at the legendary Paris theater, which the streaming company rents, Netflix said the presentation would now be virtual.
Hours earlier, Netflix co-chief executive Ted Sarandos said he would not be attending the PEN America Literary Gala at the Museum of Natural History on May 18, a major event for the literary world. He would be honored alongside “Saturday Night Live” eminence Lorne Michaels. In a statement, Mr. Sarandos explained that he was withdrawing because the possible demonstrations could overshadow the event.
“Considering the threat of disrupting this great evening, I thought it best to step back so as not to distract from the important work PEN America does for writers and journalists, as well as the celebration of my friend and personal hero. Lorne Michaels,” he said. “I hope the evening is a great success.”
Netflix’s one-two punch in cancellations underlined just how much the streaming giant has emerged as an avatar for the writers’ complaints. The writers, who are represented by affiliates of the Writers Guild of America, have said the streaming era has eroded their working conditions and stagnated their wages, despite the explosion of television production in recent years, for which Netflix is largely responsible.
The WGA negotiated with the Alliance of Motion Picture and Television Producers, which negotiates on behalf of all major Hollywood studios, including Netflix, before talks broke down last week. The writers went on strike on May 2. Negotiations have not resumed and Hollywood is gearing up for a lengthy work stoppage.
Last week, at a Los Angeles summit the day after the strike was declared, a participant asked union leaders which studio was the worst for writers. Ellen Stutzman, the WGA’s chief negotiator, and David Goodman, a chair of the writers’ negotiating committee, responded in unison: “Netflix.” The crowd of 1,800 writers laughed and then applauded, according to one present that evening who spoke on condition of anonymity due to the sensitivity of the strike.
The last time the writers went on strike, in 2007, Netflix was little more than a DVD-by-mail company with an emerging streaming service. But over the past decade, Netflix has produced hundreds of original shows, ushering in the streaming era and turning the entertainment industry upside down.
Initially, Netflix was applauded by the creative community for creating so many shows and providing so many opportunities.
Demonstrations over the past week have underlined just how much writers have soured the company. In Los Angeles, Netflix’s Sunset Boulevard headquarters has become a focal point for high-profile writers. The band Imagine Dragons organized an impromptu concert in front of hundreds of protesters on Tuesday. A writer pleaded on social media this week that more pickers were needed beyond the Universal lot, regret that Everyone wants to party at Netflix.
On Wednesday, there were protesters outside the headquarters. “Ted Sarandos is my dad and I hate him,” one sign read. Another said: “I shared my Netflix password. It’s ‘PAY ME’!”
As the writers marched, veteran television writer Peter Hume posted flyers on picket boards that read “Cancel until contract” and “Cancel Netflix until a fair deal is reached.”
Mr Hume, who has worked on shows like ‘Charmed’ and ‘Flash Gordon: A Modern Space Opera’, said the streaming giant was responsible for dismantling a system that had trained writers to build their careers into sustainable, fulfilling jobs.
“I have 26 years of continuous service and I have not worked for the last four years because I am too expensive,” said Mr. Hume. “And that’s mostly because Netflix broke the model. I think they put all the money into the streaming wars into production and took it away from writers.
Netflix’s decision to cancel its in-person showcase for marketers next week has caught much of the entertainment and advertising industry off guard.
The company was slated to participate in the lineup of so-called upfronts, a decades-old tradition in which media companies host extravagant events in mid-May for advertisers to generate interest — and ad revenue — for their upcoming programming.
Netflix, which introduced a cheaper subscription offering with commercials late last year, was set to go live in Midtown Manhattan for the first time on Wednesday. Marketers were eager to hear Netflix’s pitch after a decade of operating exclusively as a premium ad-free streaming service.
“The enthusiasm from customers is huge because this is the great white whale,” Kelly Metz, the director of advanced TV at Omnicom Media Group, a media buying company, said in an interview earlier this week. “They’ve been ad-free for so long, they’ve been the range you could never buy, right? So it’s very exciting for them to get Netflix involved.”
So it came as a surprise when advertisers planning to attend the presentation received a note from Netflix late Wednesday evening saying the event would be virtual.
“We look forward to sharing our progress on advertising and upcoming slates with you,” the note read. “We’ll share a link and more details next week.”
The prospect of hundreds of protesters outside the event apparently proved too much to bear.
Other companies coming to prominence in Manhattan – including NBCUniversal (Radio City Music Hall), Disney (The Javits Center), Fox (The Manhattan Center), YouTube (David Geffen Hall at Lincoln Center), and Warner Bros. Discovery (Madison Square Garden) – said Thursday their events would continue as normal, even though writers planned multiple demonstrations next week.
Mr. Sarandos’ decision to withdraw from the PEN America Literary Gala will not disrupt that event either. mr. Michaels, the executive producer of “Saturday Night Live,” is still honored, and Colin Jost, who co-hosts Weekend Update on “Saturday Night Live,” is still slated to MC
“We admire Ted Sarandos’ unique work in translating literature into artful on-screen presentations, and his steadfast defense of free speech and satire,” PEN America said in a statement. “As a writers’ organization, we have closely followed recent events and understand his decision.”
The writers’ picket lines have successfully disrupted the productions of some shows, including the Showtime series “Billions” and the Apple TV+ drama “Severance.” On Sunday, the MTV Movie & TV Awards turned into a pre-recorded affair after the WGA announced it would pick up that event. The WGA also said on Thursday it would deliver the opening remarks that David Zaslav, the CEO of Warner Bros. Discovery, on May 21 on the Boston University campus.
One of the writers’ complaints is how their residual pay, a kind of royalty, has been disrupted by streaming. Years ago, network television program writers could get residual payments every time a program was licensed, whether for syndication, overseas broadcast, or DVD sale.
But streaming services like Netflix, which traditionally doesn’t license its programs, have cut off those distribution arms. Instead, the services provide a fixed residue, which writers say has effectively reduced their wages. The AMPTP, which negotiates on behalf of the studios, said last week it had already offered increased residual payments as part of the negotiations.
“According to WGA data, residuals reached an all-time high in 2022 — nearly 45 percent came from streaming, the lion’s share of which comes from Netflix,” a Netflix spokeswoman said.
“Regardless of a show’s success, Netflix pays residuals while our titles remain on our service,” the spokeswoman said, adding that the practice was different from what network and cable television did.
Outside Netflix’s Los Angeles headquarters on Wednesday, writers on picket lines expressed dismay that the company had begun monetizing advertising.
“If they make money from ads, I think ads will become a bigger source of income for them,” said Christina Strain, a writer on Netflix’s sci-fi show “Shadow and Bone.” “And then we just work for network television without getting any network money.”
Sapna Maheshwari reporting contributed.
