Netflix CFO Spencer Neumann said the video-streaming giant is anxious to see an end to ongoing labor strikes in Hollywood, saying they are “not good for the business.”
“We need to get back to work,” Neumann said during a Bank of America conference Wednesday. “That's what we're focused on…In the meantime, we're managing through.”
Neumann’s comment came in response to a question from discussion moderator Jessica Ehrlich, managing director of Bofa Securities, about how the labor situation is impacting Netflix’s content strategy and financials. During the wide-ranging talk, the finance chief also said the company’s operating margins, which peaked at 21%, are now “managing in the 18% to 20% range roughly.”
Both actors and writers are striking in Hollywood for the first time in more than 60 years, with much of the town currently in a complete standstill and speculation that work stoppage could continue for the rest of 2023, according to Hollywood Reporter.
The situation could be a major problem for Netflix in particular, given that it relies on fresh content to keep its subscriber growth strong, according to a report from Investor’s Business Daily. Still, the company may be in a position to survive the walkouts due to factors such as its deep library of programming and international productions, the report said.
In July, Netflix reported that it generated $8.2 billion in revenue during the second quarter, an increase of 3% year over year. Net income climbed to $1.48 billion up from $1.44 billion during the same period a year earlier.
“While we’ve made steady progress this year, we have more work to do to reaccelerate our growth,” the company said in a shareholder letter at the time. “We remain focused on: creating a steady drumbeat of must watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members.”
Following Wednesday’s subdued financial forecast, Netflix shares plummeted, diving by over 5%, during afternoon trading, according to Business Insider.