Netflix CEO Ted Sarandos Isn’t Concerned About the Writers’ Strike

Netflix (NFLX) has enough content it could survive without writers for "a long time," Ted Sarandos said.

Ted Sarandos smiles wearing a suit.
Ted Sarandos said Netflix has enough content to last for a while. Dave Benett/Getty Images

The Writers Guild of America (WGA), an 11,500-person labor union representing film and television writers, began striking today (May 2) after failing to reach a new pay agreement with the trade association that represents Netflix, Disney, Warner Bros. Discovery and other streaming platforms.

The parties had been negotiating for six weeks over pay increases for writers. The ongoing shift of content to streaming platforms has left writers working for lower wages and in worse conditions, according to the union for writers. With streaming, writers are creating fewer episodes that take more time and the same workload as traditional television, said Jason Squire, professor emeritus at the University of Southern California’s film school and host of the Movie Business podcast, in an interview with Observer. “The companies’ behavior has created a gig economy inside a union workforce,” WGA said in a release.

The Alliance of Motion Picture and Television Producers, which represents streaming platforms, is focused instead on profits as investors pressure studios to turn their billion-dollar content budgets into returns. Streaming services like Disney+ and Paramount+ aren’t yet profitable.

Netflix doesn’t want a strike, said co-CEO Ted Sarandos in a call with investors last month. But “we do have a pretty robust slate of releases to take us into a long time,” he said. “We could probably serve our members better than most.”

“Industry players have been ready for this for a long time,” Squire told Observer. They have been stockpiling scripts, acquiring projects from overseas and shifting production schedules so they can continue making content without writers. But this is also the first time streaming platforms are dealing with a writers’ strike, he said. Any strike is serious in the movie business, and it could be a big hit to advertisers, he said.

Netflix is ready for a strike. So is the WGA.

The strike is the first in 15 years for WGA. The last strike, which began in 2007, lasted 100 days. The groups couldn’t come to terms regarding royalties on DVD sales and how writers were to be compensated when their work ended up on the internet. During the strike, studios increasingly relied on reality television and hiring non-unionized workers, but some television seasons still had to be cut short. The strike came to an end when negotiators reached an agreement in February 2008. The work stoppages cost the state of California $2.1 billion, according to the Milken Institute, a California-based economic think tank.

The current strike revolves largely around new media, just as the 2007 strike did. In addition to new challenges brought by streaming, the WGA is seeking to negotiate the use of artificial intelligence in screenwriting. While large language models like Microsoft’s ChatGPT and Google’s Bard aren’t fully mature, they’ve shown promise in their abilities to produce human-like text, and they are beginning to be adopted in other writing professions like journalism. The WGA wants to prohibit screenplays, television scripts and outlines from being produced by artificial intelligence.

“The WGA is powerful,” Squire told Observer. In 2019, the guild told its writers to fire their agents in a dispute over agents’ conflict of interest at a time when some agencies also owned production companies. More than 7,000 writers cut their agents, which disrupted Hollywood until the parties reached new terms. One result was that agencies agreed to limit their ownership in production companies to 20 percent. “The writers won that,” said Squire.

“Netflix could be fine, but will they be in six months?” said Squire. “This is a central issue that could end up in a long strike. It is bad for everyone, including Netflix.” Netflix CEO Ted Sarandos Isn’t Concerned About the Writers’ Strike