Thanks to the writers’ and actors’ strike, Netflix now has cash to spend.
The company said it will spend less this year on content it “originally anticipated” due to the WGA and SAG-AFTRA strikes, as well as the “timing of production launches.”
As such, the company projects free cash flow of at least $5 billion in 2023, significantly higher than the previous estimate of $3.5 billion. This comes after the company generated $1.3 billion in the second quarter, compared to breaking even a year ago.
While the streamer acknowledged that this could result in “some negative impact” on free cash flow from 2023 to 2024, it added that it plans to deliver “significantly positive” free cash flow in 2024.
This came as it added 5.9 million subscribers worldwide and the tally reached 238.3 million. By sharing passwords, subscribers crowded into the months-old $7-month plan with ads.
Those numbers are unlikely to go down well with the picket line given that one of the streamers that has become central to the fight against Hollywood has so much cash at their disposal.
There was little substantive news on Netflix’s income statements, but the company did announce its revised ratings.
In June, some big changes were made to the way streaming viewers are reported.
The streamer now reports the average number of viewers for their program as “views”, ie the hours viewed divided by the total running time. While the number of hours watched is still available, Netflix will now use this new metric for its top 10 rankings, including all-time most popular lists.
Additionally, Netflix has extended the measurement window from 28 days to 91 days to give movies and shows time to grow.
This led to an interesting upheaval in the top titles, such as Wednesday overtaking Stranger Things 4 as the most popular English language series of all time.
“We believe this new approach is more intuitive and also adapts to runtime (i.e. longer movies or series don’t get an inherent advantage). “We’ve also extended our list of all-time favorite stories from 28 days to 91 days so people can see how great stories grow over time,” it said.
The company also took a dig at some of its competitors for not offering comparable numbers (albeit with the caveat that we can only see the numbers Netflix would like to see).
“We believe that regularly sharing this engagement data will help talent and the broader industry understand what success looks like on Netflix – and we hope that over time other streamers will become more transparent about engagement with their services,” it said it in its results.