Just over a week after thousands of TV and movie writers picketed, Netflix is feeling the heat.
On Wednesday night, Netflix abruptly said it was canceling a major Manhattan showcase it was hosting for advertisers next week. Instead of an in-person event held at the legendary theater of parisleased by the streaming company, Netflix said the presentation would now be virtual.
Hours earlier, Ted Sarandos, co-CEO of Netflix, said he would not attend the PEN America Literary Gala at the Museum of Natural History on May 18, a landmark event for the literary world. He was scheduled to be honored alongside “Saturday Night Live” eminence Lorne Michaels. In a statement, Mr. Sarandos explained that he withdrew because potential demonstrations could overshadow the event.
“Given the threat of disrupting this wonderful evening, I thought it best to step down 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 underscored just how much the streaming giant has emerged as an avatar for writers’ complaints. The writers, who are represented by affiliated branches of the Writers Guild of America, have said the streaming era has eroded their working conditions and stagnated their wages despite the explosion in television production in recent years, from the which Netflix has been largely responsible for.
The WGA had been negotiating with the Motion Picture and Television Producers Alliance, which negotiates on behalf of all the major Hollywood studios, including Netflix, before the talks broke down last week. the writers left on strike on May 2. Negotiations have not resumed and Hollywood is preparing for a long work interruption.
Last week, at a summit in Los Angeles a day after the strike was called, an attendee asked union leaders which studio has been the worst for writers. Ellen Stutzman, the WGA’s chief negotiator, and David Goodman, chair of the writers’ bargaining committee, responded in unison: “Netflix.” The crowd of 1,800 writers laughed and then applauded, according to a person present at the evening who spoke on condition of anonymity because of the sensitivity of the strike.
The last time writers went on strike, in 2007, Netflix was little more than a DVD-by-mail company with a fledgling streaming service. But over the past decade, Netflix has churned out hundreds of original shows, helping usher in the streaming era and revolutionizing the entertainment industry in the process.
Initially, the creative community applauded Netflix for creating so many shows and providing so many opportunities.
The demonstrations of the past week have underscored how angry writers have become with the company. In Los Angeles, Netflix’s headquarters on Sunset Boulevard has become a focal point for striking writers. The Imagine Dragons Band organized an impromptu concert before hundreds of protesters on Tuesday. A writer pleaded on social media this week that more picketers were needed off the Universal lot, regretting that “Everyone wants to have a party on Netflix” instead.
On Wednesday, the protesters were outside the headquarters. “Ted Sarandos is my dad and I hate him,” read one sign. Another said: “I shared my Netflix password. It’s ‘PAY ME’!”
As the writers marched, veteran television writer Peter Hume attached fliers to picket signs reading “Cancel Until Contract” and “Please Cancel Netflix Until A Fair Deal Is Reached.”
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 empowered writers to grow their careers in sustainable jobs and satisfactory.
“I have 26 years of continuous service and I haven’t worked for the last four because I’m too expensive,” Mr. Hume said. “And that’s mainly because Netflix broke the model. I think they put all the money into production in the broadcast wars and took it away from the writers.”
Netflix’s decision to cancel its in-person showcase for marketers next week caught much of the entertainment and advertising industry by surprise.
The company had been scheduled to join the lineup of so-called upfronts, a decades-long tradition in which media companies host extravagant events for advertisers in mid-May to increase interest and ad revenue for their upcoming programming. .
Netflix, which introduced a lower-priced subscription offer with commercials late last year, he was scheduled to perform his first upfront on Wednesday in Midtown Manhattan. Marketers were eager to hear Netflix’s argument after a decade of operating solely as a commercial-free premium streaming service.
“The level of excitement from customers is huge because this is the great white whale,” Kelly Metz, general manager of advanced television 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 reach you could never buy, right? So it’s very exciting for them that Netflix is coming together.”
So it came as a surprise when advertisers planning to attend the presentation received a note from Netflix on Wednesday night, saying the event would be virtual.
“We look forward to sharing our progress on announcements and the upcoming list with you,” the note read. “We will 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 hosting performances 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 on Thursday that its events would continue as normal, despite the fact that the writers were planning multiple demonstrations next week.
Mr. Sarandos’s decision to withdraw from the PEN American Literary Gala will not disrupt that event either. Mr. Michaels, the executive producer of “Saturday Night Live,” will continue to be honored, and Colin Jost, who co-hosts the Weekend Update on “Saturday Night Live,” is still scheduled to serve as the MC.
“We admire Ted Sarandos’s unique work in translating literature into on-screen artistic presentation, and his steadfast advocacy of free speech and satire,” PEN America said in a statement. “As an organization of writers, we have been closely following recent events and understand his decision.”
Writers’ pickets have successfully disrupted productions on some shows, including the Showtime series “Billions” and the Apple TV+ drama “Severance.” On Sunday, the MTV Movie & TV Awards became a pre-taped affair after the WGA announced it was picketing that event. The WGA also said Thursday it would picket the commencement address that David Zaslav, the chief executive of Warner Bros. Discovery, will give on the Boston University campus on May 21.
One of the writers’ complaints is how their residual payment, a type of royalty, has been disrupted by broadcast. Years ago, writers of network TV shows could earn residual payments every time a show was licensed, whether for syndication, overseas broadcast, or DVD sale.
But streaming services like Netflix, which traditionally don’t license their shows, have cut off those distribution arms. Instead, the services provide a fixed residual, which the writers say has effectively reduced their salary. The AMPTP, which is negotiating on behalf of the studios, said last week that it had already offered higher residual payments as part of the negotiations.
Outside Netflix headquarters in Los Angeles on Wednesday, writers on the picket line expressed dismay that the company was beginning to make money from advertising.
“If they make money doing ads, I think ads will become a bigger source of income for them,” said Christina Strain, a writer for the Netflix sci-fi show “Shadow and Bone.” “And then we’re just working for the TV network without getting paid by the network.”
Sapna Maheshwari contributed reporting.