Netflix is ditching its plans for an in-person upfront presentation next week and switching to a virtual-only event, TheWrap has learned.
“We wanted to let you know that we have decided to move our Upfront event at the Paris Theater on Wednesday, May 17th at 5pm ET from in-person to virtual,” a message sent to advertisers on Wednesday evening read. “We look forward to sharing our progress on ads and upcoming slate with you. We’ll share more details next week.”
The streamer did not disclose the reasoning behind the abrupt change of plans.
The move comes as the Writers Guild of America is on strike for the first time since November 2007 after the group was unable to reach a deal in contract negotiations with the Alliance of Motion Picture and Television Producers. The strike involves a long list of concerns that the writers want Hollywood studios to address, from the low pay involved in writing streaming series to reining in “mini-rooms” used to skirt contractual pay practices to addressing the use of artificial intelligence.
WGA members have already picketed outside of Peacock’s NewFront presentation in New York City, Netflix’s headquarters in both New York City and Los Angeles, and Disney, Fox, Warner Bros., Paramount and Universal in Burbank, Los Angeles and Universal City.
“We respect the writers and we respect the WGA and we couldn’t be here without them. We don’t want a strike. The last time there was a strike, it was devastating to creators. It was really hard in the industry. It was painful for local economies that support production and it was very, very, very bad for fans,” Netflix co-CEO Ted Sarandos said during the company’s fiscal first quarter earnings call in April. “So if there’s a strike and we want to work really hard to make sure we could find a fair and equitable deal so we can avoid one. But if there is one, we have a large base of upcoming shows and films from around the world, we could probably serve our members better than most. And we really don’t want this to happen, but we had to make plans for the worst and so we do have a pretty robust slate of releases to take us into a long time. But just to be clear, we are at the table and we are going to try to get to an equitable solution so there isn’t a strike.”
Netflix launched a $6.99 per month Basic With Ads tier in November as it looked to reaccelerate revenue growth. The company said in its quarterly shareholder letter that engagement on the ads tier has been above initial expectations and that it’s seen “very little switching” from its standard and premium plans. It also emphasized that the ad tier’s average revenue per paid membership in the U.S. is greater than its standard plan.
In January, CFO Spencer Neumann said the company expected that advertising could one day account for 10% of Netflix’s revenue, or around $3 billion. The company did not break out figures for advertising revenue or subscribers to the ad-based tier, though it has reportedly reached 1 million users.
“Given current healthy performance and trajectory of our per-member advertising economics,
particularly in the U.S., we’re upgrading our ads experience with more streams and improved
video quality to attract a broader range of consumers,” the company added. “We believe these enhancements will make our offering even more attractive to a broader set of consumers and further strengthen engagement for existing and new subscribers to the ads plan.”
All 12 markets where the ad tier is available will offer 1080p versus 720p video quality and two concurrent streams.
Netflix’s change of plans come as NBCUniversal, Fox, Disney and Warner Bros. Discovery are all slated to hold upfront presentations in New York City next week. The companies currently plan to host both in-person and virtual presentations.
For all of TheWrap’s WGA strike coverage, click here.
