The Hollywood strike, now over 100 days long, has led the Association of Motion Picture and Television Producers (AMPTP) to resume negotiations with the Writers Guild of America (WGA) and Screen Actors Guild (SAG-AFTRA). This comes after tough earnings reports from major AMPTP members like Netflix and Disney, potentially causing the industry group to adopt a more cooperative stance with the striking unions.
Streaming services, which relied on their content libraries to withstand the strike, are facing a shortage of new content. This scarcity is starting to impact the streaming landscape, making it challenging for new players in the ad-supported streaming space to attract significant advertisers. Both Disney and Netflix have struggled to generate substantial revenue from their ad-supported tiers due to the lack of blockbuster content.
The strike has also affected advertising strategies. Spending on reruns surged to 79% in June, while investment in new content dropped to 21%. Advertisers seem to have limited alternatives, which explains the shift toward reruns.
While this rerun-centric strategy benefits both streaming platforms and TV networks during the strike, the absence of fresh content could drive advertisers to invest in other media formats. Despite streaming’s dominance in digital advertising, other channels like retail media and audio advertising are gaining attention due to lower costs and higher brand recall.
Streaming services charge remarkably high CPMs (cost per 1,000 views), reaching up to $55-65 for Netflix’s ad-supported tier—much higher than linear TV CPMs. Retail media and audio advertising, despite having lower CPMs, exhibit strong brand recall and sentiment, suggesting potential for growth in these formats.
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