‘Walking Dead’ EP Says Netflix Is Treated Better Than Other Media Companies: ‘Different Rules Being Applied’

Gale Anne Hurd questions whether streaming service can ever be profitable

Netflix to account for half of SVOD subscribers in 2023
Credit: freestocks.org

Gale Anne Hurd critiqued Netflix during the final panel of the Milken Global Conference on Wednesday, arguing the streamer gets treated differently than traditional media.

“The traditional media companies could never lose the kind of money that Netflix [is], operating in the red. I think we’re seeing that there are different rules being applied,” Hurd, CEO of Valhalla Entertainment and executive producer of “The Walking Dead,” said on a panel about the future of entertainment and media.

She said the only way Netflix can ever become profitable is by driving out the rest of its competition, which is getting bigger and bigger. “It will be interesting to see whether or not Netflix is acquired, whether they partner with another company, or whether Wall Street goes, ‘At what point will you become profitable?’”

Although Netflix regularly reports strong revenue — $4.5 billion during its most recent quarter — the streaming giant has had a negative free cash flow every year since 2011. Last month, the company said it expects its operations and investments to burn up $3.5 billion in cash, about $500 million more than it expected in January.

Jeremy Zimmer, co-founder and CEO of UTA, argues that Netflix should play both sides of the table. The same way that they acquire library programming from studios, they should be selling their old shows out.

“I don’t know how many people are watching ‘House of Cards’ now,” he said, arguing it is sitting on a “digital dust bin.” “I can imagine a world where there are secondary markets for content that’s made for streamers,” he added.

Zimmer was also asked about the ongoing fight between the WGA and ATA over the practice of packaging fees, which he mostly sidestepped.

“It’s something we think is good for the agency and good for the clients,” he said, adding it’s “our way of investing” in programming they believe in. “It’s been a pretty simple and well understood and well-documented relationship for a very long time.”

Netflix’s streaming competition is about to increase rapidly over the next calendar year, with Disney, Apple, WarnerMedia and Comcast all jumping in within the next year. WarnerMedia was just acquired by AT&T, which already owned DirecTV, while Disney just closed a massive deal for 21st Century Fox film and TV assets.

But Starz COO Jeffrey Hirsh said scaling up at some point can be a hindrance, though his pay cable network has been a part of Lionsgate for the past few years. “There’s a point where you’re too big and you can’t react to the marketplace,” said Hirsh. “I do think there’s a certain point of scale that it actually becomes disruptive.”