When the most recent Hollywood strike happened – 16 years ago – the Internet had not yet transformed the television and film industry. Broadcast networks still had huge audiences and cable channels were still growing. The superhero boom had begun for movie studios and DVDs were generating $16 billion in annual sales.
Since then, rapid technological change has rocked Hollywood in ways few could have imagined. Traditional television is maintained by the viewers. Movie studios, plagued by poor ticket sales for dramas and comedies, have retreated almost entirely to franchise goggles. The DVD business is over; Netflix will ship its last little silver discs on September 29.
It’s now a streaming world. The pandemic accelerated the shift.
What hasn’t changed much? The formulas studios use to pay television and filmmakers set the stage for another strike. “Writer compensation needs to evolve for a streaming-first world,” said Rich Greenfield, a founder of the research firm LightShed Partners.
Without an unlikely last-minute resolution with studios, more than 11,000 unionized screenwriters could be heading to the picket lines in Los Angeles and New York as early as Tuesday, a move that, depending on its duration, could derail the creative assembly line. of Hollywood would gradually come to a halt. . Leaders of the Writers Guild of America have called this an “existential” moment, claiming that compensation has stagnated despite the proliferation of content in the streaming age — to the extent that even writers with substantial experience have a hard time moving forward and sometimes too much. pay their bills.
“Writers at every level and genre, whether it be feature films or TV, we are all being devalued and financially abused by the studios,” said Danny Tolli, a writer whose credits include “Roswell, New Mexico” and the Shondaland are. show “The Catch”.
“These studios make billions in profits and they spend billions on content – content that we create with our blood, sweat and tears,” continued Mr. Tolli. “But there are times when I still have to worry about how I’m going to pay my mortgage. How I will take care of my family. I have considered Uber to supplement my income.”
Studio executives have largely maintained public silence, leaving communications to the Alliance of Motion Picture and Television Producers, which negotiates on their behalf. In statements, the organization has said its goal was a “mutually beneficial deal”, which was “possible only if the guild committed to serious negotiation” and “looked for reasonable compromises”.
Privately, countless studio and streaming service executives portrayed writers as theatrical and unattainable. You can’t make a living as a TV writer? According to what standard? The company has changed; Get used to it.
By some measures, a major strike in Hollywood is long overdue. Since the 1940s, with few exceptions, strikes have shook the entertainment industry like clockwork – every seven or eight years – usually in line with the turmoil in the rapidly changing industry. The beginning of television. The emergence of cable networks.
“These things have to happen every five or ten years,” explains Clemenza, the weathered Corleone capo, in “The Godfather,” one of Hollywood’s most legendary creations, as the movie’s mobster families “go to the mattresses.” against each other . “Helps get rid of the bad blood.”
For generations, since the end of the silent movie era, Hollywood writers have complained that studios treat them as second-class citizens—that their artistic contributions are underappreciated (and undercompensated), especially when compared to those of actors and directors.
Among Hollywood workers, screenwriters have walked away the most (six times) and were responsible for the most recent strike in the entertainment industry in 2007. It was a precarious economic time – the Great Recession was underway – but “new media” was coming . Apple had started selling iPods that could play video. Disney offered $2 downloads for “Lost” episodes. Hulu was in its startup phase.
The existing contract between studios and the Writers Guild of America, which expires Tuesday at 12:01 a.m. Pacific Time, sets the minimum weekly wage for certain television writer-producers at $7,412. (Agents for veteran writers can negotiate that.) One problem, according to the guild, is the number of weeks writers work in the streaming era.
Streaming has largely eliminated the network standards of 22, 24, or even 26 episodes per season. Most streaming series are eight to twelve episodes long. As a result, the average writer-producer works nearly 40 weeks on a network show, according to guild data, but only 24 weeks on a streaming show, making it difficult to earn a steady paycheck.
Residues have also been undermined by streaming. Before streaming, writers could receive residual payments when a show was resold – in syndication, for overseas broadcast, on DVD. But global streaming services like Netflix and Amazon have cut off those distribution arms.
Instead, streaming services pay a fixed residual. Writers say there’s no way to know if those fees are fair because services hide viewer data. A new contract, guild leaders have said, should include a formula for paying residuals based on views.
Guild leaders claim it would collectively cost studios $600 million a year to give them everything they want. However, the companies are under pressure from Wall Street to cut costs. And profits for one group of entertainment workers should almost certainly be extended to others: Contracts with the Directors Guild of America and SAG-AFTRA, the actors’ union, expire on June 30.
Hollywood companies say they simply cannot afford widespread wage increases. Loaded with $45 billion in debt, Disney laid off thousands of workers in recent days, part of a campaign to cut 7,000 jobs by the end of June. Disney+ remains unprofitable, though the company has promised to change that next year. Disney is Hollywood’s largest provider of union-covered TV dramas and comedies (890 episodes for the 2021-22 season).
Warner Bros. Discovery, which is about $47 billion in debt, has already cut thousands of jobs as part of a $4 billion pullout. NBCUniversal is also tightening its belt due to cable cutting and a difficult advertising market.
These companies remain very profitable. But they haven’t delivered the kind of steady earnings growth that Wall Street rewards.
Screenwriters come into these conversations with remarkable swagger. In 2019, when film and TV writers fired their agents in a campaign over what they saw as a conflict of interest, many bureau leaders believed the guild would eventually break. That never happened: After a 22-month stalemate, the big agencies basically gave writers what they wanted.
For screenwriters, there is also a pent-up demand for pay increases, exacerbated by rising inflation. When writers had their last chance to negotiate a contract, the pandemic brought Hollywood to a standstill, and so the two parties came to a swift agreement – ”essentially kicking the can in the road” in Mr Greenfield’s words. In the negotiating cycle before that, writers focused more on supporting their generous health plan.
And writers are outraged by mixed messages from companies about their financial health.
“NBCUniversal is performing extremely well both operationally and financially,” Brian Roberts, the CEO of Comcast, which owns NBCUniversal, wrote to employees last week as the division’s chief executive was ousted.
Netflix’s co-chief executive Ted Sarandos will receive a $50.3 million pay package in 2022, a 32 percent increase from 2021, Netflix announced last week.
“A lot of people are still getting very rich off Hollywood products — just not the makers of that product,” says Matt Ember, a screenwriter whose credits include “Get Smart,” “The War With Grandpa,” and the animated “Home.” .
The result: The situation may get worse before it gets better.
“Every industry goes through course corrections,” said Laura Lewis, the founder of Rebelle Media, an entertainment production and financing company. “Perhaps this is an opportunity to adapt the models for the next phase of the entertainment business.”
“The question,” she continued, “is how much pain will we have to go through to get there.”
John Koblin reporting contributed.
