Writers from the entertainment industry are on strike. Production companies have enjoyed years of prosperity and growing earnings, yet screenwriters do not share the same narrative. For the first time in more than a hundred days, writers and studio representatives met recently to resume negotiations.
What's going on in Hollywood?
The US entertainment industry has been frozen since the beginning of May. NBC's talk shows, Netflix's series, Disney+'s Star Wars projects, and even James Cameron's Avatar films have all been shut down.
The cause? Writers working in America are on strike. The writers are campaigning to adjust the remuneration system and the engagement structure of their profession. According to The New York Times, their action "had effectively shut down 80% of the scripted industry." Actors joined the protests on the 14th of July as a show of support.
At the heart of the crisis is what the writers' labour union, the Writers Guild of America (WGA), calls an unsustainable business model. WGA members want a better distribution of the revenue made by films and shows, mainly regarding streaming services. Money is one of the key components behind the protests, but according to the WGA, it is not the only issue. The writers feel the current system is not viable anymore and want to negotiate new terms of the collective bargaining agreement with the Alliance of Motion Picture and Television Producers (AMPTP), the industry leaders' representatives.
"These massive corporations only respond to money. They don't care about the product's quality—they are only interested in soulless cost/benefit analysis." - Anonymous TV Showrunner
Streaming services as the source of tension
The WGA recognizes compensation is a big concern and points out the shrinking duration of contracts and far fewer earnings from residuals. Residuals are long-term payments to actors and writers when movies or shows they have worked on continue to generate money after their first release. For example, writers of the animated series The Simpsons receive money whenever episodes are put on the air (first time or reruns), or when a consumer buys a recorded version of the show (DVD, VHS, Blu-ray, etc.). Needless to say, this payment has always been an issue. The system of payments has to be adjusted to ever-changing ways of making profits in the business of production and distribution.
But the writers also claim to have experienced a general malaise in their profession. They feel it has mutated into a sinking regime: declining working conditions leading to health distress, multiplying cuts neutralizing good craftsmanship, and the gradual thwarting of perspectives for the next generation of writers, stuck in a vicious circle of entry-level jobs.
The WGA says their members have to work more hours to earn less money, accept precarious positions, and consent to work with fewer staff members and resources. Some of them admit they had to agree to whatever came in recent years, fearing being excluded from the job market. They wielded tenacity, hoping the employment standards would evolve as fast as business and technology did.
Critical juncture: a fast-evolving industry and an outdated social regime.
When streaming services started flourishing at the beginning of the last decade, it instigated a demand explosion for screenwriters. The sector was in a state of euphoria, jobs emerging left and right. It was an opportunity for young writers to be fast-tracked to new positions, and long-forgotten projects to be revived. The emergence of these platforms came also with looser restrictions over offensive language and more room for experimentation. Fewer narrative constraints led to more artistic freedom. Contrary to more traditional broadcasting networks, streaming shows have never been required to structure episodes by advertisement breaks. On one hand, these changes can impact creators positively and may alleviate more groundbreaking entertainment. On the other hand, the WGA members ponder these favorable artistic changes with what they view as an industry-wide expansion of corporate abuses.
Unfair collective remuneration process in a profitable business
It is not the first time writers have gone picketing and forced the industry to shut down. Although the current and previous strikes bear specific characteristics, they share more or less the same triggers. The strikes in 1981 were about developments in markets such as home video and pay TV. This led to bigger revenue and the writers wanted a part of it. In 1988, it was because television shows were sold to foreign markets without any compensation for writers and actors. In 2007-2008, the most recent case, writers went on strike to win coverage of streaming as union work, and to get better financial revenues from digital content.
There is a likelihood of a strike if the industry is reaching a stage when significant leaps forward (i.e. new technologies and markets) generate a disjointed distribution of positive or negative outcomes. In other words, writers feel they did not get any benefits brought by the boom in streaming services and only experienced new downsides.
Adam Conover, an outspoken board member of the WGA, compares two of his work experiences; being a writer on a show for a small basic cable network, and a similar position for a streaming platform. The former earned him around $25,000 in residuals, while residuals for the latter earned him around $500. The system of residuals was created to share profit more fairly, but it was also a way for writers to make ends meet in between jobs, sometimes over months and years.
Major studios and companies from this industry amounted to significant revenues for the last twenty years. Netflix's total revenue went from approximately $36 million in 2002 to $7 billion in 2015, and $30 billion in 2021. Traditional studios are long-established corporations that evolved through various mergers and consolidations. They did not experience performances as exponential as Netflix, but they still registered massive growth. To give a better outlook on the financial state of the industry, the WGA went through the tedious work of analyzing major companies' financial reports. They made available key figures: in 2000, the total operating profits for the five biggest entertainment companies were around $5 billion. Since 2017, they earned on average $29 billion every year. As the historical front-runner in the matter of streaming, it is fair to have expected Netflix not to be hit as hard as the other large entertainment companies by the repercussions of the COVID-19 pandemic. But neither Netflix nor its competitors suffered losses that could have significantly lowered their average profits.
From the writers' perspective, the content they create is of significant value and it makes these companies undeniably profitable. They want to emphasize how residuals from streaming are far lower than what is believed to be fair, or simply compared to the network model. The main difference between streaming services and more traditional TV is the fact that the entire business of streaming is based on a simple metric: subscribers.
Instead of measuring performance like traditional media networks with metrics such as viewership, streaming services rely on a model coming from Silicon Valley and tech companies. This nuance is crucial because it means that the evaluation process depends on subscriptions and not necessarily profitability. This led streaming companies to be less transparent over other metrics and allowed them to pay workers less, as residuals became lump sums based on the number of subscribers to the service. As streaming is constantly acquiring network television's market share, the use of this system of low residual payments expanded, while the use of the traditional (and higher paid) approach declined drastically in recent years.
In his article published by the Los Angeles Times, Ethan Drogin, writer, and producer of the drama series Suits, corroborates how the subscription-based model plays down successful content. Suits broke the record of viewership for a show over seven days after Netflix made it available on its platform. From June 26 to July 2, the show amounted to 3.7 billion minutes of watch time. Drogin and the other five original writers received only $259.71 each from residuals.
Thriving careers fading into a gig economy
The technology and business shift not only hurt the collective remuneration process but also created new frames of reference for professional perspectives. Associate professor at Georgia State University Kate Fortmueller denotes the current strike "marks a return to the more fundamental concerns about working conditions – and existential worries about the industry's future."
At the center of it all is the increasing practice of "mini-rooms"; a term used to describe the shrunken version of the regular writers' room. Usually, these rooms would be staffed with seven or eight writers. They would brainstorm ideas, structure shows, or write movie dialogues. Essentially, writers' rooms are the backbone of the industry, where everything starts regarding content creation.
The changes induced by streaming technologies incentivized studios to hire fewer writers and ask for inherently the same amount of work. Compared to an average of 20 episodes a season for a show on network television, streaming studios started ordering shorter seasons, with usually six or eight episodes. Arguably, it helped creators make storytelling more organic and focused because narration would be less constrained by a standard order of 20 episodes. Despite no apparent changes in terms of workload, season lengths abridged and the duration of writers' contracts, forcing them to look for multiple jobs a year.
Having shorter seasons might have allowed studios to justify that they no longer need the writers during the following stages of production, hence reducing the total costs by cutting the number of effectively paid days. Historically, writers would also work on set by providing narrative guidelines, helping the actors better understand their characters, and re-writing dialogues or scenes if necessary. Similarly, writers are no longer invited during the post-production process. They are out of the editing room, where their help is considered crucial.
"Some of the most fundamental decisions about writing are in editing or in reconceptualizing a scene because you have lost a location or because an actor is struggling with a line." David Simon, creator of The Wire.
Wages and content aside, writers, especially young ones, suffer a never-ending cycle of entry-level jobs. Staff writers, the lowest position in the writers' room, should usually move up to become story editors, then executive story editors, co-producers, and so on, to ultimately become showrunners themselves. However, because of the inescapable use of mini-rooms and the exclusion from other stages of the process, they cannot get involved on-set and secure the experience necessary to grow and climb up the career ladder. Simultaneously, mini-rooms are often used to develop and pitch shows or movies even before they are greenlit by the studios. This practice can initiate countless revisions and back and forth between writers and creative executives until the studios are satisfied. That is, if the writers are lucky enough for their show to be approved by the studios, otherwise, this becomes free work.
Silent films: no audible dialogue from the AMPTP, despite wiggle room to move
Since the beginning of the strike, the WGA tried to bring these issues to the negotiating table with the AMPTP and ask for more protections for the writers. Among other things, the demands from the writers are to get more guarantees on deal terms regarding drafts and rewriting (two-step deal), a fair increase regarding minimum payments (including residuals), a minimum staff size on every project, the interdiction to enforce writers to adapt AI content, and a clear and transparent distinction between what is considered AI content and what comes from human creation.
Until recently, the studios, through the AMPTP, did not show any significant willingness to negotiate on those issues. They refused or they stayed silent, as is shown in the online report of negotiations, with the now infamous refusals from the AMPTP and portrayed by the WGA as "Rejected our proposals. Refused to make a counter". The duration of the strike is way longer than what the studios and AMPTP expected. And now that writers have been joined by the Actors' Guild (SAG-AFTRA), studios are facing growing concerns amongst shareholders and will encounter tougher tensions. At some point, they will run out of stock for new releases; completed scripts and fully produced films and shows are finite commodities. Consumers might start to reconsider the benefits of some of their "sanctified" subscriptions. The absence of content will inevitably rhyme with the austerity of the AMPTP. By running down the clock all summer with the ambition to wear down picketers and erode the protests' momentum, the studios left room for the entire storytelling workforce to build the strongest narrative. And it's a big room.
Image: ID 284525746 © Elliott Cowand | Dreamstime.com
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