As dark clouds hung overhead, hundreds of amazing screenwriters stake out along Sunset Boulevard outside the company they accuse of bringing Silicon Valley’s cutthroat economy to Hollywood: Netflix.
Among the protesters on Thursday was Eric Heisserer, whose screenwriting credits include the 2016 sci-fi film I arrive. Like his fellow forwards, Heisserer said the streaming revolution Netflix launched in 2007 made it difficult for all but the most successful writers to make a decent living.
The streaming model “guts the middle class and rewards the best,” said Heisserer. “It’s highly exploitative.”
Heisserer is one of 11,500 Writers Guild of America members who went on strike Tuesday after talks with major studios and streamers about a new three-year deal collapsed. The WGA accuses the studios of fostering a “gig economy” which could lead to screenwriting becoming “an entirely freelance profession”.
The group representing the studios in the talks rejected these claims on Thursday. “The occupation as a writer has almost nothing in common with standard ‘concert’ jobs,” said the Alliance of Motion Picture and Television Producers, a group that includes major studios like Disney, Warner Bros and Universal along with streamers Apple, Amazon and Netflix.
It was a sour start to Hollywood’s first strike in 15 years. Protesters fanned out this week across dozens of locations in Los Angeles and New York carrying signs with slogans like “We wrote the show you’re going to binge tonight” and “We write the stuff streams are made of.”
Some industry observers are expecting a long strike. There’s general agreement in Hollywood that the model for paying writers needs to be updated for the streaming age, but the WGA and the studios have opted for opposing approaches. The two sides are arguing on issues as varied as the potential role of artificial intelligence in writing scripts to the size of royalties for streaming programs.
While streaming has led to an increase in the number of programs being produced, many writers are making less money now than they used to make in the traditional television business. Streaming series are often eight to ten episodes long, much shorter than the 22 scripts of a typical season of mainstream American television, long enough to provide a writer’s work for a full year.
Another key disagreement involves the rise of the “mini room,” small groups producing scripts for shows that haven’t been greenlit. The WGA is looking for minimum numbers of staff on these teams, a proposal the AMPTP rejected as a “recruitment quota inconsistent with the creative nature of our industry.”
The strike comes as most of the mainstream entertainment groups – Disney, Warner Bros, Paramount and NBCUniversal – are facing intense pressure to cut costs after investing billions building their streaming services. Now investors are urging them to push for profitability in streaming to offset their rapidly declining traditional TV revenues.
Paramount chief executive Bob Bakish on Thursday said there was a “pretty big gap” between the two sides in the negotiations, but he downplayed the financial impact on the company. “Obviously we have plans for this,” he told analysts. “We have a lot of . . . contained in the can. With the exception of things like late nights [television]consumers won’t really notice anything for a while”.
A better deal for writers would cost media companies between $250 million and $350 million a year, according to Moody’s analyst Neil Begley, who warned some weaker media companies “could see their credit suffer” if the strike lasted for several months.
That spending could rise to $600 million a year if the Directors Guild of America and the Screen Actors Guild — whose contracts also end this summer — negotiate a better salary deal, he estimated.
However, studios may also be able to cut costs in the event of a lengthy strike by using force majeure clauses to get out of costly deals with producers or showrunners. “Some producers who got good deals in the boom era of streaming and were overpaid” could be released due to force majeure, an executive noted.
LightShed analyst Rich Greenfield said a sustained strike could even boost profits for major streamers because they wouldn’t have to incur spending on programming that hadn’t been made, similar to the impact when the pandemic halted production.
This could be especially useful for entertainment groups that carry heavy debt, such as Warner Bros. Discovery and Paramount.
A sustained strike “could lead to significantly better streaming profitability than expected,” Greenfield said. “Multibillion-dollar operating losses could be significantly better than expected.”
The longer the strike lasts, the greater the benefit for streamers able to source international shows, namely Netflix. “A sustained strike lasting more than three months should significantly benefit Netflix,” Greenfield wrote in a research report. She noticed that the Korean series Queenmaker and the Thai film Hunger both had recently made the Netflix top 10.
Using international content to fill the gaps left by the US writers’ strike is unlikely to make friends with the WGA, whose members say they’ve been changed short in the streaming age.
A common complaint is that Hollywood lacks a leader with the power to force a compromise, a role once filled by 20th-century moguls like Lew Wasserman, the powerful MCA boss who transformed the film industry.
During the pickets, some writers said they were happy to play a long time in a fight they considered “existential”.
Melissa Marlette, who was a writer for about five years into a 15-year career in Hollywood, said she recently had to take a side job in retail to supplement her income. She was willing to picket as long as it took. “They’re all broke already, so we can wait,” Marlette says.
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