Hollywood Faces First Blow Of Streaming Era: 'There's A Sense Of An Approaching Hurricane'

The last time there was a strike in Hollywood was 2007’s Pirates of the Caribbean: At World’s End the box office hit, American Idol was the most watched television show in the United States and David Fincher had just released the critically acclaimed Zodiac. The first Netflix original series, House of Cards, was five years away from airing. Today, 15 years later, just after recovering from the Covid-19 pandemic, the industry faces another labor dispute where the digital powerhouses reign supreme. By the looks of it, the US entertainment industry is about to take its first hit of the streaming era.

“There’s a feeling of an approaching hurricane,” says Alan Page Arriaga, who is pressuring as much as he can before the May 2 deadline for the strike to begin. “We won’t know what’s going to happen until it makes landfall,” adds the Fear the Walking Dead writer and executive producer of True Detective’s new season. The damage of a shutdown in an industry that employs 2.4 million people in the United States is catastrophic. The previous strike, which lasted 14 weeks between November 2007 and February 2008, cost the California economy $2.1 billion and affected around 37,000 jobs.

The Writers Guild of America (WGA), the union representing film and television writers, has 10,000 members. Negotiations with the studios target an additional $600 million in benefits for screenwriters. A vote on the strike action was approved by 98% of the participants. In 2017, 96% supported a strike, but a last-minute agreement was reached.

The Los Angeles office of the West Coast headquarters of the Writers Guild of America MIKE BLAKE (Portal)

“The strike goes beyond stopping writing words on a page,” said Eduardo Cisneros, a WGA member for seven years. “Because our creative work is much more than that. There will be no work on pitches for potential sales, and writers who are on a set have to stop working. There will be no scripts, no written documents. Nobody will receive anything, not even feedback. There will be no creative exchange,” said Cisneros, co-creator of the Apple TV+ comedy series Acapulco. If the strike continues, free-to-air television will be one of the hardest hit sectors as screenwriters work on a daily basis. The 2007 strike indirectly sparked a boom in unscripted television: reality shows.

The WGA has placed two priorities on the negotiating table. The first is residuals, the term used to describe the amount a member of the production—actors, writers, directors, etc.—receives every time a film airs on free-to-air television or a streaming platform. In 2020, the most recent year for which data is available, the union reported that screenwriters earned $467 million in residuals, the second-highest number on record. A third of that revenue came from television series. An on-air rerun of a hit series can net a screenwriter around $20,000. When network television was king, that income was the financial mainstay for writers. “It was very good money. When these terms were negotiated, the internet was on the sidelines. Now digital platforms have consumed television. You don’t get leftovers or starvation wages with these companies,” says Page Arriaga.

This point is one of the most problematic for the streaming platforms, which have separate and confidential agreements with different sections of the WGA. Leftovers from theatrical releases are tied to box office numbers. Those for free-to-air television are tied to viewership. But secrecy reigns supreme when it comes to streaming, as platforms jealously monitor the number of viewing hours and size of audience that a production has garnered. In order for authors to know how much they are entitled to, ratings must be provided.

“There is no transparency as to how many people are watching a show. No one is open about it, they all claim to have watched millions of minutes,” says Hugh Sterbakov, professor of screenwriting at UCLA. “Series like Netflix’s Wednesday are supposed hits watched by millions of subscribers, but on the platform’s lists you can find Grey’s Anatomy as the fourth most watched. It’s all opacity. It’s like trying to count the raindrops in a storm.”

‘Star Trek’ actress Nichelle Nichols, who died last year, demonstrated outside Paramount Studios during the 2007 strike. Damian Dovarganes (AP)

precarious employment

This lack of transparency may be an indirect result of the tug of war between the WGA and the studios. “It’s been one of the most frustrating issues for writers and an industry concern in years: the balance between clarity and privacy, transparency for fair compensation for workers, and the need for confidentiality given that privileged information is involved,” said Attorney Camron Dowlatshahi , an audiovisual expert, shares with EL PAÍS via email. “We hope that a formula can be achieved that is digestible for the entire industry.”

One of the studios’ proposals is that writers, directors and producers receive quarterly information on the number of views of their productions in the various territories and that a bonus payment is calculated on this number.

The expiring contract requires studios to pay around $30,000 for a prime-time episode of a show. Digital platforms with more than 20 million subscribers pay between $16,700 and $22,200 for a script, depending on the length of the show and the production budget. The studios, which declined to speak to EL PAÍS during the negotiations, have argued the new terms for them come at a time of great difficulty as tech and entertainment giants are cutting costs and laying off staff to grapple with the worrisome economic outlook To finish.

While the numbers may seem significant, screenwriters argue that the rapid change the industry has undergone in recent years has drastically altered the way it works. “Now the seasons are much shorter. You used to have to write 22 episodes, but now series have six, eight or ten episodes. A writer takes a job, it takes him less time and to increase his income he has to look for another job,” says Cisneros.

In this new era of the industry, digital platforms have imposed a new way of working. The traditional writer’s room has been replaced with a much smaller version, the purpose of which is to outline the structure of the story and the framework of the first few episodes. Much of this work is done months before projects get the green light and go into production. This allows a group of authors to obtain a lower rate – often the WGA minimum – and over a much shorter period of time. This process is called “mini-space”. “The union wants the streaming platforms to stop doing this or pay higher tariffs,” says Page Arriaga.