The turning point has finally been reached. After years of rapid growth, increased demands, and unpredictable development and production schedules, veteran TV writers feel a burn and longing for the structure of simpler times before streaming changed everything. As striking members of the Writers Guild of America picket daily in Los Angeles and New York, the realization of how much has been lost to the unprecedented surge in episode production comes sharply into focus.
“I miss the predictability of the pilot season,” says Cindy Chupack, a veteran writer and producer who is a two-time Emmy winner for her work on “Modern Family” and “Sex and the City.” Chupack adds that these are words she never thought she would ever say or even think. And she is not alone.
Since the start of the writers’ strike on May 2nd, the unintended consequences of ramping up serial production over the past 12 years have become apparent.
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The term “Peak TV” emerged around 2015 to describe television’s never-ending appetite for original series. Now there’s one thing writers and their estranged employers can agree on: Peak TV has peaked. The talent pool is stretched beyond breaking point, as are most of Hollywood’s balance sheets. The entertainment industry as a whole cannot afford to continue producing content at the pace of recent years, as evidenced by the reported staggering financial losses and ongoing cost-cutting campaigns at Disney, Warner Bros. Discovery, Paramount Global and, to a lesser extent, Comcast.
Andrew Rae for Variety
“There are already big legacy media companies that are struggling with pretty big streaming losses,” said Rich Greenfield, media analyst at LightShed Partners. “The challenge right now is that all of these companies are shedding and downsizing. There could be no worse time to strike than now. Yes, they save some money by not producing any product in the short term, but the reality is that these are increasingly challenged companies. Linear television is not doing well,” he says.
Greenfield’s view is shared by a top literary agent who has been watching closely as spending on film and television content has been slashed across the board, even among the biggest streamers, who have remained untouched by the pains rife in traditional Hollywood .
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“Old media is in the worst position, including Disney,” says the agent. “Netflix, in the way they’ve gobbled local productions and turned them into global hits, they can survive that forever even if the WGA fails. Apple and Amazon are not content companies. One makes phones and computers, the other brings your groceries, and that will always be their bread and butter. If their content pipeline slows down, it won’t result in fewer Apple subscribers or fewer Prime subscribers.”
The solidarity SAG-AFTRA demonstrated with the WGA on picket lines has grown loud enough to dramatically impact the Emmys’ FYC season. The fear that Hollywood could suffer a double whammy has become all too real in what JD Connor, associate professor of cinematography at USC, calls the “hot working summer of 2023.” He predicts this will lead to more merger and acquisition activity at smaller companies like Lionsgate and AMC Networks.
“It’s one of those situations where once one or two of the dominoes finally fall, I expect a big wave of new consolidations and acquisitions, barring antitrust activity from the Biden administration, which we haven’t seen.” have,” says Connor, who specializes in contemporary Hollywood and studio economics.
Likewise, a former broadcast executive sees slow-growing niche streamers as having the hardest time once the strike is over: “I think people are starting to say, ‘Well, where’s the shows?’ I don’t need this, so I’m going to cancel this service.’”
As rumors circulate across Hollywood about who will survive and who will die from the writers’ strike, these companies remain silent on the radio when they believe the strike will be over — and must be over financially.
“The most surprising thing for me is that no Hollywood executive seems to stand up and say, ‘I’m going to take the lead in solving this problem,'” says analyst Greenfield. “You haven’t seen Bob Iger, David Zaslav, Shari Redstone, Ted Sarandos — no one steps up and says, ‘Let’s solve this,’ which is fascinating.”
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There is no doubt that the TV content landscape will be very different once the strike is settled. The work stoppage has created a domino effect on delayed filming schedules that will complicate the best plans of broadcasters and streamers for months, if not years. But even without the disruption to the content pipeline caused by the strike, the order volume for screenplays is expected to decline by double-digit percentages in the coming years.
According to FX Networks’ annual industry benchmark, mainstream TV channels and platforms delivered a record cumulative total of 599 scripted English-language adult television series in 2022. This compares to 182 in 2002, the year FX announced its arrival as a major player with police drama The Shield. The success of “Mad Men” and “Breaking Bad” — two popular dramas that changed the fortunes of the once sleepy movie network AMC Network — created more demand in the late 2000s from cable networks, which were making big profits at the time. In 2012, just before “streaming” became synonymous with “television,” the industry’s total number of original series hit 288, according to FX.
The biggest catalyst for content growth, however, was Netflix’s big hit in February 2013 with its $100 million two-season bet for “House of Cards,” director David Fincher and writer Beau Willimon’s edgy political thriller. With its explosive debut, the show introduced viewers to the radical new concept of binge-watching by making an entire season’s episodes available on premiere day. And that big bang moment, so quickly embraced by viewers, led to the launch of Disney+, Apple TV+, Max (and its HBO-branded predecessors), Peacock, and Paramount+. Netflix’s example also prompted Amazon to turn up the volume on Prime Video.
Ten years later, amid labor disputes and a disrupted corporate landscape, the original number for 2023 can only go down. Even Netflix is curbing overall content spending as the company begins to show steady profits after years of investing.
“With the changes in the industry, a lot has affected our livelihood and the health of this company,” says a veteran media executive, allaying the fears of younger colleagues. “We knew these changes would continue until some financial stability was achieved for all studios. And I know it’s much broader than the strike, but everything has an impact at the same time.”
Hollywood’s old guard has been forced into draconian cuts in the turbulent post-pandemic period, punctuated by the elimination of 7,000 jobs at Disney. Warner Bros. Discovery and Paramount have also made deep cuts. And they’re all pulling shows left and right from cable and streaming platforms to save money on basic spending and music licensing costs. Apple and Amazon remain outliers given their respective trillion-dollar market caps, but even the biggest wallets have their limits.
In the weeks leading up to the strike, Netflix, Disney, Warner Bros. Discovery and other mega media companies reassured their shareholders and subscribers that their content pipelines were well filled and that they were well positioned to launch TV series by the end of the year. some by the first quarter of 2024, and that a summer writers’ strike will ultimately have no impact on their bottom line.
In June, protesters gather in support of the writers’ strike at the La Brea Tar Pits in LA. Gilbert Flores for Variety
But that was before the WGA became aggressive and tactical, picketing filming to ensure that even May Day shows with finished scripts would not be able to complete production orders on schedule. Observers say the hardest blow the WGA strike can deal will come in the long run, when the cost of grappling with halted production and partially completed seasons will be huge.
The WGA’s crackdown has been accompanied by a wave of anger among rank and file SAG-AFTRA members, bringing the artists’ union to the brink of an industry-wide strike for the first time since 1980. The SAG-AFTRA complaints are further evidence that employment dynamics have changed for the worse for work in Hollywood.
For decades, episodic television piloted an assembly line on an always predictable schedule. Things would kick off in January, when each of the major networks selected about two dozen scripts to green-light pilot production. Back then, industry insiders grumbled about the rushed pace at which crucial series pilots were being produced over a three-month period leading up to the upfronts in May. Still, it was a process that imposed a timeline for production and decision-making. In hindsight, it strikes many as a level of discipline that was lacking in the Peak TV spectacle.
“It was all or nothing, but at least after a pilot season you knew where you were,” Chupack recalls. “Now you can wait so long to get the green light and you can go months and months between seasons when you get picked up.”
The focus on delivering episodes for a traditional September through May television season also dictated a production schedule that was exhausting but fulfilling. The many picket meetings that have taken place in recent weeks have reminded veteran writers of the camaraderie that develops when working on long-aired 22-episode-per-season shows. Today’s short-term and ephemeral shows seem like migrant workers who have to hop from writer’s room to writer’s room after four to eight weeks.
For companies, the macroeconomic environment, characterized by high inflation and rising interest rates, is also putting pressure on corporate leaders. In the entire industry there is no scope for investments and flyers on projects. USC’s Connor predicts that some of Hollywood’s biggest corporations will face tough tactics from big private equity investors, such as activist investor Nelson Peltz’s proxy fight, which Disney recently suppressed.
“The incentives for private equity stakeholders in so many of these companies have changed dramatically over the last 18 months due to the return of inflation and much higher interest rates,” says Connor. “Some of these investors are going to have nudges to divest things.”
Issues such as streaming viewership transparency, the future of AI in creative fields, and the amount of time writers are guaranteed to work on a show and how they get paid are key sticking points in the standoff at the WGA . Behind closed doors, leaders are grappling with the same issues and preparing for broader change before the dust settles. As writers recall the pilot season, executives and talent representatives also recognize the need for fundamental changes to correct the transition to streaming platforms.
But what that actually looks like remains unclear. First, Hollywood needs to figure out how to make real money from streaming platforms and match the money it’s currently betting on linear channels. Both are much easier said than done. Hollywood’s avalanche of upheaval is largely due to the onset of tech-savvy streamers who have never been interested in the old ways of monetizing movies and TV shows.
“There are a few things that need to be fixed first because the way these companies make money is so contradictory,” says a senior TV studio executive. “The legacy media companies have these broadcast and cable networks, the streamers aren’t quite burdened, and even in the streaming world, they all make money in different ways, and these services have a different meaning to their ecosystems.”
Joe Otterson and Cynthia Littleton contributed to this report.