When Hollywood gets the sniffles, its lawyers can feel like they’re suffering a major bout of pneumonia. So there was good reason for the collective exhale by many in the industry in recent days as the Writer’s Guild of America—the union to which all working screenwriters are required to belong—reached a contract deal with the studios. A potentially punishing strike was avoided. Productions continue. The disputing parties didn’t get all each wanted.
But did the entertainment business just whistle past some current economic concerns to kick down the path some big, longer-term issues? As audiences confront increasing programming choices and their entertainment habits transform, have writers (long a vulnerable party in the Hollywood system) served as a harbinger of how industry talent—whether scribes, directors, producers, actors, or lawyers—keeps struggling and may be losing ever more to the tides of technology?
Worries, with reason, about a strike
The last writers strike (2007-08) lasted 100 days and cost the Los Angeles economy nearly $2.5 billion. A similar strike this year would have been more costly, affecting a boat load of programming: As Entertainment Weekly pointed out in its May issue, there were in 2016 455 scripted series compared with 189 in 2007.
Writers, this go around, returned to negotiating over a key issue from the 2007-08 strike—representation in new media aka streaming services.
Indeed, 15% of guild writers are now employed by streaming services, and because of the last strike, are guaranteed minimum wage or better. This time, the guild also put additional pressure on negotiators by reaching out directly to advertisers, explaining that a strike could lead to delays in the fall season and would potentially harm ratings. The studios had reason to be concerned. In June, they’re scheduled to present their slates to advertisers. Those meetings would have been rendered useless by a strike because networks wouldn’t have been able to guarantee full seasons of scripted 2017-18 shows.
A changing business
But since the 2007-08 strike, the TV business has changed dramatically. Network shows before typically aired 22 to 24 episodes in a season. Today, the standard is for not more than 10 to 13 episodes per season. Because writers get paid per episode, this cut in numbers has resulted in a major loss of wages.
The writers also had issues with their expected exclusivity. The shorter, streaming season doesn’t always mean shorter production times, and writers were expected to work exclusively on a contract show for the entire production time. That also meant less money. So even though the need for TV writers has increased, their average wages dropped 21 percent between 2010-15.
In their latest negotiations, the guild redefined terms so writers were paid for 2.4 weeks of work for each episode, with any labor beyond that, as a union leader explained, requiring additional payment for hundreds of writer-producers. In its May 2 memo to members, the guild said it negotiated a 15 percent increase in pay TV residuals over the three-year span of the contract, a roughly $15 million raise in high-budget subscription video-on-demand residuals and, for the first time, residuals for comedy and variety writers in pay TV.
Health care coverage
Over the course of the new three-year deal, the guild members will get nearly $130 million from residuals, payments for shorter TV seasons, and, importantly, health care. The guild’s employer-funded health plan was a sticking point because of ever-increasing medical costs and rising uncertainty as GOP officials in Washington continue to seek the repeal and replacement of the Affordable Care Act, aka Obamacare.
While the WGA sought a 1.5% increase in the employer contribution to the guild health plan, the studios wanted cuts in their contributions totaling $10 million and increased contributions from the writers. The writers stuck to their guns and what they had won in previous negotiations, saying solid health coverage was critical to them because they can go without work for long periods. They said health insurance also was to give members stability and was a key benefit of guild membership.
After averting a walkout that would have heavily disrupted TV and movie production nationwide, creating hardship in an industry that employs a quarter million Angelenos, writer-producers remain the lone TV industry people who do not receive additional pay for additional time worked. Writers believe that they are responsible for the largest element of shows’ success—the ideas, characters, and scripts. But even with their latest negotiations, their income is dropping and they aren’t getting a major slice of the money pouring into CBS, Comcast-NBC, Disney, Fox, Time Warner and Viacom, a reported $51 billion in operating profits and almost $28 billion in net income in 2016.
With the strike averted, guild members will keep churning out material for daytime soap operas, late-night talk shows, and other contemporaneous shows like Saturday Night Live. TV productions and movie can keep to their intricate scheduling, especially juggling facilities and directing and acting talent. And most network shows will begin production in July, with nary a hitch.
The industry also will keep cranking out more unscripted and reality-based productions—works that may not be the powerhouses that they once were but that still throw off big profits and don’t require major commitments of writing talent. Streaming outlets also are showing more interest in unscripteds, a further potential worry for writers as they consider their current contract gains.
Although a strike might have forced viewers to turn even more to streaming and premium cable outlets for programming, and it might even have left them slow to return to network shows, their robust choices are only growing, and many of these services also can rely on material that networks can’t—big libraries of existing content. Writers already may need to re-think their strategy for their possible next labor action because streamers might create conditions with their archives where the scribes wouldn’t be missed for months. Could writers hold out that long? Could they appeal for their importance to audiences enraptured with endless seasons of Real Housewives?
Meantime, negotiations for a SAG-AFTRA contract will get under way this month, and actors will have their turn at the table soon, too. Writers lack the visibility that actors possess. They can’t shut down production immediately as producers and directors can. But who creates material, gets it together and to audiences with the greatest convenience—as an internet service provider’s wall-to-wall celebrity commercial emphasizes, customers now want what they want 24/7, delivered on a vast array of devices, and anywhere on the planet.
Hollywood has chased technological change throughout its history. But its talent, entertainment lawyers not excepted, are seeing Silicon Valley—Netflix, Amazon, YouTube, Hulu, Facebook et al—disrupting long-established ways. Netflix alone has 100 million or more subscribers and not only is spending $6 billion on original content, it is capturing sufficient industry buzz that Hollywood has been forced to rethink its distribution models and release schedules. Executives may declare, as one just did, “Netflix my ass.”
But with networks yielding TV’s big prizes to streamers like Netflix and Amazon and cable-power HBO (which was an early adopter of streaming technology) and with the movie industry sailing into its blockbuster summer with sequels and sagging franchises, maybe the industry’s writers can use their temporary peace and a little prosperity to find creative inspiration for tomorrow and beyond. The lawyers who will protect those brilliant ideas in ever-changing markets, with daunting technologies, can only hope so.