Why Hollywood Writers May Strike Over Streaming
Paris Marx is joined by Anousha Sakoui to discuss the prospect of a writer’s strike later this year, what workers are fighting for, and how the move to streaming has affected working conditions and compensation in Hollywood.
Anousha Sakoui is an entertainment industry writer for the Los Angeles Times, covering topics including labor and litigation in Hollywood. She was part of the team that was a 2022 Pulitzer Prize finalist in breaking news for work covering the tragic shooting on the “Rust” film set. You can follow Anousha on Twitter at @anoushasakoui.
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- Anousha wrote about how the Writers Guild and Directors Guild are approaching upcoming negotiations with studios.
- David Robb wrote about the history of Writers Guild strikes, and why another one seems overdue.
- WGA West recently blasted Warner Discovery for reducing opportunities for content creators after its merger.
- In 2021, IATSE was poised to go on strike before reaching a last-minute deal with the studios that was accepted by members.
- A new deal will loosen some Covid protocols on film sets.
- In 2021, Apple was paying lower rates to production crews because it said its TV+ service has less than 20 million subscribers. In July 2022, it started paying the higher rate.
- In 2018, the Hollywood Reporter reflected on the 2007 writers strike after ten years.
- The 2007 writers strike helped revive Donald Trump’s flagging The Apprentice show with a spinoff, The Celebrity Apprentice.
Paris Marx: Anousha, welcome to Tech Won’t Save Us!
Anousha Sakoui: Thank you for having me.
PM: I’m very excited to chat. You wrote a piece recently about the Directors Guild and the Writers Guild concerning these upcoming negotiations that are about to happen in Hollywood, as these unions try to fight for better terms because their contracts are coming up for renewal. And there’s a whole load of topics enmeshed in these negotiations, what’s going on here. There’s a big link to the move to streaming, how popular streaming has become in recent years and what that has meant for workers in Hollywood, so I want to dig into all of this with you. But because a lot of the listeners will be more familiar with the tech industry than the entertainment industry, I wanted to start by getting some insight into what labor in Hollywood actually looks like. I was hoping you could lay the groundwork for us and tell us what are the various unions that exist in Hollywood, and who do they represent?
AS: So, Hollywood is heavily unionized, which might be a surprise to some people, but the unions are very powerful and most of the industry is represented by unions. Although, they’re still making some efforts to cover new grounds like SAG-AFTRA, which represents actors, for example, and as Hollywood’s biggest union they are moving into, say, the area of podcasting, for example.
PM: I’ll have to join up! [laughs].
AS: Then there’s the Writers Guild of America, which has a West and East faction, obviously representing writers for TV and film. They are seen as maybe the most militant of the unions because they’ve gone on strike the most in this part of the last one hundred years or so forth. Then you have the Directors Guild of America, which represents directors, but also director’s team members, so that’s assistant directors and unit production managers, who are the people who run the day-to-day productions of a film or TV program. The Directors Guild of America is interesting because compared to SAG-AFTRA, or the Writers Guild, supposedly, more of their members aren’t working members. So if you can imagine with SAG-AFTRA, maybe not all actors are working all the time, that’s one of the things that gets talked about. Then there’s IATSE, which stands for the International Alliance of Theatrical Stagehand Employees?
PM: Theatrical Stage Employees.
AS: Yes, that’s it. I always have to look it up, strangely, even though I’ve been doing this for years. That is a huge union which represents what we call below the line — basically behind-the-scenes crew members — so crafts, hairdressing and makeup, production design, script, supervisors, electricians, all sorts. Then there’s the Teamsters who have a Hollywood chapter, and there’s the Animation Guild. So there’s other smaller unions as well, but those are the main ones. IATSE is probably characterized by being the least militant of all of them. It’s one that’s really never gone on strike. You have to go back to its founding to find any walkouts on a national level — they do walk out sometimes on specific programs. And on every major TV or film production, IATSE is a signatory to their contracts, except for some low budget productions, or notably, reality shows, non-scripted productions, tend to be non-union. But the big things that you’re watching on Netflix, or you go to the movies — they tend to be union productions.
PM: That’s really interesting, and some of the names there, like the International Alliance of Stage Employees, tells you how old these unions actually are. In some cases, they’ve been around for quite a long time and have evolved as the industry has changed as new technologies have changed the way that entertainment works, and they’ve adjusted to that. Some people might look at that and say: Unionization has gone down a lot in the US and Canadian economies over the past number of decades, because I believe many, or all of these unions, also extend to Canada or have Canadian chapters. So why is the entertainment industry so heavily unionized compared to maybe other industries?
AS: So it’s a good question. If anything, they are expanding. They are growing in the areas that they’re looking at and organizing. I think part of it is that this is an industry where maybe people can take advantage a lot — like people would have you working for free on whatever project. And I think that’s part of the reason people have really needed the protection, and to create some standardization. Whether you’re an actor or writer, I think that’s part of it. I came to LA from London and it was surprising to me, I didn’t realize how heavily unionized it was. If you compare it to, say, the UK production scene it’s not as unionized; the unions there are much smaller. There is a union for film production, but it’s much smaller than here in LA. I think that’s part of the driving factor.
PM: It’s really fascinating. Just to throw a devil’s advocate question at you, so that we have it covered and then we’ll move on to talking about these negotiations a bit. Some people might think about this and say: Why do actors need a union? Why do directors need a union? They’re paid so much, what would be the response to that? It’s probably quite obvious.
AS: Well, the people who make it big in Hollywood, who are what you’d call A-list, they might get paid a lot. But even then, the biggest performers that we know, firstly, this is tiny number. Everybody else needs what they call the basic agreement, which is protection in terms of a minimum amount of pay. Also, the hours. Last year when there was the IATSE tensions, it came out how many hours the crew work — you’re talking like 14-16 hour days. The contracts also protect them from the number of hours that they have to work, actors as well, that gives them a minimum amount of what we call turnaround, which is the amount of time they can have off before they have to come back on set. I think productions are sometimes can be run by anyone, it’s not necessarily these big conglomerates, as a lot of the big studios are now. But small independent productions, where they might want to film around the clock to get stuff done on a very tight budget, so the unions provide the workers in different areas protections like that.
PM: So the final piece of this: those are the various unions that exist, but there’s also an organization that represents the various studios, the Alliance of Motion Picture and Television Producers, AMPTP, anything in particular we should know about them?
AS: So Hollywood studios — that makeup has been changing over time and we should definitely talk about that — there are two different bodies that represent them. They are trade organizations. So the AMPTP is effectively the face of the employers in a labor negotiations. It negotiates on behalf of the studios every three years, or whenever the contracts come up. They represent the biggest studios. But, more recently that’s included Netflix, Apple and Amazon and it’s quite interesting how that body effectively has evolved as you’ve gotten more participants who that they’re typically not unionized, and they don’t come from a unionized industry. Then there’s also the Motion Picture Association, which is just another sort of general trade body for Hollywood, but in negotiation for labor, it’s the MPCP.
PM: Interesting. As you mentioned there, and as we’ve discussed, as people have probably seen in the news, there has been a growing contentious relationship between the unions and between the AMPTP, these studios, because of how the nature of work in the industry has been changing as streaming has grown. But also, as some of these other issues have become something that the workers feel really needs to be dealt with. I want to go back to 2007 briefly, because you mentioned that the Writers Guild is the most activist-like of these unions, i.e., has been most likely to go on strike. 2007 was the last time they went on strike over contract negotiations to try to win certain things. One of the things that came out of that period — it’s unclear to me whether it was the Directors Guild, or the Writers Guild that actually achieved this first, or if that even matters — but was the designation of new media, which covered a lot of these digital services, including streaming services, as I understand. Can you tell us a bit about what went on in that period and why the new media designation was important to come out of those negotiations?
AS: 2007 was a pivotal time. Technology-wise there had very few pivots when you go to the creation of VHS and then DVD. But 2007 and 2008 was the year that Netflix started to produce, or distribute its content to the internet and away from DVDs. Hulu went live in 2008. At that time, writers were looking at the Internet and seeing Apple was selling movies via the internet, that you could download, and they were concerned about how they were going to get paid. There is this sort of constant shift of technology that’s happening faster than their contracts can evolve, and how the pay structure can evolve. So for years, really, they have been worried about being left behind by this technology.
2007 really became a important point in labor negotiations in Hollywood because it became a 100-day walk out. It was very painful for the local economy, and I suppose the Writers Guild led it. It was sort of like 10,000 members, and it shut down more than 60 shows, so it had a very big impact. That strike has become the big comparison for anything that has happened since — any negotiations that have happened since. But a lot was lost, as well, nearly 40,000 jobs and an estimated $2 billion lost in output through that year. If it happened again now, the industry has changed a bit, a lot of it has shifted away from Los Angeles to other hubs like Georgia and New York. That strike was critical in getting a piece of that pie — bascially, what we call streaming now — and making sure that writers and directors and actors get paid for their content and for their performances when that content plays out and streaming. Now, obviously, to this day that remains contentious, how much of that pie they’ve getting, but this was their first piece of it. It’s a pivotal strike for for that reason.
PM: Maybe it’s worth drilling down on that point for just a second because what you’re talking about here is residuals. Obviously, these workers do get paid for doing the work on this, but then there is an ongoing payment as rights continued to be sold as those movies or TV shows continued to be shown. And that is what these workers could expect that went into funding their benefits, pensions, all these sorts of things. One of the concerns as things have moved to streaming and moved online, is that there’s far less of these residuals because of how the business model has changed. Do you want to describe to us exactly what those residuals are, and how it has changed as things have gone digital?
AS: I mean, harking back to the beginning, when people think about actors or directors, they’re thinking about Steven Spielberg, and Scarlett Johansson, thinking that they’re getting millions. But for the vast majority of directors or actors, their career pay is if they get a hit, maybe they get one, and that will support them for many years through this process of residuals, which is effectively fees for the reuse of their content. It used to be that every time your TV show or film was shown on a network, you would get paid a fee. Now, the evolution of technology and streaming has muddied that — and not just streaming, but also some of the consolidation that’s happening in Hollywood. So with streaming, you don’t have the same present insight into who’s viewing your content, how many people, how many times, all that data is not easily available and there’s a battle over that.
There’s an issue now of, say, Netflix, just as an example but it really applies to all studios now. They produce and distribute the content. So there is this vertical integration that’s happened, and it’s happened at all the studios where they all now own their own streaming platforms. Where it’s like: Okay, are there arm’s length deals happening? Where the producer is selling its content to a distributor, and the people that created that content now have less insight into that deal-making. These residuals are really valuable; they’re the things that have made Jerry Seinfeld rich, for example. They were huge amounts of money when TV shows were syndicated and resold every time.
One thing that might be helpful to think about is when we talk about content, we talk about windows. We have the theatrical window, so for a movie that will be the first window, and that would be the first place where it’s shown. Then you might have a home video, and then you might have television and then DVD, for example. But today, Netflix will buy the rights for the whole world to be exclusive on their platform, so the windowing system has completely changed. You’d see there are many different factors in terms of how streaming has completely upended the economics of Hollywood. That’s a story about residuals and it’s one factor, but it tells you how things have changed completely in terms of how people get paid in Hollywood.
PM: It’s really important because, as you describe, not everyone is the Steven Spielberg’s, not everyone is the Brad Pitt’s — the people who get paid a lot to do these films. There’s also a lot of other actors or directors. As you say, the IATSE, below the line crafts people and things like that, aren’t necessarily getting massive payments, but then are dependent on residuals being there, as they’ve worked on a number of projects to be able to give them a bit more of an ongoing income, to ensure that their pensions and their benefits are funded and all these things. Then the switching to streaming and the reduction of those residuals creates a real big threat for them and their livelihoods, or the things that they thought they would be able to depend on later in life when they’re not doing so much work.
To connect to that, as you brought up earlier with the IATSE strike, or the threat of a strike in 2021, when those workers were going through their contract negotiations. So for a while there, it looked like they probably weren’t going to go on strike because they weren’t getting what they wanted from the AMPTP in these negotiations. Can you tell us a bit about what happened in that period? What this union was really looking for, and fighting for, the residuals, but other other things as well, and what actually happened there?
AS: That was fascinating year because the year before, there had been one round of negotiation. Basically, every three years, the directors negotiate, and then the year after is when IATSE negotiates. So this year when we’ll have the writers, directors, and actors renegotiating, and the next year will already be back at IATSE’s contract. In 2020, the pandemic had kicked off, and people were expecting there to be a writers strike, but that didn’t happen.
PM: Just to pick up on that, it didn’t happen because the expectation was the strike was going to happen. The contract renewal is usually around May or June, then the pandemic hits in March, so it takes all the steam out of that.
AS: Really, there would have been nothing to walk out of, effectively. It removed any threat, any ability to threaten the strike or for a strike to have any impact. So you walk into the IATSE negotiations, and it was a very different year. A lot has happened. As I said earlier, they’re seen as the least militant, least likely to strike strike, least likely to rock the boat. In some part, maybe that’s because it has a very long history. You go back to the 30s, and 40s, and it was one of its earlier formations was effectively controlled by the Chicago mafia. They were suppressing wages in exchange for kickbacks from the studios. Obviously, now that doesn’t have those links, maybe, some people think that’s the reason why they don’t rock the boat as much. It’s more to do with the fact that there are so many different crafts, so many different chapters. This year, they decided to work or together.
Also, there was a grassroots campaign through social media. Different factions, and in fact, one group in particular, called “ia_stories” (IA is short for IATSE), where people started to anonymously share what it’s like to work on a film set. It is dangerous, and it can be grueling. For decades, actually, people have talked about literally dying in their jobs, because they work these crazy long hours and then have to commute. People either die sometimes behind the wheel, commuting, or there are lots of reports of near misses, of people waking up at the wheel. It’s quite serious. It’s always good to remember that these are sets where they’ve got heavy machinery, cabling; it is dangerous. Maybe, with the influence of the pandemic, people were really exhausted. So the pandemic had an impact of, not just a moment of shutdown, but the industry got back to work very quickly.
People were working extremely hard because there was a period of catch up, so there was a confluence of not only pressure from studios — where there’s a lot to get filmed and catch up on — but also this is a freelance type of work. People were working nonstop. Instead of having breaks, they might be going from job to job to job because there was so much filming, but also because productions have become shorter, that’s also to do with streaming. People were exhausted going into this and sharing their stories. So there’s this momentum built up, I think even to a surprise to union leaders, that they were able to call for a strike authorization and got an overwhelming, almost unanimous, vote in-favor. They were going for the usual things, increased pay, but also better turnaround times. I talked a bit about this turnaround, they had what is called a “Fraturday,” which is effectively where working Friday would bleed into Saturday. You wouldn’t get home until the early hours of Saturday morning or even Saturday morning, basically, because you would wrap so late. They wanted protections to have a core amount of weekend time.
Also, as you mentioned, streaming residuals. Now, for IATSE workers, they don’t get a check like an actor or a director might. Their residuals fund their pension. To ensure that they have a stable health and pension benefits going forward, they really need a bigger piece of that pie. Obviously, as streaming has made up a bigger part of the residual’s compensation, the contribution towards their pension has gone down. It came to October, when they had this huge momentum behind them. Ultimately, they didn’t end up walking out and it left a lot of acrimony. It probably left the union the most divided it’s probably ever been, because some members wanted them to push-on and push for more, and others just wanted to get back to work.
Another sort of phenomenon that’s existing is that there’s a lot of younger members — a lot more active members than there have been in recent years. There was criticism saying: Well, maybe people didn’t really understand the process, because the typical process is that you start at the beginning and go in with certain demands. Members wanted more. So that representatives in the talks couldn’t then change up and ask for more than they actually initially went in for. That’s not typically how negotiations go. There was a bit of angst there. It was very notable, simply, because they got this almost unanimous strike authorization, even though in the end they never ended up doing it.
PM: You’ve put it really well. I remember in 2011 there were all of these stories that were going around that were being published by mainstream outlets and smaller outlets — fueled in part by that Twitter account ia_stories — and just how much more open a lot of these workers were being about the conditions in the industry and the conditions that they were facing. As things were changing in the industry, but also, as there was pressure to get things filmed again, there was concern about filming within a moment of COVID. There’s still a lot of COVID measures on a lot of film sets at the moment.
AS: That was also part of it. Film was one of the industries where people went back to work very quickly. It was because — and you could say it’s a good thing — but because the industry was able to come up with COVID protocols, which involved testing, masking, also sick pay, so protections like that, that the unions were able to agree to. But it created quite tough working conditions as well. It added to the pressure and the stress. I think one theme I’ve heard a lot over the past couple of years is that maybe part of the fun that people might have had of this job was taken away because they weren’t able to socialize on set in the same way, during lunch or whatnot. You didn’t have the same lunch experience or socializing experience on set. Sometimes, if you’re on location, you’d be shut down in your hotel. So from that perspective, it was quite tough.
PM: No, absolutely, you can completely understand and sympathize with that. I’m sure many workers have experienced that — how the pandemic has really changed the conditions of their work. Maybe that has come back a bit more toward where it was before as restrictions have lessened and stuff. As I understand, they’re still quite common in the film industry because of insurance reasons.
AS: Well, asking people to mask up, a lot of these things that the unions believe are things that have to be negotiated and bargained. So now that they have this agreement in place, if you get rid of it — and I’m sure it is slowly going away — you have to get rid of all of it. That means getting rid of things like sick pay. It’s sort of like: Okay, if you get rid of the testing, and you throw the baby out with the bathwater, is the the expression people like to use. So that’s the reason why it’s still around, is that it does offer some protections that people want. I mean, effectively, it will start to go away because it does slow down production. It has slown down production to some degree, so I’m sure eventually it will go.
PM: Maybe that’ll be part of negotiations coming up in the next few months. I do want to move on to what is going on now. As you said, this is the year that the Writers Guild, that the Directors Guild and SAG-AFTRA will be negotiating new contracts. The expectation is that those contracts are supposed to be signed around June. Unless, of course, one of these unions go to strike because they are not getting an agreement with the AMPTP — they’re not agreeing on terms or conditions. As you say, there was an expectation that this was going to happen in 2020, but because of the pandemic, obviously, it was pushed off to this year. When we look toward the next few months, what are some of the issues that are really motivating the writers, the directors and the actors? What are the things that they are looking to get out of these negotiations, recognizing that the template that was put in place before is no longer working? In part, because of what streaming has done to the industry, but I’m sure there are some other reasons there as well.
AS: So we’re at the stage where they still have to set the pattern of demands. Besides the usual pay sustainability of their pension benefit and residuals, streaming pay, they haven’t laid those out yet. I think it’s probably negotiations for the writers whose contract expires first. They maybe expect to start negotiations in March. I think the biggest thing will be streaming and compensation linked to streaming. There’s so many different elements that it affects, but one that immediately comes to mind, we haven’t mentioned so far, is that in that agreement from 2007, and every three years, it’s been improved or renegotiated. Part of that is that streaming is still considered new media, and over the past couple of years there’s been a union move to say: Well, it’s not so new anymore. Part of it being new and part of that agreement back in 2007, was to give the new media a chance to evolve. Those contracts actually have a discount, you actually get paid less for a production on streaming, then you might for a main network like CBS. It does vary, so it’s dependent on how many subscribers the streaming platform has, there are different gradations.
PM: I remember, there was a story in 2021. As the IATSE negotiations were bringing a lot of attention to some of these issues, that Apple even though it being a company with a crazy amount of money sitting in the bank. It makes insane profits — it was probably at the time still the most valuable public company in the world by market cap. It was getting these discounted rates, it was not paying the full rate, because it still fell into this category. It had so many subscribers not over a certain threshold. It was like: How does this make any sense?
AS: Obviously, a lot of the workers in Hollywood are seeing that, because these companies now make up a greater part of the AMPTP, it’s all the more relevant. This year, the big theme will be about streaming because since 2007, there have been obviously every few years a renegotiation. I interviewed the president of the WGA, Meredith Stiehm, who’s newly incoming, in 2020. She really feels like this is a very important moment, to be able to catch up. Writers have been saying for years: Are we going to get left behind, effectively, by technology? It was really fascinating when you reached out to me for this podcast because, obviously, I think about technology as being part of it, but this year, more than more recently, it’s going to be the most important.
We’ve seen such a transformation spurred, in part, by the pandemic towards how much content is now on streaming. Obviously, the pandemic did accelerate what was already happening, which was a shift away from going to the movie and having an exclusive amount of time where film was only visible in theaters. You had to go to the theaters to see it now. That was shrinking anyway, but it’s come right down and to the point that you’ve had people suing the studios over the fact that they were forcing a lot of their content straight onto streaming and bypassing the theaters because the theaters were shut down due to the pandemic. So there’s this very important lawsuit, which is Scarlett Johansson’s lawsuit against Disney, which was ultimately settled. But you’re talking about potentially, reportedly, tens of millions of dollars that she believed she was owed because her movie, “Black Widow,” went straight to streaming and didn’t go to theatrical. If you can just imagine how much one person feels that they lost out there — obviously she’s an A-list star and you’re talking about a Marvel property — but that was very contentious, and says a lot about what’s happening with the economics of Hollywood and what’s at stake in these negotiations.
PM: Absolutely, around the same time, Warner did the same thing for its whole 2021 slate. Instead of going to court like Disney did, they paid off the various directors and actors, so that they wouldn’t make too much of a fuss about it, even though some of them still did.
AS: The Wall Street Journal, I believe it was, reported a number of like $200 million as what they estimated they might have to pay out. The unions do go up against, and win arbitrations against the streamers — not just streaming companies, but companies with streaming platforms — about how much they paid. The WGA recently won an arbitration against Netflix in the summer, where they won something like $42 million in unpaid residuals for about two hundred writers. There’s a lot at stake that they’re still eking out and trying to keep on top of in terms of are writers, for example, being paid accurately.
PM: As you say, one of the things is that now you have studios owning streaming platforms, and that creates an opacity where it’s harder to judge what residuals are supposed to be paid. Especially where there’s less selling the rights, as you mentioned before, you’d have the theatrical release, then the home release, you might have pay-per-view, foreign distribution rights, all these sorts of things would create more sales, which will create more residuals and things like that. But that doesn’t really happen with streaming in the same way. When we look at writers, one of the issues that they have as well is what’s called mini-rooms, where you’re using fewer writers in order to put together these shows. As we see on streaming, the seasons of television shows are typically more like eight to ten episodes, rather than, the 20-odd we used to get for broadcast television series. What kind of impact do those sorts of things have?
AS: It’s not just this dealing and distribution platform that’s changed, but also how the content itself has changed. What writers might find now is that they are locked in. It’s true for actors — actors also have these issues about exclusivity. But they might be locked in for, say, a year to a room in which they work, which they staff up writers to work on a TV show. Because they get paid per episode, sometimes, they might only do six episodes. So they spent a huge amount of time, a year, and get paid for very few episodes. So that’s one specific issue, but in general, there are fewer episodes that are being made, but sometimes stretched out over longer periods of time. So that is generally a bit of a bugbear for writers, and it’s fine to have fewer episodes, but I think that they want to be paid more than to change the payment structure, if that’s going to be the way it is.
But also, TV has changed so much. You don’t have these long series anymore. It’s become more theatrical with a lot of TV shows, and the actual work that goes into each episode can be a lot more. You can get hour long episodes, which have extremely high production values, to the point that in some places they just consider them films, just mini-films. Then, there’s this recent phenomenon, which I’ve seen some creators want this addressed. This speaks to how things change so fast, if contract negotiations could keep up with them, is that streaming is going through a process of slimming down. It’s having very competitive moment where it’s having to retrench a little bit, which creates an even more difficult backdrop. Sometimes, you’re seeing a lot of shows and films canceled after they’re made, but never shown. It’s a new phenomenon of some of these shows, even if they’re popular, aren’t going to get more than one or two seasons, so that adds to the dynamics of the struggle for writers and performers.
PM: Absolutely, as I understand, a lot of the people who work on these shows could usually expect a raise around the third season, and that’s when Netflix, and a lot of these streamers, tend to be canceling the series and not continuing them, even if they can be quite popular. As you’ve been discussing, there are a lot of issues here for the various workers on these productions to be concerned about, to want to renegotiate, with the various studios and tech companies who are creating these shows and who own these streaming platforms. You reported recently that the Directors Guild is instead of negotiating first, has decided to let the writers go first and see what they get out of this. How significant do you think that is?
AS: Yes, to be accurate, they say that they might wait until their contract expiration, as opposed to some years where they’ve decided to go early. It’s a fascinating technical conversation, which really tells you a lot about the unions themselves. What has typically happened in recent years is that the Directors Guild has gone in much earlier than its contract expiration, which is in June, and it’s struck a deal with the AMPTP, early. Some may think that they’ll get a benefit from giving producers the assurity that going to be able to make their slate of content that year without interruption, and then maybe they give a better deal.
The Writers Guild has a different perspective. Obviously, it’s not a monolith and people within the guild have different views. I quoted someone in my story, a WGA source, who said that deadlines make deals. If you’ve covered deal-making, I’ve covered deal-making in business, that’s quite a typical approach to wait until the final hour until you have some leverage. It’s a very different negotiating approach that it seems that the WGA has. One thing that the WGA has raised recently is this thing called bargaining patterns. So for example, the DGA would go first and by agreeing a deal, there’s this expectation on the behalf of the producers that sets a benchmark for what other unions have to agree to.
My interpretation is that I don’t think the Writers Guild likes that too much. In fact, they’ve sort of said as much when they got this landmark deal with Netflix last summer over residuals, getting them to pay out more for films that had been produced. The Writers Guild said, effectively, they don’t really like this bargaining pattern where a producer might strike a deal with one union, and then it force that on another. So there hasn’t been any communication between the guilds about this. Unusually, this cycle, the Directors Guild has been very vocal, so I think they’ve been trying to communicate to their members how difficult this round of bargaining is going to be. This foreshadows what this year could could have in store in terms of strike action. In the couple of member announcements that they’ve put out, which, again, is unusual, they’re usually quite tight lipped. They’ve said that they might wait until their contract expires, which would be after the WGA’s. This would by definition mean that the Writers Guild could go first.
That could set a tone of potentially saying like: Okay, let the writers go first and see what they can achieve. But it paints this very interesting dynamic between the different unions about how these negotiations unfold, and they’re not necessarily working together, obviously, on that. It’s going to be interesting, but we don’t know what the DGA will do, But it’s a possibility that the writers could go first and they could set quite combative tone for this year. The last time the writers were first was 2007. So does that tell us that we’re necessarily going to have a strike this year? The WGA has told its members it’s too early to say whether or not they’re going to strike, and sometimes it’s done on purpose to sort of put them on the backfoot.
PM: What would you put the chances of a strike out at this point, do you think?
AS: Well, we don’t have a strike-o-meter. The hill that has to be climbed is so high, that I think it’s pretty likely, especially if the WGA goes first. But they have struck the most in the history of Hollywood, so by definition, it would mean they have the highest probability of striking of the unions. What has to be achieved is so high, especially as it comes when the streaming companies and the studios are struggling when they’re dealing with a lot of losses and they are cutting back. They’re not going to be in the mindset of wanting to give away so much, but over the past three years, the economics of Hollywood has changed, completely, and you can understand that the creators don’t want to be left behind. As well, you do have younger members coming into these unions that are more active and want more, I suppose, or want to be more activist. I think it’s going to be an interesting year.
At the same time, on the flip side, the talk of possible recession could take away anybody wanting to go on strike? People do remember that in 2007 a lot of the studios used a force majeure clause in contracts to be able to drop a lot of writers. People lost jobs, lost their livelihoods, and many left Los Angeles and left the industry, as a result of that strike. It was very painful for a lot of people, so I don’t think people are necessarily chomping at the bit to do that. I would put it at a significant risk, but every time when I look back at coverage of different strikes, there’s been so many close calls over the years since 2007. People talk a lot about striking, and I think there’s a good chance of it, but I definitely don’t think it’s a given.
PM: As you say, there are really big issues that need to be tackled, but then at the same time, the streaming companies, the studios, are facing difficulties. We saw last year with what happened with Netflix and its big share price declines, because it reported a drop in in subscribers and things like that. Also, we’re in this position, or moment, where inflation has been going up where there’s the risk of the recession, that might make people a bit apprehensive about going on strike and not having that income coming in for a while.
One piece that I wanted to pick up on that you mentioned earlier, was consolidation. We’ve obviously had these big tech companies move into the entertainment industry, Apple, Netflix, Amazon, and Amazon has recently bought MGM Studios. We also saw Disney buy Fox recently, a few years ago now. There was the recent Warner-Discovery merger, there have been other big acquisitions and mergers in recent years. What does that also mean for the workers as these studios and companies that they’re negotiating with become larger and more powerful? Does that make it more difficult to get better terms?
AS: Yes, it’s more consolidated, so there’s less competition. So that’s one big issue. It also means, have more of that issue of — some people call it — self-dealing. Some people see that as a pejorative, but effectively, what you’re trying to say is that the producer and distributor are the same entity, so you don’t have the visibility over: Well, how much is my content being valued out when a producer sells it to the distributor? What’s interesting is that the composition of what we know as studios, Hollywood Studios, has changed so much. For example, with the Warner-Discovery deal, Discovery has a lot of non-union content, it’s reality and unscripted. So I think that’s going to be quite interesting. You have Amazon, Apple, and tech companies, in general, haven’t been very open to organizing the labor movement, I think that’s fair to say. It’s going to be interesting to see how this makeup affects the negotiations this time, but it’s a very different landscape than it has been in other years.
PM: It’s definitely going to be interesting to watch what happens, and the negotiations that come of it and where it all ends up? Is there anything that we didn’t get to in this conversation that is important for the listeners to know, as all this goes on and that maybe I forgot to ask you about?
AS: No, I do think that it’s worth remembering that these are regular jobs for a part of the country. In Southern California this is just a very, very big industry. It’s not the glamorous work that people think it is. It can be grueling and dangerous and doesn’t necessarily pay very well. I mean, don’t get me wrong, when I’ve spoken to different crafts, people want all sorts of communities to be aware that this work is there, and they can be well paid. But it’s not the millionaire glamorous life that everybody assumes it is. It’s worth keeping that in mind when we’re talking about who’s actually negotiating here. I think the cutbacks that have been happening in Hollywood amongst streamers does add a very complicating dynamic.
Because at the same time, they will be under pressure in that they want to make sure that in the streaming war that’s happening — where there’s all these new streaming platforms, they’re competing for eyeballs, they’re competing for audiences — they don’t want to be without their hottest shows. They don’t want to be without their next big hit because they need that to keep people subscribed. I think that’s something that’s going to be very influential as well. Just before the holidays, going around town to different events, you talk to executives and people are talking about the risk of a strike, and already trying to think of how they’re going to manage it. For some, that means bringing productions forward so that they can complete them. For others, it might mean something else. Back in 2007, it lead to the creation of “The Apprentice,” so gave Donald Trump his big leg-up there in TV. All sorts can come from the threat of a strike.
PM: The unexpected consequences — I think you’ve explained that really well. I think it is important to emphasize that just because we see some of these people on the red carpet at the Oscars, or the Golden Globes, doesn’t mean that that’s the case for everyone who works in this industry. There’s a lot of people who just work regular jobs, working on various productions to make this all happen. It’s important to keep that in mind, especially when these negotiations are going on and workers are trying to get a better deal in order to better survive on the work they’re doing. Anousha, this has been a really fascinating conversation. Thank you so much for taking the time!
AS: Thank you for having me on.