Whatever happens with the Hollywood writers’ strike that began on Tuesday, the recent golden era of American TV, which arguably began with The Sopranos, is ending for viewers as well as creators.
A big reason for that golden era was that Hollywood’s loss of interest in grown-up movies pushed actors and writers who formerly looked down on TV to move across to where the more interesting work was finding a home. Another was the advent of streaming services, which competed with existing channels by offering creators greater freedom – and more money. It was never sustainable.
Streaming services’ business models are different. For nearly a decade, Netflix depended on massive debt to build a library to protect itself when the major studios ended their licensing deals. The company has so far gotten away with it because of (now ended) low interest rates and Wall Street’s focus on subscriber numbers in valuing its shares. Newer arrivals such as Amazon, Apple, and Disney can all finance loss-making startup streaming services from their existing businesses. All of these are members of the Alliance of Motion Picture and Television Producers, along with broadcast networks, cable providers, and motion picture studios. For the purposes of the strike, they are the “enemy”.
This landscape could not be more different than that of the last writers’ strike, in 2007-2008, when DVD royalties were important and streaming was the not-yet future. Of the technology companies refusing to bargain today, only Netflix was a player in 2007 – and it was then sending out DVDs by mail.
Essentially, what is happening to Hollywood writers is what happened to songwriters when music streaming services took over the music biz: income shrinkage. In 2021, veteran screenwriter Ken Levine, gave the detail of his persistently shrinking residuals (declining royalties paid for reuse). When American Airlines included an episode he directed of Everyone Loves Raymond in its transcontinental in-flight package for six months, his take from the thousands of airings was $1.19. He also documented, until he ended his blog in 2022, other ways writers are being squeezed; at Disconnect, Paris Marx provides a longer list. The Writers Guild of America’s declared goals are to redress these losses and bring residuals and other pay on streaming services into line with older broadcasters.
Even an outsider can see the bigger picture: broadcast networks, traditionally the biggest payers, are watching their audiences shrink and retrenching, and cable and streaming services commission shorter seasons, which they renew at a far more leisurely pace. Also a factor is the shift in which broadcast networks reair their new shows a day or two later on their streaming service. The DVD royalties that mattered in the 2007-2008 strike are dying away, and just as in music royalties from streaming are a fraction of the amount. Overall, the WGA says that in the last decade writers’ average incomes have dropped by 4% – 23% if you include inflation. Meanwhile, industry profits have continued to rise.
The new issue on the block is AI – not because large language models are good enough to generate good scripts (as if), but because writers fear the studios will use them to generate crappy scripts and then demand that the writers rewrite them into quality for a pittance. Freelance journalists have already reported seeing publishers try this gambit.
In 2007, 2007, and again in 2017, Levine noted that the studios control the situation. They can make a deal and end the strike any time they decide it’s getting too expensive or disruptive. Eventually, he said, the AMPTP will cut a deal, writers will get some of what they need, and everyone will go back to work. Until then, the collateral damage will mount to writers and staff in adjacent industries and California’s economy. At Business Insider, Lucia Moses suggests that Netflix, Amazon, and Disney all have enough content stockpiled to see them through.
Longer-term, there will be less predictable consequences. In 2007-2008, Leigh Blickley reported in a ten-years-later lookback at the Huffington Post, these included the boom in “unscripted” reality TV and the death of pathways into the business for new writers.
Underlying all this is a simple but fundamental change. Broadcast networks cared what Americans watched because their revenues depended on attracting large audiences that advertisers would pay to reach. Until VCRs arrived to liberate us from the tyranny of schedules, the networks competed on the quality and appeal of their programming in each time slot. Streaming services compete on their whole catalogue, and care only that you subscribe; ratings don’t count.
The WGA warns that the studios’ long-term goal is to turn screenwriting into gig economy work. In 2019, at BIG, Matt Stoller warned that Netflix was predatorily killing Hollywood, first by using debt financing to corner the market, and second by vertically integrating its operation. Like the the studios that were forced to divest their movie theaters in 1948, Netflix, Amazon, and Apple own content, controls its distribution, and sells retail access. It should be no surprise if a vertically integrated industry with a handful of monopolistic players cuts costs by treating writers the way Uber treats drivers: enshittification.
The WGA’s 12,000 members know their skills, which underpin a trillion-dollar industry, are rare. They have a strong union and a long history of solidarity. If they can’t win against modern corporate extraction, what hope for the rest of us?
Illustrations: WGA members picketing in 2007 (by jengod at Wikimedia).
Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Follow on Twitter.
4 thoughts on “Strike two”
At BIG, Matt Stoller+
At BIG, Matt Stoller has written a posting about the structural changes in Hollywood that the shift to streaming and vertical integration have brought and the loss of the feedback loop that ratings and box office takings supplied. He argues that Hollywood as we’ve known it will die if the writers and other unions lose.