Hollywood is bracing for a potential strike as screenwriters and movie studios begin contract negotiations on Monday that are expected to be the most contentious since 2007, when the film and television industry ground to a halt for 100 days.
The 11,500-member Writers Guild of America is taking aim at compensation practices that have taken root in the streaming era — including how royalties are paid — as it begins talks with the Alliance of Motion Picture and Television Producers. The current contract ends on May 1.
“Writers have been undervalued for some time, but the move to the streaming model has made it a desperate situation,” said Chris Keyser, a writer and member of the WGA’s negotiating committee. “The business is broken. Writers can’t make a living.”
The rise of Netflix and its imitators has led to a massive rise in the number of programmes produced, but most writers are earning less in the streaming era than they did in the traditional TV business, agents and entertainment lawyers say.
“It’s like seeing a bunch of Ubers on the road and thinking it’s a good time to be a taxi driver,” said an LA-based entertainment lawyer. “Being a working writer is much harder than it used to be. The level of compensation, the treatment and expectations are all fundamentally different than they were.”
Under the traditional US broadcast TV model, writers would produce about 22 scripts per season, and they earned royalties if a show performed well. But streaming series are much shorter, often eight to 10 episodes, and the writers’ earning ability is more limited.
Studios have also shrunk the number of writers who work on shows, leading to the rise of the “mini room” — small groups that “churn out scripts in a truncated period of time with fewer writers engaged on staff”, according to one entertainment lawyer.
In a statement, the AMPTP said its members were “fully committed to reaching a mutually beneficial deal” and would seek to “keep production active”.
The pay talks, which happen every three years, are coming at a difficult time for the traditional studios. After pumping billions into their own streaming businesses, Disney, Warner Bros, Paramount and NBCUniversal are under pressure from Wall Street to cut costs and make the services profitable.
The Hollywood studios are also facing the decline of traditional TV revenues as well as competition from Apple and Amazon, whose streaming services are supported by their lucrative core businesses.
“The writers have some very legitimate issues that need to be addressed . . . and on the studio side, they’re all bleeding money from spending so much on [streaming] content,” said a prominent Hollywood agent. “So you have these two forces coming at each other, both with legitimate issues, and that sets up a tough negotiation.”
He added that studios were stockpiling scripts and asking writers to deliver work ahead of schedule, adding to the tension. “All you hear in Hollywood is there’s going to be a strike,” he added.
The strike in 2007 — the same year Netflix launched its streaming service — is estimated to have cost the state of California at least $2bn. It also led studios to commission more unscripted programmes, which cut writers out of the picture.
“To some extent the studios are in a better position [than the writers] to endure a work stoppage of some length of time,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “But both sides can be losers if it’s an extended strike.”
