“Nobody saw it coming. You’re buying your toilet paper and television shows from Amazon... The same people that send you toilet paper are also producing television.”

On Monday April 24th, WGA leaders received an overwhelming favorable authorization from their members for what will be the first strike in 10 years. However, both sides are expected to meet this Sunday and Monday as the clock ticks towards the inevitable contract expiration at 12:01am on Tuesday May 2nd. For writers and producers, there’s a lot of money on the line. For the audience, some of our favorite content might be on the line. For the rest of the film industry, though, the outcome of a writers strike is about more than halted productions and jobs. Historically speaking, writers strikes have signaled huge shifts in the film industry, particularly where money is concerned. If we want to know the financial future of our industry, we all need to be paying attention.

Expanding Formats and New Revenue

While there are a lot of gritty contract details (health insurance, pension plans, etc.) that build up a writers strike, the post-WGA strikes have mostly been about changing formats and new sources of revenue. Studios are often quick to capitalize on new technologies and slow to share the profits, creating tension with labor unions like the WGA.

Those tensions first came to a head in 1960, as films were gaining a second life on television, the writers picketed for a share of the new TV money. Writers got 5% of TV revenue from pre-1960 movies that were on television, and 2% from movies aired on television going forward, among other things. It lasted 20 weeks and six days.

In 1981 and ‘88, the topic was “pay TV” and home video, which added a third and fourth life to films that were theatrical films. The AMPTP argued that cable and VHS revenue was only offsetting losses in other areas. A great deal for writers that came out of a long strike in ‘81 turned into a bad deal during contract negotiations in ‘85 and led to a 22-week strike when the contract came up for renewal in 1988. Deborah Moore, a freelance producer who spent nine years as Head of Physical Production at New Line Cinema (and has worked on 85 films in a producer, financial oversight, or executive capacity), was new to the industry when the strikes in the 80’s shook Hollywood:

“I was on a movie and I remember the strike hit and there was absolutely nothing to do… It was a long time. That one virtually shut down the industry.”

Richard Dubin, a TV writer, director, actor, and producer since the late 80’s who now teaches at Syracuse University, describes one of the issues that plagued the strike in ‘88.

“In ‘88, the FOX network was relatively new, it was a couple of years old. They were saying, ‘We’re not a real network, so we’re not going to pay you the same money NBC, CBS, ABC pays, because we’re just this little upstart thing blah blah blah blah blah.’ They made a deal where they could buy scripts for half the amount of money ABC, NBC, and CBS paid… Then there were video tapes. Nobody was thinking about disks, it was just tapes. So all of the studios and people on that side of things said, Oh, that’s not a real business, that will never make money. You can’t have anything for that.”

He then highlights a major cyclical trend in the tensions between the WGA and AMPTP.

“Of course, tapes boomed, disks really boomed and now all that shit’s over.”

Disks really did boom, and they almost single handedly killed almost 20 years of labor peace in the film industry. The year was 2007, and emerging Internet streaming and dominant DVD sales were opening up revenue options too big to ignore. In a wonderful piece for CBS News in 2007, television and graphic novel writer Mark Evanier discussed the importance in fighting for a share of Internet profits:

“... The burgeoning import of Internet delivery and other new technologies meant that we had to take a stand. There are too many dollars at stake for us not to establish our place at the table. There's also too much history. Blood was spilled to establish residuals, credit determination, health and pension, and other benefits. The Producers' current negotiating stance tips their true agenda: To build the online phase of the industry without all the gains that the Hollywood unions have amassed over the years.”

As the decade since has shown, the online phase of the industry would grow into something completely unexpected, as Richard Dubin points out:

“Nobody saw it coming. You’re buying your toilet paper and television shows from Amazon... The same people that send you toilet paper are also producing television.”

As history has shown, when the money is shifted in the film industry, there’s usually a writer’s strike to highlight the occasion. Why, then, are writers the only ones at the party?

Why Writers?

There are three above-the-line labor organizations in Hollywood: the Directors Guild, the Screen Actors Guild, and the Writers Guild. Why is it writers, then, that go on strike so often? That answer is complicated. On the surface, the Writers Guild contract expires first (May 1st for writers versus June 30th for the other two), so any sticky issue facing the industry is, on paper, most likely to begin as a fight between the AMPTP and the WGA. However, the DGA often works out their deal first, meaning that the WGA is trying to build from deals the DGA has made, which is easier said than done.

Writers have a really hard time getting their way. If actors or directors strike, production comes to a halt, period. That’s a lot of leveraging power. When writers strike, production lags but doesn’t necessarily stop completely. While new scripted content will be harder to find, current productions can still reach completion. While the financial impact is immediate (and large) for striking writers, it’s delayed on producers. That’s leverage in the producers’ favor, and the AMPTP hasn’t been shy about using it in contract negotiations.

Take, for instance, writers working on a project that's moving along slower than expected. If the writers strike, the producers on this project could save money as contracts nullify once they expire. In short, it's a cost-effective way for studios and producers to start clean on a project. This is a scary scenario for any writer, and it’s compounded by the fact that WGA members can’t be paid to write during a strike. Even if these writers aren’t let go, they could still face a lengthy period of time without pay.

Because of their limitations with negotiating power, writers have to be more vocal and extreme than their union counterparts. In turn, the resulting strikes become the loud punctuation marks signaling the end of one era in the film industry and the beginning of another.

Setting the Tone for the Rest of the Industry

Picture from the Los Angeles Times.

Contract negotiations for the WGA, DGA, and SAG-AFTRA revolve around the same changes in the industry. In 1960, the writers strike preceded a strike by the SAG membership (led by Ronald Reagan) by one month. They were striking for a lot of the same things. The current strike is not different, as a Deadline article from March 28th points out:

“On a dollar-for-dollar basis, if you add up a reasonable estimate of the phantom revenue that would have been generated by the past 10 years of TV and feature overall deals that never came back; from the restructuring of feature writing deals towards the so-called “one-step” deal policies now in place for most feature writers; from shifts towards lower-cost unscripted, talk, or “new media” formats; from the shift toward smaller order sizes in TV; and from the eventual favoring of the new SVOD platforms that don’t generate meaningful residuals or backends for members of any trade union.”

Deborah Moore agrees, noting how difficult it is to validate data views and downloads in the streaming age.

“It’s true of all the various unions. They all have such different contracts and they don’t negotiate together, or use their collective strength when it comes to collection of residuals. Like, right now, the streaming revenue is such an important part of where we’re all going and, unfortunately, no one’s really reporting what that revenue is. It’s very difficult to get any kind of analytical data… Netflix, Amazon, they don’t share any of that stuff.”

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Apple TV

In short, but worth reading about at length, there is more television/streaming now than ever, but with shorter seasons and writers getting paid per episode, the added content and new revenue for studios is actually producing less money for a lot of writers. Deborah Moore notes:

“Now with longform narratives, shorter series, so much television - so much brilliant television - that’s being created for the likes of Netflix, Hulu, and Amazon. It’s changed the whole landscape. It used to be that you’d do 22 episodes in a series, now you have eight episode series or something like that. Writers contracts are typically by episode and not by how long they’re working… TV writers are having a very, very difficult time.”

While writers are getting the worst end of the deal, this is an issue that affects everyone in the film industry. For Deborah Moore, the lack of transparency with streaming services is concerning.

“I have a couple of movies that are on Netflix, some that you can access on iTunes or whatever. I have no idea how many iTunes downloads there have been on those movies at all, and there’s no way of auditing or validating.”

Richard Dubin sees the inflexibility of contracts as the main culprit of the current (possible) strike.

“We’ve got to figure out how to make these deals flexible and verifiable in terms of what is going on at any given point. Anticipate that everything is changing literally as you’re making the deal... It has to be as unconventional as the sharing economy is. It needs to be set up to share in ways that are equitable.”

Dubin’s perspective poses an interesting question. It’s easy to see how early Hollywood would be unprepared for technological innovation and new sources of income, but now that movies have been around for well over a century, shouldn’t studio contracts be prepared for disruptive technologies and practices?

It’s not as if the studios want a writers strike. There are millions of dollars at stake for both sides. If industry changes exclude writers, if contracts remain inflexible to changing times, it sets a dangerous precedent for the way money is distributed for everyone else. Writers strikes are, and always has been, a first line of defense for those who work in the film industry, setting the tone for the future. Plus, if you’re going to create change in Hollywood, it’s only appropriate to start with the scripts. Deborah Moore concludes:

“A script is the currency of Hollywood. Without that, you really have nothing. Good writers are hard to come by.”

The clock is ticking and the stakes are high. Let’s hope, for all of our sakes, that the writers are successful.