Discover more from Learning by Proxy with Vivek Srinivasan
The only industry that has got wealth distribution properly sorted is on the precipice. The capitalists do not want labour to have it their way this time.
If you watched the latest Mission Impossible: Dead Reckoning Part 1, you certainly got out of the theatre thinking when is Part 2 coming? The answer is even Tom Cruise does not know. It has been put on hold.
Say you wish to make a movie.
A story writer needs to write out the entire story. You can ramble on for 30 pages in a story about the background and other details, you cannot have a 30-minute narration in the visual medium. That story needs to be adapted to a visual format where screenwriters come into play.
The screenplay is then broken into scenes and storyboards are created. Then someone has to write the dialogues that go into every scene.
A director takes this and based on his/her visual interpretation asks the actors to act the part. The whole thing goes into editing where the editors can look at the entire footage and decide what can be left out or pruned to make the storytelling that much more crisp.
If this were a show, there is an added layer of continuity. The characters have been developed to have their unique persona and the writers know their personalities, their quirks, and their past. They can weave that into the story to keep them consistent. The writers start thinking like the character and build them accordingly.
In Hollywood, every creative enterprise is almost like a company with each of these individuals being a shareholder in the final product.
Before streaming, movies used to have a theatrical release, a CD release and a cable release. With shows, they used to be released on the networks that produced them but then were sold to other networks through syndication. Each time the producer made money from the resale of the content, the creators would get paid their share. This is known as residual income.
According to a report by Marketplace, the cast started receiving syndication residuals once the show ended in 2004. The cast retained the rights to these profits after season 9 and 10 of the show, which is when they started earning $1 million per episode. All Friends cast members — Courtney Cox, Jennifer Aniston, David Schwimmer, Lisa Kudrow, Matt LeBlanc and Matthew Perry — receive 2 percent of the syndication income, which is about $20 million for each person per year, USA Today reports.
Source: Project Casting
Obviously, not every show sees the same level of success and not everyone can make that kind of residual income. While the news tends to highlight the incomes that the cast members can generate, the creators also partake in the residual income.
Do screenwriters get residuals? Yes, screenwriters receive residual income. Film writers get 1.2% of the total distributor’s income and TV writers get $27,245 for the story and teleplay credit for the 2019-2020 season.
But these numbers are just a base. Writers can get more based on DVD sales and reruns overtime.
Yes, screenwriters get paid residuals from there past work. But only credited writers on produced projects see any type of return. If the film or tv show was never made but you might have gotten paid for your work but no residual money will follow.
You need to credited with at least one of the following credits to be able to receive residuals.
Source: Freshmen Screenplay
Unlike an actor, a writer might end up working on several projects which may never go into production. So there is already a certain amount of gamble involved here because what the studio might decide to do is not in your hands and the reasons for cancellation can have nothing to do with the script.
I loved ‘National Treasure’ when it was released. Incredible writing combined with research of history. But the third instalment never went through…
Plans for another entry into the series were halted after the release of the sequel in 2007. The reason was simple – Disney was finding it difficult to capitalize on National Treasure the way they cashed in on movie franchises like Pirates of the Caribbean and the Marvel Cinematic Universe.
On its own, the franchise was doing fine, just that when it was compared with Pirates and Marvel, it could not generate similar revenue. But obviously, it would not appeal to the dumb. You had to know and/or care about history to love National Treasure. No fault of the writers. As if to emphasise my point Barbie made more money than Oppenheimer.
In the case of a movie, the income distribution is quite simple. It is all about the box office returns. In the case of Television, it was Ronald Reagan (yeah, the president) who negotiated residuals for TV shows as the President of the Screen Actors Guild in 1952.
The Screen Actors Guild (SAG) was formed in 1933 and the Writers Guild of America (WGA) was formed in 1954. These are some of the oldest unions in America and they were formed at a time when wealth inequality had not got to the point where the large business (read studios) could arm-twist the workers into abandoning their unions. They did not have the capital or the political might to blow these guys away. The WGA was formed as TV become more prevalent.
As the cost of living has changed over the years, the Actors and Writers have managed to escape living at minimum wages because of these unions and each time they have wanted to renegotiate their contracts they have been forced to go on strike. As you can see the issues have been pretty much the same.
The WGAE and WGAW negotiate contracts in unison as well as launch strike actions simultaneously.
The 1960 Writers Guild of America strike lasted for 22 weeks. The negotiated contract included the first residuals for theatrical films, and the improved pensions.
The 1981 Writers Guild of America strike lasted for 13 weeks. The negotiated contract included establishing payment terms for "pay TV" cable programs.
The 1985 Writers Guild of America strike lasted two weeks. At dispute was the formula for paying home video residuals.
The 1988 Writers Guild of America strike lasted from March 7 to August 7, 1988. Among the disputes were residuals from syndicated reruns of hour-long shows.
The 2007–08 Writers Guild of America strike lasted from November 5, 2007, to February 12, 2008. Among the disputes were residuals from content made for new media and programs on DVD. The production of several television shows were affected by the strike.
On average, there is one strike a decade. Same for SAG as well.
Technology seems to change once a decade and they must strike to make it fair.
But the world has changed in the last 10 years and more heavily since the pandemic.
Streaming has slowly been chipping away at Cable TV and Cinema. There is a huge catalogue available for just $10 and you can choose anything you want. The only reason to subscribe to cable is live sports and even that is moving to a streaming model. Linear Television has been on a decline and many of the smaller movies had a hard time making box office returns.
The adoption of streaming jumped during the lockdowns. The Pandemic eviscerated box office income. Movies from Marvel have struggled at the Box Office. Further, networks have used movies such as Black Widow as bait to attract more users to their services. Scarlet Johansson took Disney to court about the direct-to-streaming release of the movie, denying her any box office income. Disney settled the case.
The streaming income is also a lot more complicated. When you pay $10 and go watch a movie at a theatre, the income from that is clear. And that is merely the beginning of the problem.
Even in the TV paradigm, the number of viewers who would tune into a show would determine when the show was aired and the viewership also helped determine the ad revenue that TV stations were able to generate from the show. The makers of the show would be able to negotiate income based on the viewership generated.
Streaming companies are secretive about the show viewership. They are unwilling to share these numbers which then makes the entire process of paying any residual very opaque. With TV viewership, the TRP figures were public. Not the case with streaming.
Streaming services charge $10 and give you access to a whole catalogue of shows and movies - tens of thousands of them. Say you watched 100 shows during the month, each should get a revenue share of 10 cents. Their biggest selling point was NO ADS. If you spent $10 million making a show and were to recover the cost 10 cents at a time, you need 100 million views to recover the cost. Netflix has 230 million users and not every show is viewed by half of them. It is easy to declare that every show is yet to recoup the cost of production, especially when you are not duty-bound to share viewership figures.
Jason Belleville (Home Economics): “I wrote on the first season of Cobra Kai, which is one of the biggest shows in Netflix history. I think I have more money in my pockets right now than any residuals I’ve seen from that. I also was an executive producer of a show for Netflix called Sneakerheads, which was a smaller show, but it premiered No. 1 one in a bunch of countries for a little while. I have yet to see $1 from that. And I was a writer and EP on that, in comparison. Some of them [broadcast shows he worked on] you can still get some money from but obviously, it’s not like it was. But there’s always a steady trickle that comes in to remind you that you once worked, right? The [residual] formats for cable and for networks are clear and transparent. Whether they’re as much as we want them to be or not, they’re at least something that you can rely on. Whereas, some of these YouTube shows, these [shows licensed to] Netflix. This whole strike is about having money you can rely on through the years so you can pay for your mortgage, you can take care of your kids, as opposed to opening an envelope and going ‘oh, it’s a nickel this time.'”
Sarah Sokolovic (Big Little Lies, Homeland): “I can tell you the money I made from residuals dropped in 2015 to less than half in 2018. And the funny thing about it was I was on two, Emmy-award winning shows. It’s not on the side of the individual producers, of course. It’s really about the studios making sure that the basic contract has things in place so that actors like me benefit from their work residually over time. There was a time when I was traveling out of the country, so I had to have my mail forwarded to my mother. She was helping me with deposits, physical checks at the time. She opens a check and she goes, ‘Sarah, it’s three cents’. I said yes. She said it actually costs more to mail it.'”
In addition to this, companies like Amazon, Netflix and Apple have deep pockets and they have often got that way by enriching a few. Typically such companies would not even miss a beat handing out cheques to the tune of $100 million to the CEO but they have been told by their doctors writing cheques for $10,000 to a group of writers could result in the development of arthritis around their wrists. Hence due to medical considerations, they avoid doing this.
It is a clash of these cultures that is causing the current strikes.
On the one hand, some people are like you get paid for work you did in the past???!!!
And it is how it should be as well. The creation is the result of the effort of many individuals and their creativity and it should not be appropriated only by those who were able to finance it. Truthfully speaking if this was the case in every industry, you would not have the kind of income inequality that you see today.
Construction workers being able to benefit from the long-term use of what they were able to put together, would that not be a different world to live in?
On the other hand, the fact that people worked on award-winning productions and netted cents as residual pay also shows how streaming is being used to change the maths of what these people can make.
So think of this a bit like you slog for 2 years and get into Harvard and get the $400,000 education hoping that job offers would come pouring in. You are appointed the CEO of a company and you are told that your company is doing incredibly well and it did so well that you will get minimum wage. That is the kind of situation many of these people find themselves in.
And so they went on strike.
The SAG strike could have been avoided but the catch was the use of AI to render the likeness of the actors.
When Paul Walker died during the shooting of Fast and Furious, they made his brother step in and rendered the actors’ faces on him to finish out the movie. For the first time in the film industry, a dead man finished his movie. Now studios can claim ownership of characters and render them through AI. Most of the latest instalment of Indiana Jones was done with CGI. Can Disney cut Harrison Ford out completely next time and render it with AI?
For background actors, they might get hired for half a day and if the director decides that he wants another take, that actor might be called back and get paid once more for the retake. With AI, once a take has been done, the next shot can be rendered using AI instead of having to call back the actor.
Think of voice actors who do voices for animated movies, inanimate items, etc. They are most certainly going to go out of work with AI. The catch is that most of the AI would have been trained very much on their voices.
Is it not Ironic that Hollywood kept making movies about AI taking over the planet and now they are the ones who are the first to capitulate to AI?
So how is this going to end?
Receiving positive feedback from Wall Street since the WGA went on strike May 2, Warner Bros Discovery, Apple, Netflix, Amazon, Disney, Paramount and others have become determined to “break the WGA,” as one studio exec blatantly put it.
To do so, the studios and the AMPTP believe that by October most writers will be running out of money after five months on the picket lines and no work.
“The endgame is to allow things to drag on until union members start losing their apartments and losing their houses,” a studio executive told Deadline. Acknowledging the cold-as-ice approach, several other sources reiterated the statement. One insider called it “a cruel but necessary evil.”
The big-name actors won’t be hurt much by a 6-month long strike. Also, they can’t do much work without the writers. But for the minor actors and especially for the writers, it might become increasingly difficult to hang around striking for long.
On the flip side, the switch to the streaming model also means that the studios are not really immune. Consumers pay month on month. They pay because they expect new content to show up, all the back catalogue is the cherry on the cake. This means that consumers could cut off their subscriptions in the blink of an eye if the catalogue stagnates. Can they really go an entire quarter with anaemic releases?
Apple TV for instance releases one or two shows a week. They are already down to two a month. Netflix will be increasingly pumping international content and reality TV.
Disney releases have painfully slowed down and they are in fact courting a buyer for their India business; rumoured to be either Jio or Tata. There are even rumours of Apple being courted to buy Disney Studios. Disney had no plans in place for a world beyond Avengers. The interest in Marvel movies has cratered since Avengers ended. In addition to that they lost John Lasseter due to allegations of sexual misconduct who was almost singularly responsible for the rise of Pixar and the re-emergence of Disney Animation.
Apple needs a lot of content for the Vision Pro that it will be launching in 2024 and Laurene Powell Jobs is one of the biggest shareholders in both companies.
One bad quarter is all it will take to set the cats amongst the pigeons.
No matter which way this goes the power structures are on the verge of shifting. If the guilds buckle, they may never be able to negotiate a better deal. If the studios buckle, they may always be left renegotiating.