Front Burner - The impact of the writers' strike, on screen and off

Episode Date: May 4, 2023

On Monday at midnight, over 11,000 television and film writers with the Writers’ Guild of America officially went on strike. The strike has triggered a sense of déjà vu in the TV world, in part because Saturday Night Live and late night talk shows are headed into reruns. But it’s also rekindling memories of the last major work stoppage in Hollywood: the 100 day writers’ strike in 2007 which caused a boom in reality TV and – by some estimates – cost the California economy over $2 billion USD. Lucas Shaw covers media and entertainment for Bloomberg, and today he’ll explain why writers are striking in an industry changed by streaming, and what parallels exist with other job action happening across the economy. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Alex Panetta. Hey, Netflix! You're no good! Pay your writers like you should! On Monday at midnight, the Writers Guild of America went on strike. Over 11,000 film and television writers are now off the job after the guild and the studios that hire them

failed to reach a contract. Picket lines are seeing big names show up in support, like Rob Lowe. You know, we're only as good as the writing we get. Or Jay Leno, who arrived with donuts. The strike has triggered a sense of déjà vu in TV land, in part because Saturday Night Live and late-night talk shows are headed into reruns. Without these people, this show would be called

The Late Show with a Guy Rambling About the Lord of the Rings and Boats for an Hour. But I wouldn't have a show if it wasn't for my writers, and I support them all the way. I also feel very strongly that what the writers are asking for is not unreasonable. But it's also rekindling memories of the last major work stoppage in Hollywood, also a writer's strike over 15 years ago, in 2007. That 100-day disruption not only shaped the course of work conditions for writers in the digital age, it also shaped the kind of entertainment we get as viewers. So what's happening in the digital age, it also shaped the kind of entertainment we get as viewers. So what's happening in the industry now? Why are writers striking again? And how does this fit into

wider labor unrest? To explain, I'm joined by Lucas Shaw. He covers media and entertainment for Bloomberg, and he's the author of the Screen Time newsletter. Screen Time newsletter. Hi, Lucas. Hey there. So as of Monday at midnight, the Writers Guild of America officially went on strike. The impact is obvious

on late night talk shows, but behind the scenes where it's less obvious to viewers, what else has this strike brought to a halt? Well, it's halted the development of all new projects, right? So TV shows that are already in production, scripted movies and TV shows both can likely continue.

Oftentimes, you will have work on scripts happen during that production. That will be harder because, again, writers are not allowed to do any work or take any meetings with studios, with production companies, and the like. So while production can continue, selling of new scripts, the development of new projects, which often can take months or years, is not allowed. And so if you're an average viewer, other than the late-night shows that you mentioned, you're not going to see a lot of immediate impact because streaming services and TV networks have banked a lot of projects. But again, depending on how long the strike goes, you may see a lot of shows not come back when you normally expect them later this year or early next

year. Oh, so let me ask you about that. So like the D-Day sort of where viewers start to notice it on Netflix or Amazon Prime or Crave, when does that happen? Is it later in the fall or something? notice it on Netflix or Amazon Prime or Crave. When does that happen? Is it later in the fall or something? It's hard to pick an exact date because it really depends on how much these folks have banked. My sense is that with big streaming services, you really won't see an impact until next year. And it would only happen if the strike lasted, say, more than three or four months. Because places like Netflix and Amazon, you know, finish projects well in advance and probably have most of their slate for this year, either done or in a stage where they no longer need a writer.

Okay. And so you would, you would start to see it in the fact that they can't generate new projects. And most of those take, you know, at least a few months, if not a few years to make. Okay. So it takes a while, but let's take a step back then and establish the basics of how writers make a living and why they've decided to strike. So how exactly do writers get paid for the work they do writing the shows we watch? Well, it depends on the writer, but the general rule, you know, you have about half of the guild, according to the guild, makes a minimum, right? And so that means that if they're a writer on a show, they get paid a certain fee for their work, sort of like

any normal wage. Writers then also get paid extra if they're credited on a project. So if they write an episode of television, you tend to get paid a certain amount of money. And how much you make can depend on seniority, things like that. If you're a producer, you get fees that's separate from this. And then you get residuals for when a project is rerun. So that has historically been, maybe you make a show for a linear TV network, it gets licensed to another network, it gets licensed to a streaming service, that deal you get paid a certain amount for. Streaming has really changed that because you sell a show to Netflix and it's just on Netflix. And so you do get paid a residual for it sort of reappearing on Netflix because anybody

can call it up whenever they want. But one of the things that writers are upset about is that they feel that the residuals that they get from streaming services aren't that big. They should be higher. And perhaps even more importantly, they don't vary depending on how successful the show is. One of the things that has happened historically is if you wrote some

big show, you're going to make money from that show for years and years and years. Because not only are you getting paid a lot of money for new seasons, but then when it gets licensed and it enters what's called syndication, you're getting checks for that. Like, you know, one of the creators of Friends.

Paper! Shut up! Shut up! Shut up! That show is so popular in many countries. And then it gets licensed to Netflix and then it gets licensed to HBO Max. And the creators make money every single time that happens. But now that streaming services tend to sort of buy and keep shows for a long time, even though they eventually do sort of relicense them, that syndication market has really hollowed out. And so there's a feeling that there's a big windfall and success doesn't exist. We're seeing these sorts of labor disputes in a number of different industries. Wages aren't necessarily keeping pace with inflation.

The impression I'm getting is that's happening as well when it comes to entertainment writing. I mean, are the writers correct that their salaries have not kept pace with the cost of living increase? That is certainly their argument. cost of living increase. That is certainly their argument. You know, they're saying that you look first at Hollywood and the amount of money being spent on television has gone way up because of all these new streaming services, right? And the amount of money being spent on each individual episode also has gone up over the last several years for any number of reasons. Then you factor that in. And those, I would say, the amount of money being spent on television and the amount of money spent per episode or per movie has probably risen faster than inflation, right? The writer's salary, at least according to the Guild,

has only gone up a little bit. And if you factor in inflation, it has actually gone down. So that is certainly one of the reasons why they're upset. Now, the one thing I'll say on this is they do publish a fair amount of data on salaries and things like that, but we don't have a full transparent accounting of wages that would make me very comfortable knowing exactly what the numbers are. Okay. And seeing the amount of content being pumped out now in streaming services, you'd sort of assume more writers are making a great living because there's just so much content out there. Why are many writers now saying this transition to streaming has put them in a worse position? Well, you got to think

about, you know, how the average show, both how it's made is different and how it's released is different. So in terms of how it's made, you tend to have fewer episodes per season. You know, the typical broadcast show, at least in the US, would be kind of 20 to 24 episodes. The typical streaming show is more like 8 to 12. So you have fewer episodes being made, which means fewer credits, fewer of those bumps for writing an episode.

It also means that because you're making fewer episodes, that oftentimes the writers' rooms, the group of writers working on the show, has fewer people in it. So there are fewer jobs per show. Oftentimes, you know, you have some of these auteur-driven shows where there's like one writer who writes the whole thing. That's great for Taylor Sheridan, who created Yellowstone. This ain't checkers, son. This is chess. And you're about to play it with masters. But not so great for other people who maybe want to benefit or get paid for working on Yellowstone.

But the fact that fewer people are working on it, fewer episodes, but it doesn't mean that there's less time being spent on these shows. Oftentimes, there's as much, if not more. And so you have a lot of writers who feel like they're putting in more time for less money. feel like they're putting in more time for less money. And there's also been this relatively new phenomenon of what's called a mini room, where a studio will assemble a small group of writers to kind of crack the story way ahead of time. The pay for that is generally not as lucrative

as the pay for some of these other projects. And because a lot of the work is done ahead of time, those writers often don't get to go on set and get some of the experience that would allow them to sort of level up and be someone who is more of a writer producer. So if I'm understanding you correctly, it's not like the big name writers are getting hurt here. It's like even if a medium tier writer makes a hit show, they might still not know if they're going to make the rent through Christmas. Like why that disparity? Your initial point is correct.

The big star, the Shonda Rhimes, who produced Bridgerton and a bunch of other things. My name is Lady Whistledown. You do not know me, but I know you. The Ryan Murphys, the folks who have those big Netflix deals. So you're saying that one of the victims had actually managed to escape, and two of your officers escorted him back to Damascus. Mindy Kaling, who now produces shows for a bunch of different networks.

Buckle up for some steamy teen romance. Oh, shit. You know, they're making a ton of money. Some might argue that, again, because of what we talked about earlier with the residuals and the payout, that they're actually not making as much as they could, but nobody is worried about them.

It is that middle and lower class of person, the person who's sort of on the come up that is feeling the squeeze. And it's just streaming has fundamentally reshaped the economics and the structure of television and the way that compensation works has yet to catch up with it. And I would say, look,

it ties into broader societal trends. It's not just in Hollywood where the rich are getting richer and pay disparity and inequality is worse. That's something that's happened across industry. Okay, so I want to talk a bit about the outcomes of this strike and what they might be. Like, I think the best way to do that maybe is to go back to the last WGA strike in 2007. That strike ended up lasting 100 days. And as a result of those 100 days, what kind of impact did we see on television, on the types of shows we watch? Well, probably the most notable one was it led to this huge boom in reality

television. You know, reality TV existed prior to that point. There were very popular shows, whether it was sort of the OG of it all with the real world and MTV. You had shows like Survivor or Who Wants to Be a Millionaire. I believe The Apprentice already existed. You're fired. Big Brother. But there was just this huge explosion at cable networks and broadcast networks because reality TV is not generally governed by the WGA. And though it is labeled unscripted, we should note that some of it is in fact scripted. But again, it's just not union work in the same way.

And so they were able to load up on that. It's also cheaper to produce. I wouldn't expect a similar explosion this time around, just because there's already so much of it. I mean, if I understand correctly, we got a bunch of new shows that are household names now. Celebrity Apprentice. Is that one that came out of that? It is. Yes. There was, I believe, Ben Silverman, who was then a top executive at NBC, had an idea to create a celebrity version of The Apprentice. And there were some people who were nervous that Donald Trump would not want to do that because he would be upstaged by these celebrities. But Ben said that Trump was fine with it once he realized that he was the boss for all those people. So it made him look good. Okay. So what about the financial impact of those 100 days back in 2007? What did it do to the economy of the industry? Well, exact numbers on

that are always a little hard to come by. There was a study conducted that said that it cost the economy in Los Angeles more than $2 billion. And that's not just people losing wages for that. There's a whole economy around production. That's the people who are on set, but also caterers and makeup and hairstyle and trucks and teamsters and all these things. And the fact that there is production around means that other businesses may open around that. I think one of the interesting things to track will be that one of the big trends over the last, you know, 15 years or so since the last strike has been cities and countries offering tax incentives to lower production because they think it'll be good for the economy. So in the US, we've seen that in cities like Atlanta and

New Orleans and Chicago and in New York. In Canada, we've seen, you know, explosions and certainly in Vancouver, I think to some extent in Toronto. There are production stages that have been built that will probably go fallow for a little bit. There'll be people who sort of move to a place to work in that industry and we'll have to find new work.

You know, depending on how long the strike goes on, the impact on economies all across North America could be pretty significant. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years.

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to this podcast, just search for Money for Couples. Okay, so obviously the Writers Union, the Alliance of Studios did come to an agreement back then. It was a paradigm shifting deal that made sure studios had to pay writers in this new era of content on the internet. Where did that deal fall short? Why wasn't that deal enough to prevent the strike we're seeing today? to sort of ensure that the guild could negotiate for streaming and writers got paid and all that. But they couldn't anticipate that Netflix would spend as much on programming as they would, and they'd buy out all rights up front. They couldn't anticipate that the average number of episodes in a season would go way down. They couldn't anticipate that there'd be this huge surge international. There are just a lot of things that they failed to anticipate because

nobody anticipated it or nobody knew exactly what's going to happen. And so those deals need to get revised every so often. You know, they really didn't make a lot of progress on revising them the last few deals. And so I think now they feel like they've reached something of a breaking point. So I want to ask a little bit about the current reality and whether there's an element of greed at play and whether the studios that hire writers to make these TV shows, I mean, could they pay writers more? You know, based on the streaming boom, you might assume these studios have a fair bit of cash that they could afford to pay more. So why not? You know, look, I'm a journalist. It's really not my place to tell studios what they can and can't do. I will say that the idea of the streaming boom, meaning that they're flush and have lots

of money to spend, is a little bit of a misnomer because all the money that these companies have invested in streaming services has actually hurt their profits, right? They've spent a bunch of money to invest in new services that don't make money. And so the profitability of most of these media companies, setting aside Netflix because it's been around for so long that it's actually now profitable, the profitability of these other companies, Disney, Warner Brothers, Discovery, has gone down. But what I will say is a lot of them are still profitable. So they obviously do have money. And they still pay their top executives just a fortune. I mean, one of the things that's kind of made the rounds on social media this week is this kind of infographic showing the paydays for some of the biggest executives in media and entertainment. And you look at that, and you add all the money together. And like the amount of money that was paid to Art Emanuel is the CEO of Endeavor, David Zaslav, CEO of Warner

Brothers Discovery, Ted Sarandos and Reed Hastings from Netflix and a few more, like that money alone would basically cover the increases that the writers are asking for. You have to wonder, considering that the stock prices for a lot of those media companies went down, considering that a lot of them fired staff last year, and now they're in this dispute with writers, why couldn't they have gone and decided, okay, we'll set aside half of our compensation, most of which is stock-based, and offer it to these people instead? That's personally what I think they should have done, but I'm not an executive. What sorts of pressures would they say they're under? You talked about the expense involved

in buying libraries. How difficult has this transition been for some of these companies? Well, they're under a lot of pressure right now. There was a stretch from, let's say, 2016 to 2021, where Wall Street cheered when these companies said that they were going to spend more money. These companies are almost boasting about how much they were going to spend on their streaming services, because there was so much enthusiasm inspired by Netflix and its success. But there's been a total rethink in strategy really over the last year, year and a half, and kind of the future in terms of the way people consume traditional filmed entertainment, that because of macroeconomic pressures and because of some of the slowing growth at a

place like Netflix, there's growing concern about the losses at some of these entities. And so companies are under a lot of pressure to cut costs and make their streaming services more profitable. It's why we've seen Disney, Warner Brothers Discovery, Comcast, even Netflix fire staff and talk about sort of leveling off their spend. So it's actually sort of a weird time for the writers to be pushing for more money. Let's talk about technology, because I think it's part of these negotiations. In 2008, that contract addressed a new technology that was going to change the industry, streaming. And it seems that this time around, one emerging technological issue is artificial intelligence. How is AI figured into these negotiations?

You know, it's figured out a little bit in that the writers have asked for certain protections, which thus far the studios have rejected. You know, the writers want the studios to commit to the idea that like there has to be a human involved in the creation of a script and the studios want to just say that they'll talk about AI going forward. I tend to think that some of the agita around AI borders on hysteria. I think that AI is unquestionably a vital tool. And much as it made sense for the writers 15 years ago to get certain protections for streaming so they weren't left completely unprotected, it makes sense to try to have certain protections for AI. But we're so early in seeing how AI can be used

for kind of creativity, all this generative AI stuff, that we don't really know how it's going to play out. And so it's hard to design the proper rules. And like I said, I sort of remain skeptical that you're going to have a studio entrust a computer to write a full script. You might put in an idea and have it flush it out for you a little bit.

You might use AI in the visual effects process. But I don't think we're suddenly going to see some summer blockbuster that was written by a robot. Yeah. So you do have to wonder if we're at some sort of inflection point, not just for the technological issues we just discussed, but also some of the other economic factors at play. I'm just wondering, if you had to sort of project, how might you anticipate the industry changing after these contract talks? It's a good question, and I'm not sure I know the answer. My belief, just based on some folks I've talked to, is that this strike will go on for a while and it will be resolved where the studios agree to pay the writers. They'll increase the minimum salaries. They'll increase the residuals. They'll maybe make a couple of compromises in some other places, but they're not going to completely overhaul the business. They're not going to agree to have a minimum number of writers work on every project. They're not going to agree to give full transparency over viewership. And so if they're not going to overhaul the system

in that way, I don't know what the long-term impact will really be in the business. And it's likely to be something that I'm not anticipating right now. Well, that's a great way to end and definitely appreciate you taking the time to chat with us. It was a pleasure. Thanks for having me. Well, as they say in Hollywood, hasta la vista, baby. Thanks for listening to FrontBurner and talk to you all tomorrow.

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