The Daily - Did Hollywood Writers Get Their Happy Ending?

Episode Date: September 27, 2023

After 148 days on strike, writers of movies and television are returning to work on Wednesday with an agreement in hand that amounts to a major win for organized labor in Hollywood.John Koblin, a media reporter for The Times, explains why the studios acquiesced to writers’ demands and what the deal means for the future of American entertainment.Guest: John Koblin, a media reporter for The New York Times.Background reading: After Hollywood’s bitter monthslong labor dispute, the Writers Guild of America got most of what it wanted.Now the focus turns to actors: The studios and the actors’ union haven’t spoken for more than two months, and a deal is needed before the entertainment industry can fully return.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From The New York Times, I'm Sabrina Tavernisi, and this is The Daily. After 148 days on strike, one of the longest in history, writers for movies and televisions will return to work today with a deal in hand that amounts to a major win for organized labor in Hollywood. Today, my colleague John Koblen on why the studios acquiesced and what the deal means for the future of American entertainment. It's Wednesday, September 27th. So, John, we're talking on Tuesday afternoon, and by all accounts, the writers and the studios have reached a deal on a contract after the writers striking for months and months. And we wanted to come to you to talk about this and, you know, how this deal came about, what's actually in it. But right off the bat, top line, highest level, what's your read on all of this? Who's really the winner here? It looks like at this moment that the writers really prevailed. You

know, it's funny, when the writers last went on strike, which was 15 years ago, 100-day strike, so more than three months. After that strike had ended, after they reached that tentative agreement, the guild leader sent out an email that said something like, you know, we didn't get everything we wanted, and, you know, we've sacrificed countless hours during the struggle, but we did well. This time, when they announced the tentative agreement, which was on Sunday night. WTA! WTA! WTA! We just found out there's a tentative agreement on the writer's strike. It might be over. I mean, it was like vibrating with excitement, that message.

Makes me very excited because I think we might have actually saved the film and TV industry with this strike. They came out and said, we say this with great pride that this deal is exceptional. There has been so much at stake and they would not settle for a subpar deal because we're not settling over here. So there is a perception within the Writers Guild that they got a big W, like capital W, like capital V for victory. Capital V for victory for the writers. And we've talked about this before, John, on the show, but just remind us what it was that they had wanted. I mean, you know, the strike has been framed in pretty epic terms, right? A showdown over what it really means to be a creative force in the era of the streaming revolution, when the technology and the economics of the entire industry have been

changing before our eyes. But nitty gritty, what were the writers asking for? Epic is one way to describe it. Another way they described it was literally this is existential. This moment is existential. We are fighting for our survival. But by far the biggest issue was compensation. We talked about this last time, but let's go back 20, 30 years ago, back to the network TV days. If you created an ER, a big, big hit, hundreds of episodes, even if it ends after, say, nine or 10 seasons, it's going to live forever. And the reason is it's going to go into syndication. It's going to go into cable. It's going to go into repeats, essentially. It's going to go into repeats, essentially.

And every time that would air on, say, a cable network like TBS, if you were a writer of an episode, you got a check. So that's just money in the bank. You bring that back. Kind of like a royalty. Kind of like a royalty. Exactly. So now let's look at the streaming era. If you create a hit show on Netflix, let's say Bridgerton, you get a nice amount of money up front after they greenlit the show. That's great. But then even if you have a mega success like a Bridgerton,

if you think about a place like Netflix, there's no syndication. It just stays on Netflix. They're not licensing it to a cable network. So the money you used to get after a show is a huge hit, So the money you used to get after a show is a huge hit, that doesn't really exist in the same way. So writers are essentially asking for more money in several different places from the studios. Okay, so more pay was really the number one issue. What else were they asking for? They also wanted a little bit of transparency. Again, if we look back 20, 25 years ago, we know how many people watched that episode

of Friends or Seinfeld or ER. Nielsen used to tell you how many millions of viewers were watching it. We do not have that same level of transparency from an Amazon or a Hulu

or a Netflix. Though presumably they know it, given the fact that it's clicks, right? For sure. They definitely know it. And, like, they'll give us

something these days where here's our top 10 in the United States today. But the writers, they wanted to know that if a show is a mega hit, like we want to profit from that too. That's the way the old system used to work. And the other interesting thing they were asking for was about AI. And what exactly were they asking for when it comes to AI? I mean, there were several different things, but let's focus on one, which is if I'm a studio executive and I have a stack of Nora Ephron scripts, she wrote You've Got Mail, for instance. Famous writer. Among many other great movies. But I take those scripts, I feed them into the AI robot, and I say, give me a Nora Ephron style of a rom-com, of a romantic comedy. give me a Nora Ephron style of a rom-com, of a romantic comedy. That is the writer's worst nightmare because they don't want a robot to be the accredited writer of a movie.

So no good, no bueno. I mean, I don't want a robot to be an accredited writer of my article. I mean, this is like kind of scary, right? Robots should not be replacing writers. That feels reasonable to me. I feel tribal about this. Okay, so that's the basic list of things the writers were asking for. And now, Tuesday afternoon,

we are about to live into the answer of what they got. What do we know about what they did get? So it's going to become more clear in the coming days. But we know that they got a lot. We know they got much of what they asked for. And, you know, we were talking about their statement vibrating with joy earlier. Exactly, right? The studio's only statement was the Writers Guild of America, the Writers Union, and the Studio Alliance have reached a tentative agreement.

Period. Full stop. That's it. It was pretty muted. So they gave up a lot more than they were anticipating five months ago. And the union, they said they made meaningful gains and protections for every writer in every sector of the union membership. Translation, we got a lot of what we wanted. Yes. Okay, so the studios checked all the boxes

that they'd put out there. How do you explain such a victory for the writers? Because, I mean, for months, it just didn't seem like the two sides were even talking. Like the story was the picket line. So what got everyone back to the negotiating table and ultimately to a deal? So there were a few key moments.

So after the writers go on strike, that's early May. All of a sudden, the studios have two other contracts to deal with, Hollywood directors and then the actors. The studios are not worried about the directors or actors. The writers have gone on strike many times over the decades. They went on strike, as we discussed, 15 years ago. Before that, they did it in 1988. Directors and actors, they just have not gone on strike nearly as many times. Last time the actors went on strike was over four decades ago. Oh, wow. Okay. So just typically, there's a big difference between these groups. Completely. So the studios negotiate with the directors, get a deal done really quickly.

The directors call the deal historic. So one down, one to go. And then sure enough, by mid-July, the actors do go on strike. And it kind of stuns everybody. Producers, agents, Hollywood observers, but it also surprises the studio executives. Okay, so the actors go on strike, but what does that have to do with the writers? So by the time the actors go on strike, the writers have been on strike for two and a half months. It's mid-July. It's getting hot outside. It's hot in L.A. It's hot in New York. They've been walking these picket lines for two and a half months. And the actors, surprise strike,

because everybody was caught off guard, there's suddenly wind at the backs of the writers. They're not so lonely on those picket lines anymore. It's this huge moment of solidarity. The actors and writers, they hadn't been on strike at the same time going back generations. It was since 1960. So it had been years. And that is what shut down Hollywood because all of a sudden cameras can't roll anymore. You can't work without actors. It got the attention of everybody.

Right. Now Hollywood is at a total standstill, right? No one can work. Including, by the way, John, my own brother, who works in the film industry. He takes photographs on film sets. Hasn't worked since the actors went on strike. Really tough.

What do the studios do at that point? So, if you're the studio executives, this is no longer one irritating union out there. Everything is completely stopped. So you have to deal with somebody. And so the studios said, OK, you know what? Writers, we haven't talked to them in months. They've been out for a while. We're going to turn to them first. And what happens? first. And what happens? So effectively, very little happens. There were negotiations, but it was just very on again, off again throughout the month of August. You know, there was something about the month of August. Everybody's on vacation. You know, it's like, OK, of course,

there are a couple of strikes happening. Big deal. Right. The temperature changed the second we hit the second week of September. All of a sudden, everybody's rubbing the sleep out of their eyes from the summer. And then they looked around and they said, why isn't anybody working? What's happening? And also the studios just frankly began to look at their balance sheets. Warner Brothers Discovery, big entertainment company, they had to go out and announce that our adjusted earnings, because of the strikes, are going to take a hit of anywhere between $300 and $500 million this year. That's the studio behind Barbie. Like, the hit. Huge performance. And even with that performance, Warner Brothers Discovery is starting to sweat this a little bit. Wow. So, like, if this studio is struggling, then every

studio is struggling. Precisely. But it's not just the studios. The writers, they've been out of work now for four or five months. It's a long time not to get a paycheck. And by the time we're at September, we notice that some of the biggest name writers in Hollywood, Kenya Barris, he created Black-ish on ABC. Noah Hawley, he created the TV show Fargo for FX. Ryan Murphy, he created American Horror Story. They started getting kind of restless.

They were saying, what's going on? Why aren't we even in a room? We haven't talked to the studios in weeks by this point. And they were trying to meet with Guild leadership just to ask, like, what's going on? So they're saying, guys, it's been a while. Hurry up. What's happening? Exactly.

And we're still reporting out what exactly happened there. But here's what we do know. The union and the studios then did agree to meet. And that meeting happened last week. And do we know anything about what those meetings were like? Like any details from inside the room? So here's what we do know. Studio executives, top executives were suddenly sitting in the room. Disney chief executive Bob Iger, Warner Brothers Discovery chief executive David Zasliff, Netflix co-chief executive Ted Sarandos, and a huge executive at NBCUniversal, Donna Langley. They were sitting in the room.

That had not happened. And what's the significance of that, John? What did it mean that they were there? It meant we mean business now. Because it's like, whoa, if they're showing up, they want to get this deal done. It's close. It's close. And sure enough, within five days, over the weekend, they reached that tentative agreement.

And how they did it's pretty simple. They went down the writer's list of asks and basically hit on all of them. And most significantly, they open up their wallet and they open up their wallet in a way that they weren't willing to do four or five months ago. So basically the studios paid up. Exactly. So is the way to think about this, John, that the writers kind of just waited the studios out? Like that the studios couldn't deal with the math of the strike any longer? You know, turns out they also have finance departments and accountants who were saying, we got to get something on the table here? Yeah, I mean, the studios were hurting. I mean, they need productions to be happening because they need new shows. They need new movies. They need to put these things on their streaming services. I mean, already we've seen significant fallout from the strikes. Prospective blockbuster

movies that were scheduled for this year have been moved to next year. TV series that were scheduled for this year have been moved to next year. So they had to make this deal. They did have to open up their wallet. But just because they got this deal, it does not mean that production is going to start again immediately. Remember, the studios still have another contract to negotiate. The actors are still on strike. You had two walkouts, and you've got to solve one before you solve the other. So, post-strike, the writers got a lot of what they asked for.

The reality is, the cost won't just be borne by the studios. There might be a cost to the writers, too. We'll be right back. So, John, before the break, you said we're about to find out how things are going to change under this new contract. You know, what type of landscape that is going to set up. And you said that it won't necessarily be without cost to the writers. At the highest level, how should we think about that change? So the writers made a lot of gains.

They're going to get paid a lot more. But this also very likely is going to mean, on the other side, next year, the year after that, and the year after that, fewer TV shows. So tell me about that. Why would necessarily that mean fewer shows? So let's use Netflix as an example. Netflix's content budget last year was around $17 billion. My God, it's like a small country. And this year, Netflix's budget is around $17 billion. Okay. Next year, it'll be around $17 billion. Do you see a trend? I see a trend. And if you're going to pay the writers more money and you're eventually going to pay the actors more money, because they will get a deal at some point, the strike is going to end. Well, something's got to give. Then you don't have as much money to invest in the same number of TV shows or movies.

Okay, same pie, but if each show costs more to make, you know, each slice, then there are going to be fewer slices of the pie to go around. Exactly. Okay, so that's the downside for the writers, fewer shows to work on. Do they understand that? Like, is that something they've taken on board? I don't quite know yet. I haven't talked to them yet. But here is what we do know. Going into this labor dispute, the writers were calling this moment existential. They said they were fighting for their own survival. And with this new contract,

screenwriting is still a profession. The writers are still around. They still exist. But are they fully aware of what is a very likely outcome that there are just going to be fewer shows? I don't quite know yet. So what does this new contract mean for me, for Jane Consumer? Would you believe you may have to pay more money oh i know it's shocking so basically the economics of streaming you know it's been difficult for most media companies over the last decade peacock paramount plus hulu these are streaming services that lose a lot of money and still do so those days where you were paying $7, $6 a month and you're getting endless streaming content, you pay a lot more than that now and you will likely pay more in the future.

So kind of like Uber, I had the app on my phone forever. It was super cheap. I used it all the time. Suddenly, kablam, it became really expensive. I stopped using it. Exactly. And to make the balance sheets work, you keep raising prices. And now, even more so in the wake of these strikes, the studios are probably going to have to, at some point, some point the next year, raise prices again. So you're saying that the studios may just pass the cost of this new contract on to us? us. That's what some financial analysts are already saying. And the other thing is the strikes have lasted for months. So at least in the short and midterm, going into next year, there are going to be fewer TV shows. There are going to be fewer movies. You will find yourself on your couch at some point, clicking on all these streaming services, saying to yourself, where is something

new to watch? Like, I want, no, give me more choices. I want more choices. And you won't quite have that. But John, what if I don't want quite so many choices? I mean, maybe there's an element of silver lining in this. I mean, there were so many shows, right? Should there be that many shows? Totally. I mean, this is something if you put your serum in the arm of creative executives, they will say fewer shows. That is great because then we as creative executives have time to focus on quality. We have time to really get in there and help writers with their script and to help with the cuts of a show. So yes, I think long-term for consumer, it will be good because no, we did not need 600 scripted shows in the United States

every single year. I only watched a fraction of them. It's hard to watch that much television, even with all the time in the world. Perhaps they can focus on the good ones. That's right. So John, it strikes me that this is a moment where the streaming industry has just kind of lived through its heady, young, maybe teenage days, right? And now we are living into an era in which it has to grow up. And in some ways, we as consumers also have to grow up along with it, which what I mean by that is, you know, we have to realize that these shows do cost a lot of money to make and that we're going to have to come to terms with the fact that we're going to have fewer of them and we're going to have to pay more money to get

them. Yeah, I guess maybe we're in sort of our adolescent moment for these streaming services. And as a result, it's a little tricky. It's a little difficult. It's a little tough. And it's going to be tough for us because, you know, the whole promise of streaming was this was all going to be so much cheaper, right? This is going to be so much cheaper than cable. Let's cut the cord, subscribe to a few streaming services, and we're good to go. But the prices have been creeping up, and there is talk in the entertainment industry now of why don't we bundle a few of these streaming services together? industry now of, why don't we bundle a few of these streaming services together? Max, meet Peacock, meet Paramount+. So all of a sudden, you're starting to recreate cable in some way. So the cost in the end, it's probably going to approach or maybe even match at some point what we used to

pay for for cable. So John, thinking about this moment we're in right now with streaming, and at the same time, what's emerging from this new contract, it's almost like we're going back in a way to that old model of TV and film. You know, the pre-streaming version where big entertainment companies made fewer shows, we paid more, but also the writers got paid more. I mean, the studios would love to go back 20 years ago. The writers would love to go back 20 years ago. But that world is just gone now. Streaming has changed everything.

This technological change has shifted everything. But in the case of the writer, you know, you're never going to make friends money again. But if you do create a big hit on Netflix, if you do create, say, a Bridgerton with this contract, it does set you up a little bit better. You're going to get more money than you did, say, four or five years ago. But what's kind of interesting on the other side of the strike, the studios are over here, the writers are over there,

and they're both kind of just stumbling their way into the future, trying to make this work. Streaming has changed everything. It's upended everything. And both the studios and the writers are just trying to figure out a way to make it to the other side when all of a sudden streaming is all that exists and cable television really doesn't exist

or network TV doesn't really exist, that they both still are around. Writers are still writing and the studios are still making new TV shows, new movies. So the contract, in a way, is pushing our, you know, adolescent, rambunctious streaming out of the house. Streaming goes to college.

John, thank you. Thank you for having me. On Tuesday night, the Writers Guild of America made the details of its deal with the studios public for the first time. It included major concessions on how the writers are paid, including royalties for overseas viewing. It also guaranteed that the studios will not use artificial intelligence to rewrite original material. The union's 11,500 screenwriter members are expected to approve the three-year deal in a vote that begins on Monday. We'll be right back. Here's what else you should know today.

The legal troubles of former President Donald Trump deepened on Tuesday when a New York judge ruled against him in a civil case filed by New York State Attorney General Letitia James. filed by New York State Attorney General Letitia James. James had accused Trump of fraud for inflating the value of his assets and seeks millions in damages. But the surprising court decision granted one of the biggest punishments James sought, the cancellation of business certificates that allowed some of Mr. Trump's New York properties to operate. That could terminate Trump's control over assets that include 40 Wall Street, a family estate, a golf club in Westchester County, and Trump Tower.

The ruling will almost certainly be appealed by Trump. And the Federal Trade Commission and 17 states sued Amazon, setting up a long-awaited antitrust fight that could alter the way Americans shop online. In the 172-page suit, the federal government accused the e-commerce giant of protecting a monopoly over swaths of online retail by squeezing merchants and favoring its own services. The suit alleges that the retailer's tactics made it impossible for its rivals to compete. Finally, Ukraine acknowledged that there might be some uncertainty

surrounding its claim that Russia's Black Sea Fleet commander was killed in a strike on Crimea. Kiev said that it was, quote, clarifying whether Viktor Sokolov had in fact been killed. On Tuesday, Moscow released a video purporting to show the admiral alive. Today's episode was produced by Shannon Lin, Summer Tamad, Sydney Harper, and Rochelle Bonja. It was edited by M.J. Davis-Lynn with help from Michael Barbaro. Contains original music by Marian Lozano and Will Reed.

And was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Lansford of Wonder League. That's it for The Daily. I'm Sabrina Tavernisi. See you tomorrow.