The Daily - How Streaming Hurt Hollywood Writers

Episode Date: May 5, 2023

This week, thousands of writers went on strike against Hollywood studios over what they say is an existential threat to their livelihoods.John Koblin, a media reporter for The New York Times, explains how streaming turned the most prolific era in American entertainment into an industry-changing labor dispute.Guest: John Koblin, a media reporter for The New York Times.Background reading: The dispute, which pits 11,500 television and screenwriters against the major studios, has shattered 15 years of labor peace in the entertainment business.In the years since the entertainment industry’s last strike, sweeping technological change has upended the television and movie business.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

Hey John, how are you? Good, hi. Hi, nice to meet you. Nice to meet you. Claire, nice to meet you. Not digitally. Alright, I mean, let's get started. No writers, no TV.

No writers, no TV. No writers, no TV. I'm John Koblen, I cover the television industry at The Times. We are about 13, 14 hours since the Writers Guild of America called for a strike. This is the first picket line. We're in Midtown Manhattan outside. I see a writer from Jimmy Kimmel right there. Outside the NBCUniversal Peacock New Front,

which is sort of this event that they throw for advertisers. And it'll be the same thing in L.A. later today. Sorry, if folks could continue to back up, please, to make room. I'm not tall enough to see all the way down, but it's almost going all the way up from 37 to 38. They're basically taking up the entire block at this point. I need you guys to go all the way to the corner unless you're on the line. There's a sign that says no scripts for you, like the Jerry Seinfeld.

Live from New York, on strike. I think it said something like pay your workers or we'll spoil succession. That's pretty good. From the New York Times, I'm Sabrina Tavernisi, and this is The Daily. We write for Late Night with Seth Meyers. I created the show Dope Sick, and I'm the co-creator of Empire. I'm with The Daily Show. Also The Daily Show.

Tell Me Why is for three women, which started at Showtime and is about to premiere on Starz. This week, thousands of writers went on strike against the Hollywood studios. Can you tell me why you support the strike? These companies are absolutely destroying our industry. They're making it impossible for young writers to make a living. Over what they say is an existential threat to their livelihood. I moved to New York to become a comedy writer and performer and producer, and for so many years I did that, and now I wonder,

is it not possible to have a middle-class lifestyle doing this? Today, my colleague John Copeland explains how streaming turned the most prolific era in American entertainment into a fight that's brought Hollywood to a standstill. Everyone watches TV. Everyone watches movies. Everyone consumes this. Pay us fair wages. It's Friday, May 5th. So, John, the writers in Hollywood are on strike, first strike in 15 years. Tell me what's happening.

So, earlier this week, 11,500 TV and movie writers announced they're going on strike. Much of Hollywood's production is going to grind to a halt. The writers are represented by the Writers Guild of America, one of the most powerful unions in Hollywood. And basically, they're fighting about one thing with the big Hollywood studios, money. Despite the fact that television production has exploded in the last decade, the WGA, the Writers Guild, they've said that writers pay has stagnated. And they've been saying for weeks that this moment is existential. They say the system is broken. And it really has to do with how this industry has changed dramatically in the last decade. And it all has to do with streaming. Right. We live in a world of streaming now, right?

There's no more rushing home to watch Seinfeld at 8 p.m. It's streaming The Handmaid's Tale 10 episodes at a time. So I watch them all like I'm eating a piece of chocolate cake on a Saturday. But you'd think that that would mean a real golden age for writers. So what happened? In today's busy world, going to the video store is a hassle. So let's go back to 10 years ago. Return one in this prepaid envelope and they'll automatically send you another movie from your list. Netflix basically back then was known

primarily as a DVD company. Right. But they had a streaming service at that point that was four years old. And Netflix executives were pretty convinced that watching TV and movies over the internet was going to become a thing. So it was time for them to get into original series. It all started with House of Cards, the big original show from Netflix,

which premiered in 2013. For those of us climbing to the top of the food chain, there can be no mercy. There is but one rule. Hunt or be hunted. Starring Kevin Spacey from the director David Fincher. Like Hollywood royalty at the time. I remember it well. There are two kinds of pain. The sort of pain that makes you strong or useless pain.

The sort of pain that's only suffering. And it was weird, right, that Netflix was making a TV show. Like, Netflix is basically the post office. They sent you those little red DVD things. Completely. It was crazy. And I'll never forget watching House of Cards for the first time, where all 13 episodes of that first season were available. Yeah.

So it was 10 o'clock, 11 o'clock, midnight, one in the morning. Suddenly, I just burned through four episodes. It was such a crazy concept. Yeah. So the show was a huge hit. And it also changed everything. It proved that watching a television show over the internet could work, and it caused a shift in the industry,

which fundamentally changed the way that writers work, and it changed the business for the studios, which has led us to this moment. So let's talk about that. How did streaming change the industry, not just for us as viewers, but also for the people making these shows. So production has really, really changed.

Think back to the 1990s. You hide my clothes, I'm wearing everything you own. You've got friends. You've got ER. Dr. Ross. Yeah. A, B, and a four. You've got Seinfeld. Salsa is now the, B, and a four. You've got Seinfeld. Salsa is now the number one condiment in America.

Do you know why? Because people like to say salsa. And a season would be more than 20 episodes. And if you're a writer staffed on a show like that, a network show, you were taken care of. That was your career. care of. That was your career. But in the streaming world, now that we've got those movie stars who like shorter commitments, we've got seasons that are eight, nine, ten episodes. Do you speak English? No. No English? Did you watch The White Lotus a few months ago? Please, No, I'm pleased.

Did you watch The White Lotus a few months ago? Please, these gays, they're trying to murder me. Oh, I was desperate too. All my friends did. I didn't actually because I was working too much on the daily, but I plan to. That was seven episodes this past season. The first season was six episodes. So with these shorter seasons, the writers are sometimes working as little as 10 weeks. Wow.

And then they're left scrambling to find another job. So they have said that this is untenable, and it's affecting everyone. It's affecting totally decorated showrunners and writers just getting their foot in the door. So it sounds like everything is just much less stable for writers. Much shorter seasons, just a few months or even a few weeks, versus a whole year or several

years, which means by definition, less work and more scrambling. Yeah. And, you know, it has benefited the studios to the extent that it's created a more efficient structure for how they produce these shows. But the writers think that there could be long term consequences to this. I recently interviewed Mike Schur. He's the co-creator of Parks and Recreation and the creator of The Good Place. And he really is worried about the future because he gave me an example. When he was a young writer on The Office,

he said he learned how to write a script, rewrite a script. He learned about editing. He learned how to work with actors on set. He learned how to scout a location. And then he became familiar with specialized crafts like sound mixing and set design. He learned how to make a TV show, essentially. But Mike Schur says that with the current system, writers are only writing. They are gone after those 10 weeks, and they're not even invited into the production process. Okay, so the writers are saying this is also bad for career development. Like, they're a cog in a machine instead of an apprentice learning how to make the machine.

Yeah, they say it's bad for their careers, but on top of that, it's bad for the industry at large. So he thinks there could be a future where writers are going to be asked to be showrunners and to create a show, and they could have a lot to say about the world, and they could be fantastically talented, but they're not going to know how to do it,

and that could be a long-term problem. And the other way it's bad for the industry, I mean, think about how it was done 20 years ago. If you're watching network television, you just bought a TV, you turned it on, and it was free. A cable network, you paid your cable bill automatically every month. Right. But these streaming services, they're subscription-based services. So you are paying every month for your Netflix account.

In fact, I remember when Netflix used to advertise proudly, cancel us anytime. We've got it right at the top of the website. If you're not, please, you can cancel us. Easy in, easy out. Easy in, easy out. But the problem is some people are taking them up on that. And that's true of all the streaming services. So you need a ton of fresh content to keep them subscribed. And maybe this is obvious for people, John, but like, why exactly was that? Like, why did they need tons of content? To keep these people hooked, to keep their subscribers hooked. I mean, consider how much Netflix is shooting at you every single week. There are reality shows, movies, TV shows, foreign language shows, and now they're not alone. Here it comes, it's finally here.

The streaming wars are hitting the high gear today. In 2019, Disney Plus is launching. Disney started its streaming service, Disney Plus. Apple has unveiled its new streaming service, Apple TV Plus. Apple TV Plus started like within a week or two of Disney Plus. Apple will produce original content for the platform, and it's expected to bring new competition for existing sites like Netflix. Shortly thereafter, HBO Max launched. And you can watch shows like Game of Thrones and Friends or movies like Wonder Woman and The Wizard of Oz. And then...

The peacock has hatched. Peacock launched. I know I personally cannot wait to binge watch all 17,624 episodes of The Today Show. So you have all these streaming services and they're all competing with each other and it's created this sort of arms race. And as a result, the number of shows just exploded. I mean, last year, there were something

like 500 scripted shows in the United States. Ten years ago, that was something like 250 or 300. Oh my god, that's amazing. So it's just, it has blown up, but it's also created opportunity. There are more diverse shows, shows that just wouldn't have been made 10 years ago. Look at you, blondie, what'd you do? Orange is the New Black, a show about a women's prison. Hi, I'm Daphne Sparkles. Transparent, which featured a transgender character. It feels like I'm the only one who's putting in any effort. By inviting me to brunch? Insecure from Issa Rae, a show focused on black female friendships. Can I just please get a kid's meal?

Or Atlanta from Donald Glover or Fleabag. Your headache's nice. Shut up. Oh, love Fleabag. That's something that would never have gotten made 15 years ago. So you're trying to program to every conceivable demographic. So there was a lot more opportunity, and that's great creatively, but the writers have said that the economics just haven't been working.

We'll be right back. So, John, we've talked about how streaming has changed the way TV shows are made. But what about the underlying business? Has it changed how the people who make these shows, including the writers, make their money? So it's upended the economics, really, in how both sides make money. the economics, really, and how both sides make money. So one of the things that the writers are fighting for in this dispute is better residual pay. That's a type of royalty. In the old model, with success, a writer would get a lot. So the Big Bang Theory, that was a show on CBS. If you're flipping through channels and you see it on TBS, it's in syndication. That's like a rerun.

So if you wrote an episode of a popular show and it goes in a syndication, you could potentially make a pretty decent amount of money off of episodes you wrote. You'd like just get a check in the mail. Or if the production company, which was Warner Brothers in this case, sells it overseas and suddenly you're in Ireland watching The Big Bang Theory. You just get a check in the mail. And this really helped writers, if you lose your TV job because shows get canceled all the time, you can take a minute before you find your next job. Maybe you want to create a show. Maybe you want to write a movie script. They argued that those residual payments would keep you afloat. It was sort of a critical source of income for the middle class writer. Okay, crucial economic lifeline in the before days. What about now?

So now they argue that everything has changed because if you are in Netflix or you're in Amazon, there are no distribution arms. You're not putting shows into syndication. You're not selling them overseas. They're global streaming services. no distribution arms. You're not putting shows into syndication. You're not selling them overseas. They're global streaming services. Now, the Netflix and Amazons pay sort of a fixed residual. Writers are arguing they're making less money in sort of the afterlife of a show, after it has been on the air. John, from what you're describing, it really sounds like the studios are in this kind of defensive crouch over money,

which is kind of weird because streaming is the way everybody watches TV now, right? Like these streaming companies have millions of subscribers, and at least the people I know, they subscribe to more than one. So why are they behaving like they're strapped for cash? So why are they behaving like they're strapped for cash? Well, the studios would actually argue that they did a lot better in the before times, in sort of the cable model. The cable bundle used to kick off so much money.

I mean, we've been talking about canceling streaming services and how easy it is. You might remember how difficult it was to cancel. Oh my gosh, do I remember? Yes. They would try to negotiate with you. They would convince you out of it. You would be on the phone for 45 minutes. Forget it. Just keep the cable bill going because you'll never cancel it. So it was a great business as a result.

But the economics of streaming has made things much crazier. The technology is really expensive. The marketing is really expensive because there's so much competition. You want to get your billboards out there. The shows are way more expensive. I mean, 20 years ago, 10 years ago, a CBS drama could cost $3 to $4 million an episode. Now studios are investing $17, $18, $19 million an episode. That's close to 200 million dollars a season. Huge. It's a huge amount of money. So these streaming services are not making money. Most companies are actually losing a lot of money on them, like more than a billion dollars a year.

But that was okay because the profits didn't really matter. All these companies wanted to do, at least as of two years ago, was just grow their subscriber base. So it was okay to lose money. So kind of like Uber and Lyft in the early days, right? Just like compete, compete, compete for subscribers, for market share. And, you know, if you made a loss, that was okay because your main goal was to get market share,

corner the market. Exactly. And think of how cheap Uber or Lyft used to be just for the consumer as well. And that was the case with these streaming services. Right. But then things changed. It just keeps getting worse for Netflix. Last April, April of 2022, Netflix lost subscribers for the first time in a decade.

The cost of living crisis has led to belt tightening with families across the world looking at streaming services as a potential saving. And then all of a sudden, everybody on Wall Street, everybody in entertainment said, uh-oh, how did that happen? And what they sort of realized is that

finally maybe we're hitting sort of peak Netflix. Peak Netflix. Investors fearing the streaming market is saturated. Netflix, they had saturated the American market. Everyone who's going to subscribe has largely subscribed. It's just about sort of keeping that base loyal. There really aren't that many more subscribers to find in the U.S. And now the company is considering some major changes.

And this kicked off what many in Hollywood have called the Netflix correction. In recent months, Netflix has had to change course and cut costs, from laying off hundreds of staff to cracking down on password sharing in some regions by charging additional fees. That's when Wall Street changed its mind about the growth-at-any-cost strategy of these media companies.

That's when they said, we need to see these streaming services turn a profit. We cannot see you losing a billion dollars a year. And the fallout from that over the last year has been brutal. Disney is looking to find $5.5 billion in cost savings. Disney is in the midst of 7,000 job cuts. CNN starting a new round of layoffs just months after shuttering its CNN Plus streaming service.

Warner Brothers Discovery cut thousands of jobs last year and also shelved titles. Yeah, another disappointing quarter for Paramount. If we take a look at the numbers here, revenue coming in. And other companies like Paramount or NBCUniversal, they've also adopted these cost-saving measures. they've also adopted these cost-saving measures. So again, similar to Uber and Lyft, at some point investors said, profits are important, make them.

So given that, in this situation, can the companies afford what the writers are asking? Well, shortly before the strike was announced, the studios said that they actually did offer quote, generous increases in compensation for writers as well as, quote, improvements in residuals. But the studios also said that there were just too many other outstanding issues on the table. I talked to one of the negotiators on the writer's side, and he told me the night the strike was announced that philosophically and practically the two sides are very far apart. So, John, all this brings us back to the deadlock where we still are and maybe for some time. What's the immediate effect of it?

So daily shows, shows that are made every day, like late night shows, they've gone dark. So no Stephen Colbert, no Seth Meyers, no Jimmy Kimmel. They are all sitting this out. They're all WGA members, and there will be no new shows for the foreseeable future. Saturday Night Live, also off the air, and they might not be able to have their season finale. Soap operas, they will run out of episodes within a few weeks, maybe a month. Longer term, it would take a while. I mean, there are a lot of shows that are in the can, and there are some shows where all the scripts are done and they can keep filming.

However, if it's a really long strike, if a strike lasts several months, viewers could start to notice fewer new TV shows by the end of the year or early next year. And that might mean more unscripted series. In the past, when other strikes happened, there have been several, the industry has adapted in interesting ways. For example, during the 1988 strike, which lasted five months, that's when Fox programmed cops because it needed unscripted programming. Oh, funny.

I didn't realize that. And during the 2007-2008 strike, that's when NBC decided, is there something we can do to shake up The Apprentice? And that's when NBC executives came up with Donald Trump's The Celebrity Apprentice. Funny. Funny. Like necessity is the mother of invention. You don't have writers. Yep. You do reality TV.

Funny. Like necessity is the end of June. So that could either complicate the writers' strike, that is, those two unions make a deal and kind of undercut the Writers Guild, or they decide their working conditions have been upended by streaming, and then suddenly we have three unions on strike at once. So like a 10-car pileup of strikes, basically. That would really be like a disaster. That would be catastrophic for Hollywood. about professional writers in Hollywood, right? Like educated people, basically pretty much fine in the workforce, no? I mean, like in some sense, world's smallest violin, no? Right. Well, I mean, from the writer's perspective, there's a distinction between the big established names, the Shonda Rhimeses, the Ryan Murphys, the multimillionaires, versus the working writer trying to get their foot in the door,

trying to craft a career. And also, a prolonged strike has the potential to affect a lot of people in the industry, not just writers. The last time there was a strike, 15 years ago, it damaged the Los Angeles economy by an estimated $2.1 billion. Oh, wow. What was that made up of? So there are so many small businesses that help keep productions afloat. That includes drivers,

costume dry cleaners, caterers, set carpenters, lumberyard workers. The whole ecosystem of movies. Exactly. And a lot of them will soon be out of work, especially as Hollywood production gradually grinds to a halt. And they've just regained their footing out of the pandemic. So that really increases the stakes of a strike and could potentially lead to some community fissures. So, John, I'm left kind of wondering at the end of our conversation, you know, what this fight over streaming has showed us. Has it shown us that we as consumers of all this content were the winners, but it's a much murkier new world for the studios and the creatives? Is this the end of the era of amazing television?

Not necessarily. We're not going to see the days of 500 scripted shows anymore. But good TV and good movies, they've been around for a long time. And if you think of the times when the writers have gone on strike before, many times these occurred at sort of these inflection points because of big technological shifts. In the 1980s, you had the rise of cable TV and the rise of a home video. In 2007, during that strike, think of how we were consuming content back then. You still bought DVDs, but you were also starting to do it digitally.

You were renting shows. You were downloading shows off of iTunes, right? YouTube at that point was only two years old. And now here we are at yet another technological inflection point. But we still have TV. We still have movies, like really good ones. It's been about a decade since the streamers have become ascendant. But we're still in the early days of the streaming wars. So there are going to be inevitable skirmishes. This will not be the last

one. But yes, VCRs are gone, cable slowly going away, but TV persists. TV is not over. It's just going to be different. John, thank you. Thank you. We'll be right back. Here's what else you should know today. On Thursday, four members of the Proud Boys, including their former leader, were convicted of seditious conspiracy for plotting to keep Donald Trump in power by leading a violent mob in attacking the Capitol on January 6, 2021. The fifth and lowest level defendant in the case, Dominic Pizzola, was found not guilty on the sedition charges, although he was convicted of other serious felonies. It was one of the most serious cases brought in the attack, and the verdicts were a major blow against one of the country's most notorious far-right groups and another milestone in the Justice Department's vast investigation

of the Capitol attack. And North Carolina hastily approved legislation on Thursday that would ban most abortions after 12 weeks of pregnancy, setting the stage for a likely test of the Republican Party's new but slim supermajority in the state. The state's Democratic governor, Roy Cooper, said he would veto the measure and has 10 days to do so. But the legislature now has the potential to override his veto if Republicans can keep their party united to muster enough votes. North Carolina currently allows abortion up to 20 weeks and has been one of the few states in the South that preserved substantial access to the procedure after Roe v. Wade was overturned last summer. Today's episode was produced by Diana Nguyen, Sydney Harper, Michael Simon-Johnson, Asa Chetravedi, and Claire Tennis-Sketter, with help from Eric Krupke and Muj Zaydi.

It was edited by Mark George and Liz O'Balin, with help from Paige Cowett. Contains original music by Dan Powell and Marian Lozano, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for The Daily. I'm Sabrina Tavernisi. We'll see you on Monday.