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Hollywood Scores Own Goal as Studio Bosses Prepare for the Coming Era in the Global Streaming Wars
I don’t think anyone disagrees that creatives should earn more from their work. What I find interesting is that AMPTP has been saying the business model of residuals is broken (for a long time now). If a movie project is purchased by Netflix or Disney for streaming, it is purchased. The writer isn’t forced to sell the rights to them. He chooses to. He gets paid, movie gets made and seen, and the writer moves on the next. If Netflix then sells rights to another streamer, for theatrical, etc then the writer should get a percentage of that extra income (royalties, residuals, whatever). Netflix says they can’t provide the data to track that. BS, of course. But it comes down to what rights the writer signed away and what he kept. No one forces them to sell to Netflix. If the project is good, they would have other choices. If not …
with all due respect, I disagree entirely. These strikes have happened because the major studios and streamers have tried to change the business model that writers and actors have depended on for their livelihood – a profit share based on the success on the content they create. The streamers refused to do this using the excuse that their success metrics are highly confidential. And the studios then jumped onto the same bandwagon, trying to us the same excuse for content shown on their streaming platforms. Scarlet Johannsen sued Disney over this and they settled with her for a large amount. Independent content producers – even the biggest TV production companies, some of which are owned by major studios, are facing exactly the same problem – their business model is based on earnings from profit shares. And without a profit share, there’s no incentive for an equity investor either. Without the creators – and I very mush include producers in this – there is no content. I expect the studios to back down and settle eventually (i’ve heard that many of them want to but Netflix and Disney are entrenched).
ARTICLE AUTHOR
Dear Gavin. Do we really disagree?
You make a correct point that Writers and Acting talent have legitimate, material grievances. The disparity in revenues is egregious; some might say obscene. The licensing terms being offered by Netflix and others are a major contributor to that disparity. Residuals formed the essence of deals with talent in the age of Television. But the internet broke that. This was the basis of the WGA’s last strike in 2007, in which now President of AMPTP Carol Lombardini stated clearly their position, “… that that business model is obsolete.”
Strike action is the obvious union response to failure of AMPTP to offer a new business model.
This is touched upon in the article, but not the point of the article.
The point of the article is that the “Studios” have a very different agenda than the members of either WGA or SAG-AFTRA. That agenda is to break with the “old” LA-Centric Hollywood and build a “new” global Hollywood.
The historic WGA/SAG-AFTRA strikes offer additional international corporate rationale for doing just that.
To maintain power, or at least wield influence, the Old Guard unions might consider getting ahead of this movement, figuring out a more equitable business model and getting involved at the shareholder level, where the real decision-makers are shaping the future.
it doesn’t much matter if the Studios want to build a new global Hollywood, though i’m not convinced they do. They still have to pay the content creators properly. This isn’t an industry like electronics where manufacturing can be done in Asian countries where labour is cheap. Even in electronics, creating and owning the IP (patents rather than copyrights) is where the money is, hence the massive stock values of Apple, Microsoft etc.. The difference in electronics is that the actual IP creators are generally very well paid for their work. The internet is merely a new delivery system, and the move to try and replace unit sakes with subscription revenue isn’t really all that new – many businesses are trying this now, some very successfully (i.e. most software companies). But to use this as an excuse not to share profits at the same time as paying senior executives tens of millions of dollars is, quite frankly, despicable