After months of negotiation, the Writers Guild of America did not reach an agreement on the salary adjustment with Hollywood studios, such as Netflix, Paramount +, NBCUniversal, Apple, WBD, Amazon, Sony, and Disney, and the result is STRIKE. That’s right, for the first time in 15 years, work is paralyzed.
There are around 11,500 unionized writers and the dispute is both salary and contractual, calling for structural changes in the business model currently in use. The main argument is that, with the boom of digital platforms, screenwriters suffered financially because projects became shorter, directly interfering with residual payments, because, to give you an idea, in times of linear TV, a common series season would have at least 20 episodes, which brought annual stability to the writing team involved. Currently, the volume has been reduced to 8 or 12 episodes, as well as fewer seasons, so average salaries have dropped accordingly.
According to the union’s calculations, the drop represents up to 23% in the average salaries of screenwriter-producers in the last 10 years. That’s why one of the parts of the current demand that ended up leading to the strike is the hiring of a certain percentage of writers for a certain period, “whether they are needed or not” for the season. Writers’ quota, in other words.
Perhaps one of the most sensitive issues is the formula for residual and royalty payments (Residuals are fixed rates negotiated by Unions and royalties are negotiable on a case-by-case basis). 10 years ago, before the streaming boom, in addition to wages and demand for long runs, writers also received residual payments when the show was licensed or offered for sale on DVD/Bluray. This market is stagnant and getting smaller precisely because of the supply of global platforms such as Netflix and Amazon. As they do not open the view numbers and the calculation formula to measure the specific consumption of each content would be complex, they started to pay a fixed residual value, comparatively lower. In general, writers with names mentioned in the closing credits earn about 1.5% of a screenplay’s total gross.
In streaming or Pay TV, according to the WGA, exhibition and rerun residuals maintain fixed values, but those that come from revenue (license fees, etc.) follow a different formula because they take more factors into account. Let’s see: residual values are paid annually and are recalculated as the program ages, reaching a fixed level of 1.5% after 12 years. What determines the final value of the fixed residual is the duration of the program (Base Residual), the size of the service when the program was written (Subscriber Factor), and the year of airing (Year of Airing %). If the platform operates internationally, as is the case for almost all platforms today, there is an additional annual payment for international reuse, which is 35% of the domestic payment for each year. See the calculation for American screenwriters here, if you’re curious.
But back to streaming because this is where one of the most difficult points in the negotiation is. Currently, the percentage is determined based on the number of subscribers on the date the agreement is closed, valid for 12 months, without readjustments even if the total number of subscriptions changes during the period. What’s more, it “applies to residual calculations in subsequent years, even as the service grows,” the website explains. That is, in the years of the pandemic and in which subscriptions boomed, it did not change the total amount paid for waste to screenwriters. “The initial compensation covers 90 days of use on a streaming platform with 1 million domestic subscribers or more. For services with less than 1 million domestic subscribers, the payment covers one year of usage. After this initial window, residuals are due for each 12-month period of service availability,” explains the WGA.
And it’s not just a financial issue, but a part of creation as well. The recent practice of “minirooms,” in which groups of writers work on a script basis even before the show is approved, is also the subject of complaints. Some argue that screenwriters earn less and do not participate in the production process afterward, losing an opportunity for professional growth. “Companies have used the transition to streaming to reduce writers’ pay and separate writing from production, worsening working conditions for series writers at all levels,” the Writers Guild argued in a March 14 bulletin. , entitled “Writers Are Not Keeping Up”.
Without necessarily being the last issue, the big current fear is also the use of artificial intelligence for texts. The union wants a commitment from studios not to use technology to rewrite scripts from human input or to ask screenwriters to rewrite drafts of scripts created by AI.
The Alliance of Motion Picture and Television Producers (AMPTP), which represents the studios, says there was a “generous compensation” proposal to screenwriters, but apparently, insufficient. With the “villains” of the hour – the economy in recession, AI, and streaming – the market is under total pressure, with open TV suffering even more because with the evasion of the public there was a drop in ad revenue, something that has not yet returned to the mainstream. pre-digital balance.
Who “profits” from the dispute? The international market is a tortuous way. Netflix, which for years has had a global focus, access to production facilities outside the US, and foreign content being prominent (Casa de Papel, Round 6 were recent phenomena and both are foreign), can “survive” almost without affecting its library.
And now? Let’s follow up!