Hollywood Production Studios Readies For A Potential Writers Strike

The current Writers Guild of America (WGA) contract with the Alliance of Motion Pictures and Television Producers (AMPTP) expires on May 1. Negotiations to renew are slated to start on March 20. The AMPTP represents 350+ movie and TV producers. Any work stoppage would shut down film and TV production until an agreement is reached. This would be the first screenwriter’s strike since the 100-day work stoppage from November 2007 to February 2008. Prior to that there was a 153-day walkout in 1988. The last contract renewal was in 2020 at the onset of the global pandemic. Variety reports the WGA and AMPTP have exchanged proposals before negotiations begin.

The biggest negotiating issue will be the residual fees as viewing shifts from linear television and toward streaming video. Residuals pay screenwriters for any reruns of episodes or movies that air primarily on broadcast TV. The residual fees screenwriters receive for programs and movies streamed are negligible in comparison.

The potential shutdown is coming at a financially precarious time. Studios are facing pressures from Wall Street as streaming has yet to become a reliable income source. Concerned about their growing debt and a potential recession looming, studios have had layoffs, hiring freezes, slashed production budgets and cancelled or postponed forthcoming programming/movie projects. Nonetheless, media companies continue to invest tens of billions of dollars each year in streaming content while cutting back on the number of original scripted programs on television.

Nielsen’s monthly Gauge report highlights the rapid shift between viewing platforms. In January 2023 streaming video accounted for 38.1{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} share of viewing more than both cable (30.4{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}) and broadcast (24.9{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}). By comparison, in January 2022 streaming had an audience share of 28.9{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}, with cable’s share at 35.6{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} and broadcast’s share at 26.4{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}.

In addition, Peak TV is continuing, last year on broadcast TV, ad supported cable TV, premium pay cable TV and streaming, there was a record high 599 original scripted programming, with a large majority of them appearing on streaming platforms. By comparison, in 2012 when streaming was a nascent viewing source there were 288 original scripted programs.

Moreover, with sports (specifically the NFL) dominating the top-rated shows and the emergence of streaming video, the most watched scripted entertainment show in 2022 was a simulcast of the season premiere of Yellowstone in November. The episode was televised on Paramount Global networks and averaged 12.5 million viewers (live + same day), ranking as the 132^nd most watched show of the year.

Another issue has been with the number of scripted pilots being ordered by the four broadcast networks is dropping. For the 2023-24 season, the four major broadcast networks ordered a record low 13 pilots, with Fox
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not ordering any. Last year, about 30 pilots had been ordered and ten years ago the networks had ordered over 100 pilots. The cutback in original content is also prevalent on cable television. In January, TNT announced the cancellation of Snowpiercer, the lone original scripted program remaining on the cable network.

Another factor has been the reduction in number of episodes ordered each season. Nowadays, streaming platforms order on average between 8 to 10 episodes per season. In the past, broadcasters had ordered 22 to 24 episodes per season. With screenwriters getting compensated per episode, the WGA wants residual payments to exemplify current programming trends. In recent years, residual payments have not been a reliable income source between projects.

Furthermore, despite the cutback in the number of episodes ordered, the time spent writing for a shorter season with its multilayered characters and more complex storylines can be as time consuming as full season order from a broadcast program. Additionally, as studios look to slash costs, they have also been cutting back on the number of screenwriters working on an episode. Hence, even with nearly 600 scripted shows produced last year, it has not been financially beneficial for screenwriters.

The primary issue of the 2007-08 screen writer’s strike was royalty payments of DVD sales from TV programs and the rebroadcasts of content on the web and other “new media”. This time, with the potential of a writer’s strike looming, DVD sales have been declining, in part from streaming video. According to the Digital Entertainment Group, in 2021, DVD and Blu-ray sales totaled $1.97 billion, a year-over-year decline of nearly 20{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}. Furthermore, at the time of the 2007 screenwriter’s strike, DVD players had a U.S. household penetration of 84{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}, it has since fallen to 55{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896}.

Back in 2007-08 with production halted, ratings for the broadcast networks dropped (especially with younger audiences) as the networks relied on a steady diet of TV reruns, theatrically released movies and unscripted programs. The 2008 Golden Globes Awards, billed as a Press Conference, aired on NBC and averaged 6.0 million viewers, even lower than this year’s anemic 6.3 million. Also, during the strike, websites reported a surge in usage including YouTube and Crackle. DVD sales and video game usage also spiked. The 100-day strike reportedly cost the Los Angeles economy upwards of $3 billion.

The potential walkout by the WGA is not the only labor issue confronting the AMPTP. The current contract with the Directors Guild of America (DGA) and Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) expires on June 30. The DGA has said they also have concerns on the effect recent industry trends are having on their compensation (i.e., residuals from streaming). Negotiations are scheduled to start on May 10 which is ten days after the WGA contract expires.