The Strike is Dead; Long Live the Strike!
It was a hot show biz summer – and while fall has already come, the labor summer is not over in the States. Even though the Writers Guild of America (WGA) announced that it has reached a preliminary labor agreement with major studios on the threshold of the changing seasons (the term of the new agreement is September 25, 2023 through May 1, 2026 with its estimated value being $233 million per year and it is yet to be ratified by WGA members in early October), the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) is still looking to negotiate its own deal with The Alliance of Motion Picture and Television Producers (AMPTP).
“We feel great. We won,” said WGA West President Meredith Stiehm in an interview.

Analyses on the matter are pouring but one thing is crystal clear: viewers around the world are winning, since content production is expected to resume shortly, with late-night talkers returning first while scripted is still waiting for the “other” strike to end. Not that viewers felt the strike that much just because of the sheer volume of content out there. But do they really need 600 new shows every season? Not really. And will they continue to see subscription prices increase? Most definitely yes. So, are they really winning?

Another winner, paradoxically being one of the main points of contention, is artificial intelligence (AI) because it got such a publicity boost and mainstream coverage due to the strikes that even the least tech-savvy people became familiar with its potential usage in entertainment.

The WGA announced that the major wins are in terms of pay increases and AI. The pay increases are significant with notable increases for “high budget subscription video on demand” and streaming films. Essentially, the WGA got what it has been demanding from the start when it comes to AI: AI will not be able to write or rewrite literary material, and AI-generated material will not be used as a source material. In other words, an exec won’t be able to ask ChatGPT to come up with a story and ask writers to turn it into a script that the exec owns the rights to. The WGA also “reserves the right to assert that exploitation of writers’ material to train AI is prohibited by MBA or other law.”

The guild announced that it won guarantees of minimum staffing in writers’ rooms, a key issue for many of its members. Staffing will be determined by the number of episodes per season. Minimum pay rates will climb by more than 12% over three years. Also, residuals will rise for the use of TV shows and movies outside of the United States and a bonus will be awarded for the most popular shows on streaming. Among the bigger wins is also the ability to share in the success of content that performs well on streaming services like Netflix or a residual payment based on viewership, which will be calculated by hours streamed and runtime.

In a major development for the industry, following the deal, studios now will have to provide the WGA with actual data. Specifically “the total number of hours streamed, both domestically and internationally, of self-produced high-budget streaming programs.” Netflix, Disney+, Amazon, and the other streamers won’t be able to come up with weird metrics or meaningless self-referential rankings to give to the WGA. The numbers the studios provide may be subject to NDAs—so the general public won’t necessarily have access to those metrics. Yet the WGA will still be able to release data in aggregate, giving us a much more nuanced and revealing look at the business of streaming than anything we’ve had before.

For those interested in numbers and technicalities, the full list of WGA wins is available on their website.

But what did the studios get? A drop in their share prices but, at the same time, the strike did provide a short-term financial benefit for the companies. Paramount Global, Disney, Amazon Studios and others saved hundreds of millions of dollars that otherwise would have been spent making and marketing shows, LA Times notes. For some of the traditional companies, the savings boosted their stretched balance sheets, which they use to impress Wall Street, in an otherwise challenging year. On the other hand, Warner Bros. Discovery is predicting a $300 to $500 million loss this year due to the WGA and SAG-AFTRA strikes (if they don’t end by the end of the year).

Another “win” for the studios is the fact that, as Newsweek pointed out, original writers on older cable and network TV projects that have subsequently aired on streamers will remain uncompensated by the newer platforms. An example of this is the legal drama Suits, which has been a hit on Netflix globally and is also available on NBCU’s Peacock, after having initially premiered on the USA Network. “Broadcast hits like Grey’s Anatomy, Supernatural and NCIS have also been mainstays on Nielsen’s streaming viewership charts thanks to their popularity on streaming services, often racking up millions of viewing minutes per week and outperforming viewership for streamers’ new original shows. This part of the agreement could lead to a scramble from streamers to license other cable and network shows, as their anticipated success on such platforms would not lead to payouts to the original writers,” the magazine claimed.

Studios are not expressly prohibited from using AI to generate content. Writers, however, have the right to sue if their work is used to train AI. The producers also agreed to meet at least twice a year with the guild to discuss plans to use AI in film development and production. Will it be enough? “They spent months trying to craft words to protect writers from AI and they ended up with a paragraph that protected nothing from no one,” according to media mogul Barry Diller, former CEO of Paramount Pictures and founder of the Fox Broadcasting Company. “Fair use needs to be redefined, because what they have done is sucked up everything and that violates the basis of the copyright law. All we want to do is establish that there is no such thing as fair use for AI, which gives us standing.”

The Breakthru
As THR noted: “After about a month where talks were at a standstill, progress accelerated starting Sept. 20, when the two sides got back to the bargaining table at the AMPTP’s Sherman Oaks headquarters with major industry leaders (Disney’s Bob Iger, Netflix’s Ted Sarandos, Warner Bros. Discovery’s David Zaslav and NBCUniversal’s Donna Langley) attending. With top leaders in the room, the studios made changes to their position on issues like minimum staffing in television writers’ rooms and rewarding writers for the success of projects on streaming. Regulations on artificial intelligence proved to be a lasting sticking point, but the two sides eventually came to a compromise by Sunday night. In its communication to members about the agreement on Sunday, the WGA called the resulting agreement “exceptional.”

What Happens Next?
SAG-AFTRA and AMPTP remain divided on similar issues like wage increases, a proposal to give union members a cut of platform subscriber revenue when their streaming projects succeed and regulations on AI, among other issues. Even with the writers back at work, production cannot resume in any meaningful way without performers. Multiple insiders note that if SAG and the AMPTP don’t reach an agreement in the coming weeks, with a contract ratified in October, then production start dates would be pushed back several more months. “Once you’re in October, it’s unlikely any studio will start producing between the window of Thanksgiving and Christmas. It’s too expensive,” said a former network boss quoted by The Hollywood Reporter. “They’d start in January.”

Then there will be the competition which productions will resume (or start) first. “If you have movies and shows with less than three to four weeks left, now you’ve got people on crews being offered shows for 20 weeks or 30 weeks, and it becomes hard to hold on to them.” And, after all, some people have left the TV and film industry for other work. Variety adds: “on the television front, most networks and streamers are focused on picking back up with long-running shows and big-budget freshman series that were in preproduction or already shooting, rather than developing anything new. That’s because they won’t have to put in as much time filling out writers rooms or casting new roles. Instead, especially for shows many seasons in, they can reassemble the same ensembles and creative teams and get back to work relatively quickly.” TV development budgets for 2024 are expected to be greatly pared down as the studios work through the backlog after the five-month strike pause, the publication added. ′
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