Inadequate Residuals From Streamers Prompts Writers Block by WGA

February 24, 2023
February 24, 2023 Kate Neale

Inadequate Residuals From Streamers Prompts Writers Block by WGA

Hollywood prepares to survive the imminent threat of another WGA lead writers strike

As the explosion in screen content continues unabated, the WGA (Writer’s Guild of America) and the AMPTP (Alliance of Motion Picture and Television Producers) are back at the negotiating table wrestling with how writers should be fairly rewarded as their work is monetised through different distribution channels.

The Minimum Basic Agreement (MBA) is a contract negotiated every three years between the WGA and the AMPTP. The Agreement determines the terms and conditions for union talent to be engaged in production and covers entitlements around basic minimum wages, health care and pension contributions.

Negotiations can be contentious, and the last strike in 2007 lasted over 100 days and cost the LA economy an estimated 1.5-2 billion dollars, and it seems another might be looming.

That strike sought protections for writers and their work as it applied to new media (streaming). After negotiating improved fees on royalties paid on DVDs in the previous strike, that market sector has since crashed, leaving the rates paid for streaming versus traditional in stark contrast. With the explosion of content and distribution channels, the parties are now negotiating to bring the fees paid (streaming residuals) to a writer when an episode for TV or movie they have worked on is aired, in line with traditional residuals.

While the WGA certainly has members’ best interests at heart, it’s questionable how beneficial a full-blown strike would be on this occasion, given the buying power and international production alternatives streamers have in this era. That said, the producer members of the AMPTP do need to recognise the fundamental right of the creators of the stories they produce to be suitably rewarded within the new monetisation models that streaming operates.

Whether the work is to air on FAST, AVOD, TVOD, BVOD or whatever VOD, the MBA will need to reward the associated writers fairly for their work, as well as accommodate emerging trends that will be increasingly affected by advertisers’ infiltration of the content produced and the technology impacting the content production and distribution alternatives eg. AI generated components, niche channels, walled, member or personalised distribution via hyper-ledger facilities, and other paid to view options on offer to consumers.

Streamers who are looking to offset competitive forces on their bottom line are seeking to lower costs, and reclassifying production categories is one strategy, eg. Content categorised as ‘made for TV’ pays writers lower residuals compared to a ‘feature film’, which can have the effect of writers doing more work while being paid less.

If the WGA and AMPTP don’t reach agreement by midnight on May 1, which is when the current MBA expires, for union members of the WGA and the 350 film and television producer members of the AMPTP, a writer’s strike would mean they cannot continue to work on existing projects or begin work on new projects after May 1.

Being hired or hiring ‘non-member’ wBesides being unethical, this is known as “scab” work and can result in penalties for both the non-union writer and the studio or producer who hired them. If caught, the writer may be ineligible to join the Writer’s Guild of America in the future, and the studio or producer may be subject to fines or a boycott. In some cases, the Writer’s Guild of America may even blackball the studio or producer, cutting off their access to Guild talent in the future.

In 2023 this initiative is a serious threat to producers and the continuity of production for existing projects, but it’s also a serious threat to writers who could be replaced by writers from offshore or outside the union to begin work on new projects, especially those put into production outside the US.

The paid steps covered by WGA minimums are: Treatment, First Draft, Final Draft, Re-Write, and Polish.

Though the strike is not inevitable, it could profoundly affect the entertainment industry this year, hence the current scramble to stockpile completed scripts and finalise others before May 1 so that the industry can continue to produce if the MBA negotiations are protracted.

The question will be how well-versed the parties to the negotiations are to what a potential future entails and how best to accommodate the interests of all concerned fairly going forward.

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