A version of this piece was first posted in my free, daily Too Much TV newsletter at toomuchtv.substack.com earlier this week.
I have also added some of the comments I received from readers - both from the writer's perspective as well as the studio side.
To add your comments, simply reply email me at
A NETFLIX EXEC UNOFFICIALLY WEIGHS IN ON RESIDUALS, MINI ROOMS
While nothing is certain, there seems to be a growing consensus among writers and executives I speak with that a WGA strike this summer is almost inevitable. Writers have a long list of what they consider to be "do-or-die" issues and in many cases they aren't wrong. But from the studio side, executives I speak with argue the industry is already tightening belts. So how likely are they to agree to provisions that will substantially increase costs and as a result, lead to more production cutbacks?
I spoke with a senior Netflix executive this morning off-the-record about another issue and as we were wrapping up, the topic of a possible strike came up. This executive deals with these issues on a regular basis but would not be part of the final decision making at the streamer when it comes to agreeing to new terms. This executive agreed to be quoted, but not identified. These comments have been lightly edited for clarity and to preserve some identifiable information:
"Look, I'm sympathetic to a lot of the complaints and some things need to change to keep the industry healthy. But I also am realistic about we can and can't change. Take short seasons. For us (Netflix) and for most other streamers, eight episodes is the new norm. Maybe ten episodes. That is not going to change for a lot of complex economic reasons...so then how do all of us make this work economically for both sides?
I am of the opinion that mini-rooms work best for a lot of shows. Streaming services are ordering a lot of shows that are essentially primarily written by one writer and perhaps a very small room. But how can we make that work better for the industry? The money aspect is part of a bigger pay discussion, although I'm sympathetic to the argument that a per-episode payscale isn't viable long-term. But how do we make it better for everyone without blowing up the budget? As it is, we're often shifting writing money into other parts of the production. So we need to figure this out in a way that helps writers make a living without making every show economically unsustainable. I think we can talk about changes in span and make sure writers aren't being hold so long on a project. Those are doable changes that cost money, but not the entire bank.
I'm also sympathetic to the complaints that mini-rooms and extended production schedules mean that writers don't get the same access to the set they would if they were working on a network procedural. I honestly don't know how we work that out. There's no money in the budget for flying someone to the set just to gain some production experience. Or keeping writers around after the room has closed. But we also need to grow the industry's younger writers. Maybe that means more mentorship programs or something we haven't thought of yet.
As far as residuals - or however you want to frame the money - I hear some writers arguing for some sort of an increased residual based on popularity, which is as close to a non-starter as you can find from our perspective. Aside from just the bookkeeping nightmares related to just determining what qualifies as viewed, doing that would be contrary to every other deal we've worked out globally. More transparency is certainly coming, although I am pretty sure it won't be what most people want. But we could end up with a situation closer to what we deal with in places like France and some other European markets. Writers, directors and producers receive a quarterly recounting of the viewing numbers on any program they've worked on that was produced in that specific country. And a residual or bonus is paid based on that. They also agree to receive the viewing statements in exchange for agreeing not to publicly discuss the numbers. And honestly, that has more to do with a fear of numbers being reported out of context than not wanting them to be reported at all.
I also think giving participants access to data such as retention rates or other metrics that fall into the non-production side of the business is problematic....."
READERS WEIGH IN: A NETFLIX EXEC UNOFFICIALLY WEIGHS IN ON RESIDUALS, MINI ROOMS
My piece in Tuesday's newsletter that highlighted a Netflix's thoughts on a possible WGA sparked a LOT of feedback from readers. Some of which is confidential, although that was also all very helpful.
But here are some other questions and comments I can pass along, albeit anonymously:
"One of the biggest problems is the current cost-plus formula used by streamers. That has the streamer paying the studio the full cost of a show from the start, plus a 30 to 40 percent premium. The theory is that the "plus" is supposed to replace money lost because of a lack of syndication money or residuals. But that approach has a lot of downsides and it costs the streamers as much as the talent. Because the "plus" is built on top of the final budget, it encourages a lot of budget bloat and trickery because that's the only way now to make extra money. And since the streamers (particularly Netflix) have structured deals in which the "plus" or other bonuses don't fully kick in until a certain metric is hit - often in seasons three and above - the streamer is encouraged to cancel shows prematurely because it saves them paying out the bonuses.
It's the same reason why Netflix splits animated shows into short "chapters." They're contractually required to up everyone's money after each respective season and they get around that by ordering what is technically one season, then splitting that order into shorter chapters to spread out the episodes and save money."
"We're screwed. There is no way there won't be a strike and when there it is it will be brutal. I wish it wasn't the case, because I work on a broadcast show and we'll get hit harder than anyone."
"I think a lot of writers have the attitude that the 2008 strike was tough but we ended up getting a lot out of the pain. But things are so different now and it frankly scares the crap out of me. The bigger streamers can shift production outside the U.S. and survive okay. And unlike back then, we don't have someone independent like Nikki Finke who can push our point of view to the public. (editor’s note: clears throat) I don't trust the Penske-owned publications that depend on all of that studio money to survive. They're not going to lie for the studio, but the coverage will lean into the studio's direction."
"We are well past the point where we should be accepting less money for a show simply because it's streaming."
"It will be painful, but I think both sides can come together on the overall pay issue. I'm not convinced that there is a workable answer for the demand for minimum writing staffs on shows. How many people do I need on a six-episode show helmed by someone who both created the show and wants to write all the episodes? I get the need to keep people employed and we need more experienced people in the pipeline. But this just feels like a battle that might not be worth fighting for writers, especially with so many other things to fight for this time."
"Span protection is THE number one issue for me and I'm glad to see that it appears to be a priority for most people. Solving that issue will go a long ways towards solving some of the other problems.
