Gordon Campbell on the Hollywood writers’ strike

95e907d478c00bd27386Capitalism has a habit of throwing up business models that disrupt business as usual, but that are not sustainable. Uber for instance, couldn’t provide a cut price taxi service forever, at the expense of its drivers. Sooner or later, they were bound to revolt.

Spotify is another case in point. Since 2018, the business media has had doubts about the viability of Spotify’s business model. That’s mainly because the more Spotify grows its subscriber base, the more money it has to pay to the record companies. Only the ad revenues provide the gravy, and Spotify’s premium rates happen to place a firewall between listeners and the ads that pay the bills.

[Spotify] owns the largest music service in the world. More than 450 million people use it, and almost 200 million people pay for it. Spotify has a much larger share of the audio business than Netflix does in video, and its single biggest competitor (YouTube) isn’t technically in the audio business. And yet, it has lost money every year. None of the other music streaming services turn a profit either. That’s what happens when you pay music rights holders about 70% of your sales in exchange for their songs.

That music streaming mouse-wheel explains why in 2021, Spotify pivoted in a big way into podcasts. It started offering big money for big name exclusive podcasts that already have massive followings, in search of content that it can call its own, and exploit accordingly. However, Spotify’s focus on its big name podcasts is reportedly alienating many of the other millions of podcast creatives that it hosts – and Spotify needs some of these disgruntled creatives to stay onboard if it is going to generate future successes:

Podcasting platforms must attract creators before they can attract listeners (and with them, advertisers), and while Spotify may be the most popular platform for listening, it is not yet crucial for success the way it is for musicians – podcasters have other avenues. Thus, especially at this early stage in the market, appealing to creators is crucial.

The Hollywood writers strike

This week’s Hollywood writer’s strike is mainly about seeking better rates of compensation and a reasonable level of job security. Significantly, the strike is happening just as the Golden Era of Streaming that Netflix launched in 2012 has begun to hit the profitability wall.

Since Netflix started the ball rolling in 2012, the fledgling streaming services have thrown buckets of money at anything and everything – showrunners, stars, writers etc – that might conceivably attract subscribers. A lot of good television has come from letting the creatives off the leash. Viewers have feasted on binge-worthy content, even as the streaming services have burned through mountains of cash.

It changed the industry. Network TV lost viewers (and advertising revenues) to the streaming upstarts. Outstanding shows like Fleabag, BoJack Horseman.The Handmaid’s Tale, Killing Eve, Reservation Dogs, Severance, Mare of Easttown, The Bear, The White Lotus and Succession were all examples of shows that would not have been made under the constraints of the rigid, risk-averse network TV regime. The streaming services even began taking on the movie studios, and started winning Oscars.

The downside? According to research carried out by FX, the streaming race has led to a glut of 599 scripted English language TV shows being made in the US alone last year, a figure that’s roughly double the number of series that were being made back in 2012. The banks and the backers – and even the likes of Disney – have begun freaking out at the rivers of red ink at the streaming services, and are now demanding evidence of a pathway to profit, even if that means laying off thousands of the people who could previously make a living somewhat down the pecking order during the Golden Era of Streaming.

Short and sharp

All along, the streaming shows have offered a faster payoff to viewers. Seasons became shorter with fewer episodes, thereby eroding the security of a year’s employment on a network TV season that commonly stretched to 15 or 20 episodes.

Crucially, the network system used to send a successful television series into syndication once the initial screening run was over, thereby creating a long tail of residual royalty payments for the writers that kept the home fires burning during the fallow periods between jobs. That income stream has been eliminated by streaming’s fewer episodes, and shorter shelf life.

In sum, the week’s writers’ strike is indicative of how business is being done in the autumn of the streaming age. For the writers, it’s fight or die time. The Writers Guild of America (WGA) represent some 8,000 to 11,500 writers in New York, Los Angeles and elsewhere.

The WGA has been asking for better compensation – to make up for the loss of residuals – which, with grumbles, companies and production houses from Disney and Netflix to Hulu, Showtime, FX and HBO were probably willing to pay. However, the WGA is also asking for a more stable employment situation for writers in each season of a show, contrary to recent practice. As Reuters reports, that has become the main sticking point in the negotiations.

What the WGA is particularly vexed about is a practice called “mini-rooming” whereby the showrunner can create a mini-gig economy by hiring a smaller crew of interchangeable experienced writers and newbies while paying them the same flat rate. As Vanity Fair recently reported:

Minirooms—fewer people doing the same amount of work with even less security—are egalitarian in the sense that they seem bad for everyone. (AMC was an early adopter, and many others have made use of them.) TV writer-producer Liz Hsiao Lan Alper says that because experienced writers and novices are paid the same rate in minirooms, some studios are hiring only upper-level writers to get the most bang for their buck. “It’s basically making it so that there are fewer and fewer lower- and middle-level writers who can make a living,” she says. “And in the WGA, most of our [racial and gender] diversity is found amongst our lower and middle tiers.”

Mini-rooms are becoming the industry norm amidst a climate of layoffs and budget cuts. These are happening even at HBO, which is now merely a subsidiary of the same Warners.Discovery empire that also owns what used to be known here as Mediaworks (TV3, Newshub etc.)

It may take a while for the quality to decay, and for the triumph of profit over experimentation to become apparent to viewers – yet clearly, the Golden Age of Streaming has peaked. The Vanity Fair report quotes one anonymous executive about the likely effects of the cutbacks:

It takes time and care to bring truly original shows into the world. “I’m worried about that pipeline—not just at HBO, but at Showtime, Hulu, FX, and others—getting their budgets cut as things get consolidated,” says the exec. “You get to a White Lotus because HBO nurtured Mike White and Enlightened. You get to an Everything Everywhere All at Once because A24 nurtured the Daniels.”

It goes even further than that. Mike White’s success with The White Lotus – he finally got a hit show at the age of 52! – not only came after his experimental work with Laura Dern on the Enlightened series in 2011. White had also served his writing apprenticeship on the beloved Freaks and Geeks series, nearly 25 years ago. How many Mike Whites are going to be sacrificed in the current purges?

Ultimately, Wall St has no interest in investing in quality, merely in profit. The fact that this short term focus will have a chilling effect on the creative climate essential for making profits in future appears to cut no ice. Like the vampire it is, capitalism will simply move on to the next profit node that it can suck dry.

Footnote: With a writers strike imminent, producers have been racing to get scripts completed before the May 2 strike deadline.

The second series of the hit show Severance is probably safe, despite reports that the two original showrunners now hate each other, that the US House of Cards creator Beau Willimon has been brought in to make peace, and that the second series is over budget and behind schedule. These claims have been denied by Ben Stiller, the series’ key director/producer:

“No one’s going to the break room. We’re on the same really slow schedule we’ve always been on. Same target air date we’ve always had. Love our fans and each other and we all are just working to make the show as good as possible.”

My liege, my lord

The attempt to change the pledge of allegiance at King Charles III’s coronation has gone badly, hasn’t it? (Russell Crowe still thinks Charles is a good bloke, though, Gladiator regardless.)

Reportedly, the former pledge of allegiance by aristocrats to the monarch has been scrapped from the coronation ceremony – it looked a bit elitist, right? – and has been thrown open to the general public instead. Alas, this has looked like Charles wants everyone to bow the knee to him. The pledge was always only voluntary, the Palace has plaintively tried to explain.

Maybe the Palace should just forget the pledge and hire Marion Cotillard instead to lead the crowd in a rendition of the good old Edith Piaf hit “Milord.” To avoid misunderstandings though, the Palace might need to remind everyone that back in 1802, British monarchs finally stopped pretending they were also the lawful Kings of France. Allez, venez, milord!