The Business of Hollywood & Streaming

[Celery Man 20607]

[Texas Flood 1338]

15 hours ago, Queen Bitch said:

Sorry for these very long screeds, but walking in slow picket-line circles in the sweltering sun these past few months -- and everything changing for the better with SAG jumping in -- and well, I've got a lot on my mind about the state of things and nowhere to really put it. 

I keep hoping we're nearing the end of this era of Hollywood, similar to when 1960s Hollywood collapsed under the weight of a bunch of big-budget musicals and old-fashioned spectacles, all of which bombed at the box office one after the other. Tastes had changed, the younger audiences didn't give a single fuck about Paint Your Wagon, and Hollywood couldn't quite figure out what they wanted. (In today's equation, I'm thinking the zillionth superhero retread and tired franchises with very little gas left in their respective tanks. This summer's dismal box office under-performance supports how dire this problem is today.)

So... what happened next? The dawn of New Hollywood. The Godfather, Chinatown, The Conversation, Cabaret, The Exorcist, Robert Altman. The 1970s remain the undisputed artistic era for cinema. 

How exactly could another New Hollywood happen today? Well, it probably involves these bratty corporate titans dismantling the studios and selling them for parts. That sounds dramatic, but Zas is kind of already doing that with WB and it's an open secret that Paramount doesn't have that many years left as a studio. Or maybe it involves Wall Street massively downgrading media stocks for terrible box office receipts and a lack of streaming profits. Or maybe, just maybe, it involves the writers and actors demanding radical change (it's sad that 'radical change' here means "don't replace us with machines and also let us be able to afford to live in the city where we work", but hey, that's just late stage capitalism.)

We write cool shit in Hollywood, I promise -- but we're not the ones with greenlight power. This era of Hollywood is so deeply risk averse and IP obsessed, and I for one would love to see it collapse. Another New Hollywood -- let's fuckin go.

(We don't have nice things anymore, so this won't happen, but hey, it's fun to dream.)

These are two key underrated points.

I also highly recommend Matt Stoller's article that outlines the current monopolistic structure that dates back from the 90s and rise of theater megaplexes that have exacerbated Hollywood's reliance on recycled branded content and IP. 

https://www.thebignewsletter.com/p/can-a-writers-strike-save-hollywood

 

The greenlight gatekeepers makeup also needs to change. It's been the same peeps bouncing around the different buyers for years and are mostly the the typical Yes-men/women subservient to wallstreet interests to "play the hits" and not taking risks which the industry needs. Iger (72) is back, Zaslav is 63, Brian Robbins is 59. De Luca is 57 (was 27 when he got the President of Production job in the early 90s). The 70s was cited as a Hollywood renaissance and Barry Diller was running Paramount in his 30s. The whole system needs a change.

 

[Bateshorn 9612]

On 7/14/2023 at 1:24 PM, NotActuallyALonghorn said:

I think we are entering an unprecedented era in which technological progress is so much faster than anything we've adapted to in the past. It's going to be painful in the short term, but we will eventually figure out how to deal with it.

Or we won’t. There are plenty of instances in human history of the short term lasting decades or centuries. 

[Buzzrock 14785]

How long before production can be decentralized? For a few thousand bucks in gear and sound dampening material you can make a pretty good home music studio and/or start a YouTube channel.

There can only be so many Clerks. 

[Buzzrock 14785]

I'm a member of ASCAP and get checks in the mail once a quarter or so, they amount to about $20 a year. Knowing basically nothing, I would guess that SAG is different (people who acted a little bit and have moved on with their lives wouldn't still be members unless they kept up with dues, I would think) but also similar in that if you want to understand what part of their union are working but not rich, it's more complicated than "everyone but the top earners". Looks like $3k to join and then ~$250 in annual fees, probably a lot of aspirational members, lots of people who joined for a gig and then continue to keep up with the annual fees but aren't truly still chasing the career?
got curious so I read that article a bit - the 2% figure seems to be a fuzzy figure based on a few surveys of actors - I don't doubt that it is in the ballpark of correct but I also don't think that an "actor" in that figure means a SAG member. I just texted my buddy (not a real actor) who joined SAG for a part in a movie 15 years ago and he's apparently an "inactive member", which means they process residuals but he doesn't pay dues.
I'm not drawing any conclusions about any arguments anybody is making here, just an interesting union dynamic.

Is songwriting still lucrative? Or is it only for the Chris Stapletons and the Sias and the Ryan Tedders?

I remember hearing that when Faith Hill had a hit with an Angie Aparo song, Angie was set for life.

[Celery Man 20607]

33 minutes ago, Buzzrock said:

Is songwriting still lucrative? Or is it only for the Chris Stapletons and the Sias and the Ryan Tedders?

I remember hearing that when Faith Hill had a hit with an Angie Aparo song, Angie was set for life.

take this with a massive grain of "I don't actually know much" but I'd say a song that gets placed in TV/Movie/Commercials is worth a bunch of money and everything else is worth squat. I own.... 16% of over a million spotify plays and that has probably earned me $30. One time a song got placed in an episode of some dumb thing that ran once and that quarter the check was almost worth cashing.

[MrBig 5186]

1 hour ago, Buzzrock said:

Is songwriting still lucrative? Or is it only for the Chris Stapletons and the Sias and the Ryan Tedders?

The person who wrote the Home Depot jingle, how much do y’all think they get paid?  

[Celery Man 20607]

[henrygandorf 28910]

2 hours ago, Buzzrock said:

How long before production can be decentralized? For a few thousand bucks in gear and sound dampening material you can make a pretty good home music studio and/or start a YouTube channel.

There can only be so many Clerks. 

production is not the issue, it's distribution.  nobody wants to shoot a movie or tv series and upload it to youtube or tiktok.  it's basically self-publishing a book.

[Nice Guy Eddie 13318]

of course there are accounting shenanigans in Hollywood but I can also see that they’re not swimming in cash like they once were.

I pay much less for entertainment (movies, tv, music) today than I did in 1995. But I assume that while these channels might earn less per subscriber/viewer, they’ve grown the number of global subscribers so perhaps that evens out in terms of $ per content or $ per worker.

however is the industry making enough to pay residuals that keep the artists as well off as they once were? And in my view you can’t look a the Netflix CEO pay as evidence the industry is doing well. While there may be a relation, dropping the exec pay to $100k isn’t going to change anything.

 

[LCHorn 2564]

I was under the impression that the Netflix contracts offered a greater amount of compensation relative to other studios because of the absence of residuals.  In other words, labor gets it all upfront.  
 

[Nice Guy Eddie 13318]

11 minutes ago, LCHorn said:

I was under the impression that the Netflix contracts offered a greater amount of compensation relative to other studios because of the absence of residuals.  In other words, labor gets it all upfront.  
 

I believe there are residuals from Netflix but it’s based on Netflix subscriber count not number of views. Given that tv and film workers do not work steadily, I gather that they count on residuals to get them thru the lean times while they’re working on the next jobs. As more and more content is moving to streaming, those residual payments are not working well for them.

From what I’ve read, the popularity of your show on Netflix means nothing in terms of residuals. It might only mean it helps you with the next job. This is why you hear about actors (not main cast) complaining that they’re recognized on the street but have zero money in their pocket. Presumably the actor from the unpopular show effectively received the same amounts (filming and residual.)

 

[Bateshorn 9612]

On 7/14/2023 at 8:57 PM, Michael Knight said:

We're entering an era where capitalism is in it's death throes. But it's gonna be painful. When 90% of all work can be done by robots why do people need to work what's the point of money, or like 30 people will have all the wealth and everyone else can eat shit

That last clause in your last sentence is the one you need to be worried about.

[henrygandorf 28910]

8 hours ago, Nice Guy Eddie said:

While there may be a relation, dropping the exec pay to $100k isn’t going to change anything.

sure, but it comes off especially tone deaf when the ceo's are telling the press "sorry, there just isn't any money to go around, we're basically going broke over here."

netflix specifically (and this is about the 5th time i've mentioned it, so apologies) went out of their way to create their own content in order to replace the successful content they were no longer going to license from other networks.  they foolishly spent over a billion dollars on a few high-profile showrunners and accomplished pretty much zero of what they set out to do.  so yeah, decisions were made from high places and that money could've certainly been useful elsewhere.

[billfromlaketravis 11291]

2 minutes ago, henrygandorf said:

sure, but it comes off especially tone deaf when the ceo's are telling the press "sorry, there just isn't any money to go around, we're basically going broke over here."

netflix specifically (and this is about the 5th time i've mentioned it, so apologies) went out of their way to create their own content in order to replace the successful content they were no longer going to license from other networks.  they foolishly spent over a billion dollars on a few high-profile showrunners and accomplished pretty much zero of what they set out to do.  so yeah, decisions were made from high places and that money could've certainly been useful elsewhere.

Henry are you buying all the tongue in cheek jokes about the strike only going to mid September? Variety’s podcast thinks it ends then. 

[henrygandorf 28910]

7 minutes ago, billfromlaketravis said:

Henry are you buying all the tongue in cheek jokes about the strike only going to mid September? Variety’s podcast thinks it ends then. 

i haven't listened to the podcast, but from what i am hearing, the "novelty" of the actors and writers being on strike at the same time is something that will be milked a bit, and won't help resolve it anytime soon.  that's two months from now and definitely possible.  mid sept is about when viewers are going to start asking, "where is abbott, ghosts, and insert popular broadcast network show here".

[tx 3 putt 75559]

damn, how are these able to live ?

 

 

[billfromlaketravis 11291]

Just now, henrygandorf said:

i haven't listened to the podcast, but from what i am hearing, the "novelty" of the actors and writers being on strike at the same time is something that will be milked a bit, and won't help resolve it anytime soon.  that's two months from now and definitely possible.  mid sept is about when viewers are going to start asking, "where is abbott, ghosts, and insert popular broadcast network show here".

The podcast is called The Town. It’s an interesting , inside baseball type podcast about Hollywood. 

[Scary Stranger 1711]

damn, how are these able to live ?
 
 

Hi. I’m Paulo. Would you like to hear our specials?

[Captain Ron 12722]

Jennifer Ruben, opinion writer from the WaPost, chimed in today with a piece on this:

Hollywood strikers face behemoths that politicians have let run wild
https://wapo.st/3Deuh78
 

Let me know if that doesn’t work and I post the text here (on my phone right now, hard to do). 

[Nivek 16691]

Seems to me they are doing the same thing that athletic departments did, they got bloated.  There is no reason some of the films should cost as much as they do.  My guess would be some friendly accounting.

[UpperWestside 6032]

3 hours ago, Scary Stranger said:

Hi. I’m Paulo. Would you like to hear our specials?

I work with folks who are actors and they make far more money being a server than they ever will as an actor. We make some ridiculously good money for what we do here in New York at least. Many of these folks who are struggling as writers and bit actors aren’t doing this job though so losing out on those checks right now while on strike really hurts.

[Buzzrock 14785]

take this with a massive grain of "I don't actually know much" but I'd say a song that gets placed in TV/Movie/Commercials is worth a bunch of money and everything else is worth squat. I own.... 16% of over a million spotify plays and that has probably earned me $30. One time a song got placed in an episode of some dumb thing that ran once and that quarter the check was almost worth cashing.

Interesting I’ve read in a couple places that one million streams is worth about $4000.

[Buzzrock 14785]

production is not the issue, it's distribution.  nobody wants to shoot a movie or tv series and upload it to youtube or tiktok.  it's basically self-publishing a book.

Ah got it. Seems ripe for disruption.

[CooterBrown 17762]

damn, how are these able to live ?
 
 

Devils advocate…what’s the average number of hours worked by that 87%? I’d bet there’s a huge number of SAG cardholders that work less than 200 hours a year.

Maybe set the threshold at like 1,000 hours, which is just half time for a normal job.

[Neonmoon 38126]

They should definitely get a minimum, but as stated, they should have to work a certain amount of hours to qualify for that minimum. If you can’t get jobs as an actor, you’re not an actor, you’re a waiter trying to become an actor. (Yes I realize that’s how you start, but you shouldn’t get a minimum salary if you aren’t booking work). It’s the same with many commission jobs. Realtors is a good example. A large percentage don’t do any business. You have a license, but if you’ve only sold 1 home in the past 14 months, it’s not really a career, it’s something you do for a friend when they sell their house. 

[Parliament 14022]

34 minutes ago, Neonmoon said:

They should definitely get a minimum, but as stated, they should have to work a certain amount of hours to qualify for that minimum. If you can’t get jobs as an actor, you’re not an actor, you’re a waiter trying to become an actor. (Yes I realize that’s how you start, but you shouldn’t get a minimum salary if you aren’t booking work). It’s the same with many commission jobs. 

 

[Nice Guy Eddie 13318]

3 hours ago, Neonmoon said:

They should definitely get a minimum, but as stated, they should have to work a certain amount of hours to qualify for that minimum. If you can’t get jobs as an actor, you’re not an actor, you’re a waiter trying to become an actor. (Yes I realize that’s how you start, but you shouldn’t get a minimum salary if you aren’t booking work). It’s the same with many commission jobs. Realtors is a good example. A large percentage don’t do any business. You have a license, but if you’ve only sold 1 home in the past 14 months, it’s not really a career, it’s something you do for a friend when they sell their house. 

What minimum are actors not receiving? Isn't there a daily rate that they receive by being in the union and booking a job?

 

[henrygandorf 28910]

4 hours ago, Neonmoon said:

They should definitely get a minimum, but as stated, they should have to work a certain amount of hours to qualify for that minimum. If you can’t get jobs as an actor, you’re not an actor, you’re a waiter trying to become an actor. (Yes I realize that’s how you start, but you shouldn’t get a minimum salary if you aren’t booking work). It’s the same with many commission jobs. Realtors is a good example. A large percentage don’t do any business. You have a license, but if you’ve only sold 1 home in the past 14 months, it’s not really a career, it’s something you do for a friend when they sell their house. 

well it sounds like some actors and writers might be selling their houses soon, so maybe there's some synergy.

[Longhornsnus 200]

Was reading something today that further reinforced Hank as the industry genius (re: AI being a headline but not a real lynchpin):

 

The reason to start with 1960 is that that was the last time actors and writers were on strike at the same time; the primary driver of that unrest was the rise of television. As for the last actors strike, in 1980? That was about the rise of home video. This leads to the first takeaway: the most important driver of unrest between studios and talent has always been technological paradigm shifts, and this time is no different.

In this case it is the rise of streaming that strikes me as more consequential than AI, but to first dispatch with the latter, it seems to me that writers are much more threatened by AI; it’s much more plausible today to imagine using an LLM to generating a B-movie script or filler television than it is to imagine AI replicating actors (particularly since actors licensing their likeness may in fact turn out to be very lucrative).

What is worth noting about AI is that those concerns are in-line with traditional Hollywood talent concerns when it comes to new technology: both unions have in strikes past been focused on preserving union jobs in the face of technological replacements. That is what led to the rise of residuals, which were at the core of the 1960 strike: if studios were showing movies on TV, then that meant they were occupying scarce time with content that actors weren’t getting paid for, which is to say that the actors in the movie that was being shown were competing with themselves; thus the union demand that they be paid for it.

This by extension is why I think the AI questions in this debate will probably be easier to solve: there is already a paradigm in place in Hollywood to make sure that the talent gets a cut of every airing of a piece of entertainment, and again, while you can envision an LLM writing a script, I wouldn’t be surprised if Hollywood executives primarily see the issue as something to give on while getting concessions on the more consequential issue. That, as I noted above, is streaming, and the reason why this negotiation is probably going to be very difficult is that it is exceptionally hard to divide up a pie that is shriveling before one’s eyes.

[Longhornsnus 200]

Was reading something today that further reinforced Hank as the industry genius (re: AI being a headline but not a real lynchpin):

 

The reason to start with 1960 is that that was the last time actors and writers were on strike at the same time; the primary driver of that unrest was the rise of television. As for the last actors strike, in 1980? That was about the rise of home video. This leads to the first takeaway: the most important driver of unrest between studios and talent has always been technological paradigm shifts, and this time is no different.

In this case it is the rise of streaming that strikes me as more consequential than AI, but to first dispatch with the latter, it seems to me that writers are much more threatened by AI; it’s much more plausible today to imagine using an LLM to generating a B-movie script or filler television than it is to imagine AI replicating actors (particularly since actors licensing their likeness may in fact turn out to be very lucrative).

What is worth noting about AI is that those concerns are in-line with traditional Hollywood talent concerns when it comes to new technology: both unions have in strikes past been focused on preserving union jobs in the face of technological replacements. That is what led to the rise of residuals, which were at the core of the 1960 strike: if studios were showing movies on TV, then that meant they were occupying scarce time with content that actors weren’t getting paid for, which is to say that the actors in the movie that was being shown were competing with themselves; thus the union demand that they be paid for it.

This by extension is why I think the AI questions in this debate will probably be easier to solve: there is already a paradigm in place in Hollywood to make sure that the talent gets a cut of every airing of a piece of entertainment, and again, while you can envision an LLM writing a script, I wouldn’t be surprised if Hollywood executives primarily see the issue as something to give on while getting concessions on the more consequential issue. That, as I noted above, is streaming, and the reason why this negotiation is probably going to be very difficult is that it is exceptionally hard to divide up a pie that is shriveling before one’s eyes.

edit to add:

One of the ways Netflix broke into Hollywood was by forgoing residuals and just paying talent upfront: this removed the potential for huge upside if a show was a massive hit, but it guaranteed that talent got payed, even if a show wasn’t a success. Over time Netflix and other streamers have started to pay residuals, but as Federman notes, the lack of transparency into how exactly those residuals are calculated is a big sticking point.

The entire idea of residuals arose from the idea that talent shouldn’t have to compete with itself when it came to re-running a movie or show; the key thing to note, though, is that this concern made sense in a world where there was scarce distribution. To go back to the 1960s, there were only three networks: that meant there were only 504 hours in a week to air content on television; airing a two-hour movie reduced the available space for talent to 502 hours.

Streaming, though, is purely additive. The Internet makes distribution effectively free, which means there are an infinite number of hours available for talent to monetize. This does, it’s worth noting, render talent’s original argument for residuals moot; if anything Netflix had it right when it temporarily shifted the model to simply paying up front. In fact, Federman unwittingly makes this point when he describes the mindset of studio heads in 1960:

Quote

 

Let’s say you get hired to act in a film. Basically, the person hiring you is taking the risk. They’re paying you your salary, and in return, they own that product. So, what SAG was saying was, You can play that film anywhere in the world, you can play it in Italy, you can have it dubbed — but when you put it on television, that’s a new revenue stream. Also, the argument was that that is taking work away from other actors. Because if you have this movie on, that time slot is no longer available for working actors.

On the other side, the head of 20th Century Fox [Spyros Skouras], his argument was very simple: Why should I pay you twice for the same job? I’ve already paid you for this job. I own this at this point. And that was basically the position of all of these studio owners. At the beginning of the strike, they were like, We’re not even going to talk about residuals. It’s a nonstarter. And Reagan said, We’re “trying to negotiate for the right to negotiate.” That’s how far apart they were. It was so foreign to these guys that they would have to share their revenues with actors after they’d already paid the actors. Ultimately, one studio, Universal Pictures—believe it or not, the head of Universal, a guy named Lew Wasserman, used to be Ronald Reagan’s agent—was the first domino that dropped. I think Lew Wasserman thought it was inevitable anyway: If it wasn’t going to happen in 1960, it might happen in ’65. And then one after another [gave in], until, I think, the 20th Century guy was the last guy, who was like, All right, I’ll give it, I’ll pay you again for something I’ve already paid you for, through clenched teeth.

 

Wasserman was right: studios were going to have to share the scarce resource, which was time on TV, with talent. Again, though, scarcity in terms of distribution is now gone; the only scarce resource on the Internet is consumer time and attention, and commanding that is far more difficult and risky. Look no further than the deteriorating financial condition of most of Hollywood: not only are the studios competing with Netflix and Amazon and Apple, but also with things like YouTube and social media. Indeed, you could very easily make the case that a far more legible labor action would be for the studios to lock out the talent in an attempt to remove residuals completely, given how much more risk any content producer is taking on today.

This angle is, obviously, a non-starter, but it does point at why these negotiations are likely to be so fraught: actors and writers are angling to get a larger share of revenue that they arguably no longer deserve.

Edited July 17, 2023 by Longhornsnus

[Longhornsnus 200]

Sorry for the multiple posts, the edit keeps timing out on me. I thought the end of the article (I wish I could link, but it's a premium paid email) was insightful:

For the video industry the first step to survival must be to retreat to what they are good at — producing content that isn’t available anywhere else — and getting away from what they are not, i.e. running undifferentiated streaming services with massive direct costs and even larger opportunity ones. Talent, meanwhile, has to realize that they and the studios are not divided by this new paradigm, but jointly threatened: the Internet is bad news for content producers with outsized costs, and long-term sustainability will be that much harder to achieve if the focus is on increasing them.

[Queen Bitch 1692]

But if we don't get explicit protections from AI *now* @Longhornsnus, none of the other stuff matters, as the majority of our membership never works again. The other items we're fighting for are very important, the AI issue is existential.

Edited July 17, 2023 by Queen Bitch

[Queen Bitch 1692]

3 hours ago, Longhornsnus said:

This angle is, obviously, a non-starter, but it does point at why these negotiations are likely to be so fraught: actors and writers are angling to get a larger share of revenue that they arguably no longer deserve.

We don't deserve to share in the long-term success of the shows we created and shaped? Get the fuck outta here with that.

FWIW, my streaming residuals are actually quite good, but that's because the streamer which aired that series has no ownership of the show, so the residual rate is (to my knowledge) a byproduct of their licensing fee with the studio. 

Edited July 17, 2023 by Queen Bitch

[MrBig 5186]

1 hour ago, Queen Bitch said:

FWIW, my streaming residuals are actually quite good, but that's because the streamer which aired that series has no ownership of the show, so the residual rate is (to my knowledge) a byproduct of their licensing fee with the studio. 

Your residual structure will soon be a relic of the past. Streamers and studios now produce a large amount of their content in house and rarely want to license content if they can just produce it and own it themselves.

This goes back to my point about how distribution is affected because the Paramount decrees were repealed. Apps like Paramount+ and Peacock could not exist in their current iteration before this law was changed.  The studios are now catching up to the streaming model of producing, owning, and distributing their content. Studios will also pay shit residuals for content on their streaming platforms. If actors thought they were getting paid shit now, it’s only going to get worse now that the studios are on a level playing field with the streamers. 

Netflix pays only for domestic and international residuals based on number of episodes and length, but not based on streaming views. The streamers will never ever go to a residual model based on number of views. This will let the cat out of the bag on their actual numbers and methodologies and will have a huge effect on stock prices.

The AMPTP threw out that outrageous AI proposal about owning background actor image and likeness because they know that it’s a poison pill to kill the whole deal so they don’t have to give up their streaming numbers.

[Queen Bitch 1692]

Several things -- the studios will eventually remember that licensing their libraries equals FREE MONEY. They're going to remember that owning and distributing their content ad infinitum isn't nearly as profitable as making a thing and selling and reselling that thing over and over and over and over and over. Hell, HBO just licensed a bunch of their shows to Netflix, and I'd say it was a smart move. If anything, the current working assumption for why the legacy studios aren't fucking over Netflix *now* in these negotiations is because they consider Netflix a buyer (licenser) of their content. When that happens, should writers and actors not receive residuals for those series' continued profitability?

Another thing -- what about when the streamers (most importantly Netflix) launch the advertisement tiers of their services? Are the advertisers going to be fine buying ads for shows when they have no idea if said shows are a success or not? I just don't buy the streamers can close off their metrics forever, particularly as they eventually (and inevitably) move away from relying solely on streaming fees for revenue.

This model is still fairly nascent and it isn't sustainable -- but the model of monetizing your library to as many buyers as possible *does* work. It's made a lot of people a lot of money FOR DECADES.

Edited July 18, 2023 by Queen Bitch

[Longhornsnus 200]

10 hours ago, Queen Bitch said:

Several things -- the studios will eventually remember that licensing their libraries equals FREE MONEY. They're going to remember that owning and distributing their content ad infinitum isn't nearly as profitable as making a thing and selling and reselling that thing over and over and over and over and over. Hell, HBO just licensed a bunch of their shows to Netflix, and I'd say it was a smart move. If anything, the current working assumption for why the legacy studios aren't fucking over Netflix *now* in these negotiations is because they consider Netflix a buyer (licenser) of their content. When that happens, should writers and actors not receive residuals for those series' continued profitability?

Another thing -- what about when the streamers (most importantly Netflix) launch the advertisement tiers of their services? Are the advertisers going to be fine buying ads for shows when they have no idea if said shows are a success or not? I just don't buy the streamers can close off their metrics forever, particularly as they eventually (and inevitably) move away from relying solely on streaming fees for revenue.

This model is still fairly nascent and it isn't sustainable -- but the model of monetizing your library to as many buyers as possible *does* work. It's made a lot of people a lot of money FOR DECADES.

^^ Good point. I thought I shared this part of the article but what do you think of this as a response?

--

Content costs a lot to produce up front, but the marginal cost of showing it again is effectively zero; that means the more times you can show a piece of content the more you can spend up front. The number of times you could show it, though, was, as noted above, governed by available distribution; if distribution was scarce than there was an opportunity cost of showing old content, because you couldn’t show something new (which again, was why talent wanted a share of multiple airings).

What is critical to note is that this leverage was best realized by selling to as many distributors as possible. The classic example is the traditional movie window: first you sell a movie to first-run theaters, then to budget theaters, then to hotels and airlines, then to pay-per-view, then to videocassettes/DVDs, then to cable, and finally to broadcast TV. That’s seven distinct opportunities to sell a piece of content. Going straight to streaming, though, collapses seven windows to one, reducing the ability to make money off of a particular piece of content.

Studios are enduring this cost, though, in the service of building up their own streaming services, but that has its own costs: running a streaming service entails being in the direct-to-consumer business, which is a costly one: not only do you have to build up and maintain the technical infrastructure of the service, and incur costs in customer support, but you also have to worry about things like churn that simply aren’t a consideration when you’re selling content. All of this is very expensive!

The real pain, though, is opportunity cost: while studios are missing out on multi-window revenue and paying for their streaming service and trying to simultaneously acquire customers and stopping them from churning, they are also forgoing revenue from established services like Netflix that would not only happily pay them for their content, but could actually justify a much higher price given their significantly larger user base across which that cost could be leveraged.

All of these costs, it should be noted, occur in the aggregate, which is a real problem in these negotiations: talent is concerned about their compensation on a per-show basis, but studios are bleeding money on an entity-level in their foolhardy pursuit of customer-facing streaming services. Most of the discussion about this mismatch are focused on how to properly compensate the talent; note this item from Puck:

The union and AMPTP have by and large agreed on the residuals improvements the DGA obtained in its recent deal, but the union also wants 2 percent of subscriber revenue to be shared with the cast of a successful show, with success measured by Parrot Analytics, an analysis firm that looks at viewership, social media engagement, and other factors, to determine “demand.” That proxy metric was proposed because the companies refuse to share their internal measurements, of course. But the studios declined to engage on that issue, and the management-side source asked how the producer of a show could be expected to share revenue earned not by the producer but by the platform (i.e., subscribers pay platforms; subscribers don’t pay producers).

I get the talent’s perspective, but I’m pretty sure the talent doesn’t want to pay for the cost of customer service or customer acquisition or churn mitigation! Then again, neither should the studios: it doesn’t make any sense to me why the studios decided they wanted to bear these costs, and that’s not the talent’s problem.

[Deej 76219]

On 7/13/2023 at 6:36 PM, Nice Guy Eddie said:

Wouldn’t a better rep be someone that none of us have heard of?

That wouldn't work. The starfucking American public wouldn't pay attention. 

[Nice Guy Eddie 13318]

The traditional residuals makes sense when there is new revenue being produced when someone watches the content. If you watch a rerun of an old sitcom or movie on TBS or NBC, the distributor generates revenue due to the ads being displayed to you. Or if a movie is rereleased in the theater, new box office revenue is generated. For Netflix, whether someone watches 1 or 100 hours of content that month, Netflix still receives the same $10-20 per month. therefore Netflix has a limited, although large, amount of revenue to create/pay for content. More watching does not equal more revenue. Note: the ad-supported version of Netflix is a hybrid model.

To me, the actors and writers should look for an agreement where a percent of subscriber fees are distributed based on what that subscriber watched. For argument sake, say $1 goes to the artists out the $20 subscriber fee. If that subscriber only watched 1 episode that month, say Stranger Things, then the $1 goes to the residuals of the Stranger Things artists. If that subscriber watched 100 episodes that month of a wide variety of shows including that 1 Stranger Things episode, then the Stranger Things artists should get 1/100 of that $1, or 1 cent.

The $1 (or whatever is considered fair) gets distributed to the artists and it's based on the popularity of the content. If no one watches a piece of content, you get nada. 

[Queen Bitch 1692]

52 minutes ago, Nice Guy Eddie said:

 

To me, the actors and writers should look for an agreement where a percent of subscriber fees are distributed based on what that subscriber watched. For argument sake, say $1 goes to the artists out the $20 subscriber fee. If that subscriber only watched 1 episode that month, say Stranger Things, then the $1 goes to the residuals of the Stranger Things artists. If that subscriber watched 100 episodes that month of a wide variety of shows including that 1 Stranger Things episode, then the Stranger Things artists should get 1/100 of that $1, or 1 cent.

The $1 (or whatever is considered fair) gets distributed to the artists and it's based on the popularity of the content. If no one watches a piece of content, you get nada. 

The actors presented this to the studios. A pot of money dedicated to residuals, amount based on number of subscribers, and the residuals would be divvied up based on amount of streams. So the Stranger Things writers make way more than the writers of a cancelled show none of us have ever heard of. This way, the streamers can keep their precious viewing data a secret.

The studios rejected it.

[Longhornsnus 200]

From the NYT (Link:https://www.nytimes.com/2023/07/17/business/media/hollywood-actors-writers-strikes.html)     Some good news for the creatives as studios seem to realize a prolonged strike will be a bad deal for everyone, themselves included:

--

Studios insist that they can ride out the work stoppage that has largely shut American movie and TV productions. But there’s growing fear that if it stretches beyond a little more than a month, their business could suffer badly.

A countdown to Labor Day looms. Three studio chairs told The Times that Hollywood could sit idle until early September with no major long-term business damage. TV studios are continuing to introduce contingency plans for the fall: CBS became the latest yesterday, announcing a lineup composed of reruns of “Yellowstone” and reality and game shows.

But a strike that goes on longer would most likely mean big delays for projects set for next year, threatening to make 2024 a ghost town for content. And TV giants can survive on lineups built largely on the likes of “Survivor” and “The Golden Bachelor” for only so long.

The costs of a lengthy strike are becoming clearer. While media executives suggested that they could use the work stoppage to cut costs, including by ending some expensive production deals, those benefits will be short-lived. The media mogul Barry Diller recently outlined to “Face the Nation” the knock-on effects of an extended strike:

Quote

“You’re going to see subscriptions get pulled, which is going to reduce the revenue of all these movie companies, television companies, the result of which is that there will be no programs. And at just the time, strike is settled, that you want to get back up, there won’t be enough money. So this actually will have devastating effects, if it is not settled soon.”

And the analyst Michael Nathanson of MoffettNathanson noted that American studios could suffer if platforms like Netflix turn to overseas content producers for new movies and shows. “It’s like if the United Auto Workers go on strike, and all of a sudden you see more cars from Japan and Germany on the road,” he told The Times.

Diller has already proposed a solution. “As a good-faith measure, both the executives and the most-paid actors should take a 25 percent pay cut to try and narrow the difference between those who get highly paid and those that don’t,” he told “Face the Nation.” Yesterday, a group representing studios in the labor talks said that before the strike, its members had offered over $1 billion worth of concessions on pay and benefits, as well as limits on their use of artificial intelligence.

It’s unclear whether that would be enough, however, with all sides acknowledging that battle lines are hardened.

[Biff Tannen 45226]

On 7/16/2023 at 4:16 PM, henrygandorf said:

sure, but it comes off especially tone deaf when the ceo's are telling the press "sorry, there just isn't any money to go around, we're basically going broke over here."

Speaking of Barry Diller, he is chairman of the board for my former company and when we went through a layoff, he zoomed into the all hands meeting from his yacht in the Mediterranean. Yeah, that didn’t go over well. 

[henrygandorf 28910]

1 hour ago, Nice Guy Eddie said:

The traditional residuals makes sense when there is new revenue being produced when someone watches the content. If you watch a rerun of an old sitcom or movie on TBS or NBC, the distributor generates revenue due to the ads being displayed to you. Or if a movie is rereleased in the theater, new box office revenue is generated. For Netflix, whether someone watches 1 or 100 hours of content that month, Netflix still receives the same $10-20 per month. therefore Netflix has a limited, although large, amount of revenue to create/pay for content. More watching does not equal more revenue. Note: the ad-supported version of Netflix is a hybrid model.

To me, the actors and writers should look for an agreement where a percent of subscriber fees are distributed based on what that subscriber watched. For argument sake, say $1 goes to the artists out the $20 subscriber fee. If that subscriber only watched 1 episode that month, say Stranger Things, then the $1 goes to the residuals of the Stranger Things artists. If that subscriber watched 100 episodes that month of a wide variety of shows including that 1 Stranger Things episode, then the Stranger Things artists should get 1/100 of that $1, or 1 cent.

The $1 (or whatever is considered fair) gets distributed to the artists and it's based on the popularity of the content. If no one watches a piece of content, you get nada. 

the other way to look at this, in terms of "explain this to me like i'm a five year old", when it comes to television residuals (and i've probably made similar posts, but here's another one) to put things in perspective for those who don't pay close attention. 

through the fault of nobody, the structure has changed.  in the old days 80's, 90's, 00's, you had a lot of successful broadcast network sitcoms.  think cosby and cheers, through friends, seinfeld, will and grace, all the way up through the office, big bang, parks and rec.  those shows were great, their audiences grew, the ad revenue grew, the salaries grew, and everything made sense.  it was just math.  and everyone associated with an episode of tv (actors, writers, director, etc) was attached to that episode.  like some contracts i've signed, "locked for life".

they aired their 22-24 episodes a season, then aired reruns, then took 3 months off, then did the whole thing over again.  if the show was successful enough (typically 4 seasons), it went into syndication.  and that's when the other non-cable channels (80's and 90's) and eventually pretty much everyone - tbs, tnt, usa, comedy, vh1, paramount, the wb, the cw, even hallmark, purchased the right to re-air these episodes, and every single episode basically got sold again.  which meant that everyone attached to every episode got paid again.  it was a money-printing machine.

then, they made dvd sets for each season.  boom, those episodes get sold again.  they get syndicated, re-syndicated, they get licensed by airlines, they were all over the place.  then netflix comes along and says we want to do that too.  great.  sold again, and everyone associated, paid again.  actors/writers/crew got work for a year, short break, and were back at it.  no concerns about size of writers rooms, health insurance minimums, anything.

then, as more streamers emerged, they decided that it would make more sense for them to produce their own content and own it, rather than pay large fees to the actual owners of the show.  and i've picked on netflix plenty, so we'll use another example of what happens nowadays, and i'll pick the most popular example - ted lasso.  so apple wants to make their own comedies, but they don't want to make 22-24 episodes, they want to make 8-10.  and they don't want to take the summer off, they want a year in between seasons.

so here's where things get tricky.  now the rooms aren't as big because the seasons aren't as long.  and the schedules aren't as crazy, so the actors don't get as much work, and "booking a tv show" doesn't mean then next year or (fingers crossed) several years are taken care of.  now you get a few months of work.  and since most of the shows are shot single camera instead of multi-cam, work schedules are different (think more like a movie).  not everyone is on set every day rehearsing a full episode.  

and here's the best part - when the season is over, do you know where it goes?  nowhere.  it just sits on apple+ because why on earth would they want it anywhere else (outside of maybe an airline).  so instead of getting paid 3-5x for several seasons of tv at 22 episodes per season, you're getting paid once for 3 seasons at 8 eps per season. 

so yeah, when they made a deal to "pay more up front" because of the lack of residuals, they didn't even come close to reaching the full compensation possibilities, even for a mediocre show.  and when something truly does take off, like ted lasso, it doesn't affect ad revenue, and nobody's salaries shoot through the roof because there's not enough time for that to happen.  it only affects subs, which helps, but as netflix has shown us, there's a ceiling on that, and nobody seems to want to be transparent about viewership on individual shows, so there really is no benefit to being on a great show, with the exception of future seasons.

to make a long story short (too late), when the previous deals were made, and even several years after that, the assumption was that the netflix(es) of the world would function like a basic cable channel, continuing to bring in the friends, west wing, mad men, and the office types.  as we've seen, that is no longer the case.  not only have streaming services decided to produce their own content, but they've slowly been weaning themselves off their most popular streaming shows owned by others. all except hulu, which is one of the reasons hulu continues to be the best service out there.

so yes, a lot of what the studios are claiming is true - there is no real ad revenue.  shorter seasons actually do require fewer writers and smaller rooms, not to mention shorter stretches of work, which affects writers and actors and their ability to retain benefits.  the streamers went from a potential syndication replacement to in-house production models.  and as always, the studios and networks will always be ahead of the talent.  they make the rules, they control distribution.  there will always be a lag where they can take advantage of everyone else while they cry about losses and their shareholders get rich, at least until the cba runs out.  same as it ever was.

to me, there is a split of (to quote paul kinsey) "why can't it just go back to the way it was?" type people, which sucks, because that world is long gone.  at least once a year, my agent will tell me that he "hears multi-cam is making a comeback".  i refuse to fall for it, though i have a few projects that could pivot.  and every year, they get nixed before shooting, which is why we don't see them.  can you even imagine a multi-cam sitcom on apple+, disney+, or amazon prime?  weird. 

sorry, got off track - the split is between the folks who long for the past, and people who are confused about a future that can make sense, economically.  this means, unfortunately, like any good business deal, both sides will walk away unhappy.  the threats about ai background players are just that, threats.  movies have been using matte prints for backgrounds for half a century.  actors won't suffer because of this, and i refuse to spend anymore time hand-wringing about ai for actors, sorry. 

going back to what queen bitch said, maybe it's time for a complete teardown and restructure.  shit, it's happening already.  half the studios/networks are a mess because of mergers, layoffs, and re-orgs.  to me, the one constant through 100 years of showbusiness is this - people like stars.  they just do.  movie stars, tv stars, whatever you want to call it.  it's hard to put into words sometimes, but you can tell the difference.  i like to call it "presence." 

and netflix and amazon can trot out lincoln lawyer and jack reacher and a bunch of shows with people who kinda look familiar, but none of it works without top-line talent, whether that's the movie stars or the showrunners or the funniest writer on snl.  this is not a traditional employer/employee mining strike.  this isn't even a ridiculous sports strike/lockout, though there are some overlaps. 

this is, or rather, this needs to be a symbiotic relationship where both sides need each other.  all the computers in the world won't change the fact that studios and networks need writers and actors, and writers and actors need a distribution channel for their art.  i don't know what will happen or how long this will last, but what comes out of it will look different.  maybe not in 2-3 months, but certainly in 2-3 years.  consolidation of the streamers, more monopolies that conveniently merge distribution with content ownership.  it wouldn't shock me if things start to look more like 2005 with fewer choices and higher price points.  showbiz was never meant to be darwinism where the consumer wins.

in fact, one could argue that's who's gonna get fucked the most on this - the audience.

 

 

tl/dr - go watch the bear.  and dave.

[wutang75 431]

I got invited as a plus 1 to the Emmy’s this year. Really sucks. I know this is CSB territory, but as a TV/pop culture junkie I was really excited about this.

There is almost zero chance the Emmys happen this year right?

[henrygandorf 28910]

12 minutes ago, wutang75 said:

There is almost zero chance the Emmys happen this year right?

my wife runs a fashion pr agency which means they dress celebrities for events.

it does not look good.  sorry.

[ChickenSandwich 9769]

3 hours ago, Nice Guy Eddie said:

The traditional residuals makes sense when there is new revenue being produced when someone watches the content. If you watch a rerun of an old sitcom or movie on TBS or NBC, the distributor generates revenue due to the ads being displayed to you. Or if a movie is rereleased in the theater, new box office revenue is generated. For Netflix, whether someone watches 1 or 100 hours of content that month, Netflix still receives the same $10-20 per month. therefore Netflix has a limited, although large, amount of revenue to create/pay for content. More watching does not equal more revenue. Note: the ad-supported version of Netflix is a hybrid model.

To me, the actors and writers should look for an agreement where a percent of subscriber fees are distributed based on what that subscriber watched. For argument sake, say $1 goes to the artists out the $20 subscriber fee. If that subscriber only watched 1 episode that month, say Stranger Things, then the $1 goes to the residuals of the Stranger Things artists. If that subscriber watched 100 episodes that month of a wide variety of shows including that 1 Stranger Things episode, then the Stranger Things artists should get 1/100 of that $1, or 1 cent.

The $1 (or whatever is considered fair) gets distributed to the artists and it's based on the popularity of the content. If no one watches a piece of content, you get nada. 

seems like the studio would be the only one with risk in this hypothetical deal.  The actors get paid upfront, the studio/streamer pays all cost of production/marketing, and if it is a success the actors get paid again, but shoulder no burden if it flops. 

[WBT 20280]

53 minutes ago, henrygandorf said:

so apple wants to make their own comedies, but they don't want to make 22-24 episodes, they want to make 8-10. 

I've posted it in some other thread but I don't understand this trend. 

Netflix paid huge money for Friends and then Seinfeld.  It was huge news when Friends left Netflix for HBO Max and the same when The Office left for Peacock.  The data must show that people will watch and rewatch these shows with 100s of episodes and that drives subs.

So why do streamers only want to make 3-4 seasons of 8-10 episodes each?

[Nice Guy Eddie 13318]

4 minutes ago, WBT said:

I've posted it in some other thread but I don't understand this trend. 

Netflix paid huge money for Friends and then Seinfeld.  It was huge news when Friends left Netflix for HBO Max and the same when The Office left for Peacock.  The data must show that people will watch and rewatch these shows with 100s of episodes and that drives subs.

So why do streamers only want to make 3-4 seasons of 8-10 episodes each?

Previously networks had to fill 21 hours of primetime content each week. For whatever reason, they landed on 22-24 episodes per season by the 90s. I believe it was 30+ episodes between Sept and May in the 50s. There was probably only a week or two off in there.

But if you're Apple, you have no inherent reason to release 21 hours of original content each week. You do what you want. They might only release <5 hours per week because as of right now, no looks at Apple TV+ as their only entertainment option. On the other hand, Netflix looks to release more than 21 hours per week given their foreign content. 

If you're a streamer, your goal should be to only create/release as much content to meet your subscriber goals. Any more could be viewed as a bad business decision.

[henrygandorf 28910]

12 minutes ago, WBT said:

I've posted it in some other thread but I don't understand this trend. 

Netflix paid huge money for Friends and then Seinfeld.  It was huge news when Friends left Netflix for HBO Max and the same when The Office left for Peacock.  The data must show that people will watch and rewatch these shows with 100s of episodes and that drives subs.

So why do streamers only want to make 3-4 seasons of 8-10 episodes each?

 

2 minutes ago, Nice Guy Eddie said:

Previously networks had to fill 21 hours of primetime content each week. For whatever reason, they landed on 22-24 episodes per season by the 90s. I believe it was 30+ episodes between Sept and May in the 50s. There was probably only a week or two off in there.

But if you're Apple, you have no inherent reason to release 21 hours of original content each week. You do what you want. They might only release <5 hours per week because as of right now, no looks at Apple TV+ as their only entertainment option. On the other hand, Netflix looks to release more than 21 hours per week given their foreign content. 

If you're a streamer, your goal should be to only create/release as much content to meet your subscriber goals. Any more could be viewed as a bad business decision.

the feeling also is that if your seasons are only 8-10 episodes, you can attract better talent, because they can take a gig without it eating up their whole year.

harrison ford isn't going to do 24 episodes of shrinking.  mcconaughey and harrelson aren't doing 4 seasons of true detective.  ben stiller isn't directing 22 episodes of severance.  and so forth.

[Longhornsnus 200]

3 minutes ago, henrygandorf said:

 

the feeling also is that if your seasons are only 8-10 episodes, you can attract better talent, because they can take a gig without it eating up their whole year.

harrison ford isn't going to do 24 episodes of shrinking.  mcconaughey and harrelson aren't doing 4 seasons of true detective.  ben stiller isn't directing 22 episodes of severance.  and so forth.

But then you lose TV sitcoms as training ground and dojos for star making (to your point about stars). You arguably wouldn't have huge Film stars that drive huge revenues without TV. You wouldn't have a George Clooney without an ER or a Jennifer Aniston without a Friends or a Woody Harrelson without Cheers, Will Ferrell without SNL, etc.

But maybe that's the old way of thinking. 

Edited July 18, 2023 by Longhornsnus