The Grand Illusion
The 2023 WGA strike is the labor dispute between the Writers Guild of America — representing 11,500 screenwriters — and the Alliance of Motion Picture and Television Producers. It began at 12:01 a.m. PDT on May 2, 2023. Primarily, the strike is over pay and working conditions. The industry wants to cut down on costs by having smaller writers’ rooms (mini-rooms) or doing without them altogether and relying more on “gig” writers. This isn’t setting well with writers, given that writers only receive about 2% of the total revenues generated out of their work.
While it doesn’t affect me directly and personally, I certainly understand the struggle, because it’s symptomatic of more than just broadcast and cinema media, representing as it does the struggle between “creators” and “packagers.” This dichotomy doesn’t just exist in entertainment; it’s just more obvious there.
There have also been recent incidents in the “book” side of the F&SF industry, where it came out that Disney was refusing to pay royalties to authors whose books had been made into movies. I don’t have that particular problem, since none of my books have ever been turned into movies or television series, but some authors have, and the Disney incident is indicative of just how little corporate CEOs value the ideas and craft behind what they market.
At the same time, I suspect very few F&SF fiction writers make the kind of money that run-of-the mill screenwriters make, but then, we usually don’t have to operate under the deadlines that they do.
Authors published traditionally share certain concerns with the WGA writers, such as how the publishers (i.e., packagers) present their work. Indie authors who publish their own books have greater control over their presentation – but also take on a great deal more work.
I have mixed feelings about the WGA strike, except that I definitely share the strikers’ concerns that the industry “packagers” are minimizing the strikers’ contribution to the final productions, not that it’s anything new.
The strike is complicated by the fact that no one really knows how to make a long-term profit with streaming. All the services invested in trying to get as many subscribers as they could but now they need to match their expenses to the income. For the services without ads, income is based on subscribers and has nothing to do with views. Most shows add no value to the streaming service. Only the shows that bring in new subscribers or keep subscribers on the service contribute to revenue.
In addition, unlike many other subscription services it is fairly easy to drop and re-add or pause the service. Also while new shows can be considered the cost of adding users, it is relatively cheap for the streaming service to add a subscriber as compared to cell phone service which usually costs a new phone to the cell phone provider.
The costs to the streaming service is the cost of the shows and the cost of IT. More shows just increase costs, and most don’t contribute to retaining subscribers. As Netflix revealed if you don’t finish a show, you are unlikely to drop the service because the next season isn’t going to exist.
All the streamers will have data on what behavior or probably lack of viewing leads to the service being dropped. They will also then know when shows a person who fits the profile of someone about to drop change that profile to someone going to stay a little while longer.
It is easy to identify which shows matter to the revenue stream and which ones don’t.
In terms of IT costs, more views equals more cost. The streamers are paying for cloud services for their IT and when there are more viewers watching more services are used and the costs go up. So a popular show that doesn’t bring in users, just is expensive. The shows that are background TV for people are just a money sink.
With the current financing method, views also require a royalty fee at least for the new shows. This just drives up the cost without increasing income. This is why the streaming services are transitioning to ad based. Each view equals income. Netflix clearly has done the math on how much extra no-ads costs them and are raising the rates accordingly. They also seem to be the service that kills the most shows. Amazon is in a slightly different situation in that Prime is stickier than just a streaming service because of the other benefits. I will keep Prime as long as I know the Amazon delivery drivers by name.
The streamers will also have to figure out how thin their offerings can be without collapsing. Right now consolidations are popular especially since they get exclusive rights to specific programs. I would expect that studios will pop up like tech startups to limit the costs and exposure for the large streamers. It also changes the pay structure for the writers and actors.
Oddly enough, the writers and actors should be encouraging the ad based services as the streamers know how to calculate the income for those works. Royalties increase as views increase along with revenue. This also means the quality or at least popularity is rewarded.
Bill. A question on YouTube. I subscribe to the ad free service.
How does YouTube reward those who post videos on such a service? Views or time watched or a cut of the sub or something else? Looking this up did not give me a clear answer.
I checked around and was told – has to with a combination of subscribers, views, and people getting notifications when you post new content. For figuring a pricing model I would take the amount paid by subscribers divided by the number of minutes watched by subscribers divided by to get income per minute. Then take 10-20% and that is what would be paid. Based on the feedback there are minimums to avoid paying people pennies. A submitter would have to have a minimum of so many thousand views and so many posts, etc so that they get their first payment when they have earned $100 or more. Then no payments less than $50 for example. I don’t know the numbers obviously. It also seems like they skew to reward people who do really well and underpay the below average folks. I would imagine that it works similar to the streamers in that people who pull new people into the site get rewarded and those that don’t don’t.