Rushfield: 70 Days to the Abyss
Is anyone paying attention as the last stand of Hollywood as we know it approaches?
"Man looks into the abyss and when there's nothing staring back at him, that's when he finds his character. And that's what keeps him out of the abyss."
— Oliver Stone, Wall Street
This story originally appeared in The Ankler.
Hollywood lives with its finger on the panic button, and Hollywood trades live with five fingers permanently pressing the panic button for all its worth.
Quarterly earnings were down! It's the end of the world! Subscriptions were flat! It's the end of the world! Our favorite division head was fired! It's the end of the world!
That said, latent hysteria notwithstanding, we might actually be at the end of the world, or at least this one as we know it, as the WGA contract expiration deadline of May 1 looms.
The Guild might be made up of 20,000 Leon Trotskys, but the Guild didn't create the breakdown. And it's not in the Guild's power to singlehandedly fix it.
Problem is, we've got a host of factors creating a perfect storm of intransigence and cluelessness. And the scenarios by which the studios and streamers get it together and deal with the issues on
the table depend upon — forget public-spiritedness — just a capacity to grasp the essence of this industry right now.
A couple of qualifiers before I get into this:
While I might generally be the Oracle of Gloom, since I started The Ankler when the past contract showdowns have come around, my predication has always been firmly on the side of “they'll work it out.” Even on the last WGA contract in 2020, when the entire media was saying a strike was a certainty, The Ankler Strike-o-Meter never put the odds above 20 percent.
I also haven't been a knee-jerk “To the Barricades!” rabble-rouser on WGA affairs. On the agency action, my feeling was largely confusion over why that was the fight to have at that moment, and on the last contract negotiation, I thought the issues were too nebulous and murky to shut down all Hollywood.
So those are my bonafides and where I'm coming from when I say:
I'm not seeing a lot of happy outcomes here, almost any way this goes.
For the writers this time, this is truly an existential stand — not just for them but for the entire industry, and they have no choice but to see it through if the fundamental issues are not addressed.
The problem is, having let the issues around economics and compensation slide for a decade, the time for incremental improvements has passed. The Streaming Wars swept in and, willfully or not, upended the basic structures that allowed Entertainment Inc. to keep a very number of highly-skilled artisans employed or even involved at a livable income. Those structures sustained the worker army that allowed Hollywood to create a huge volume of production at the world's highest standard of quality.
Now that those structures have been smashed, our ability to do that stands in doubt, and the writers are but the tip of the spear of that problem.
But to fix all this, to rebuild entertainment as a sustainable profession for a vast middle class of artisans will require a fundamental, basic reordering of the priorities of the streaming era. And to that I say:
Long overdue and
Lotsa luck....
The Issues
Looking at the issues the WGA seems to be coalescing around (residuals, basic wages, mini-rooms, short orders, years between pick-ups), the solutions fall into a couple of buckets:
A whole reworking of the basic tenants of the streaming business.
Major, significant increases in pay to compensate for the disruptions of the Streaming Wars, which would transform the economics of many shows and studios.
We can have a fun parlor game about which one of the streamers is most likely to come around, but does either scenario sound particularly likely to you?
The tech titans arrived on these shores with a particular understanding of human labor — that value comes from the minds of a very small number of elites (“founders”) at the very top of the pyramid. And the work done below that level is interchangeable, almost totally so when you get one or two rungs below the elites.
Some headlines of the last decade (granted, edited for effect) certainly tell a story:
From Slate:
From Fast Company:
From Wired:
Why Entertainment is Not Ride Sharing
This understanding of elites vs. worker bees had served the tech titans well in the many other industries they had “disrupted.” But it reflects a catastrophic ignorance of the way entertainment is produced. An ignorance that their arrogance gave them no interest in re-examining.
They have built a new system that is unsustainable and unlivable for all but those at the very, very top. For most of us, we see this as a disaster that has to be dealt with if the entertainment professions are going to survive. But for those in the tech world, this is just how you “achieve scale.”
My gloom grows when I look at how this could play out; not because of the intransigence of the writers, but the complete lack of leadership from the studios. In the decade leading up to this, not one of them has taken these fundamental problems in sustaining their industry seriously.
Question is: what is going to change their minds?
To recap the history of entertainment a bit, residuals weren't thought up as some kind of little perk like free Cliff Bars in the break room to make employees feel special. They were deferred payments in lieu of salary.
When the techies arrived here there was a certain logic in just buying out all the rights, but buying them out generally means paying for them. And in the headline-grabbing megadeals with the brand name showrunners, that's how it went.
Problem is, that promise never materialized down the line. And then, as has been noted here, the seasons got shorter and fewer. The staffs got smaller. The schedule got more compressed. And the region got vastly more expansive.
Add a decade in which no one saw this as a problem that had to be fixed but just solved it by... producing lots more of the same.
So given all that, where does this go?
The coverage and chatter on the strike have focused heavily on the militancy of the Writers Guild — a subject I've had a few words on during the past movements. But at this moment, that is not the point, at all. The Guild might be made up of 20,000 Leon Trotskys, but the Guild didn't create the breakdown described above. And it's not in the Guild's power to singlehandedly fix it.
As is widely noted, the WGA might well be subject to the whims of its unemployed or underemployed members who see a picket line as a great adventure and have nothing to lose by striking.
But if that militancy ever had a time and place, it's right now. We're not talking about a situation where the studios are offering 7 percent raises and the Guild is willing to settle for 9 percent but these hotheads won't let them. Unlike in past negotiations, the survival of the profession is more or less on the line here. So we can roll our eyes at loudmouths on Twitter (and I will), but given the stakes, militancy doesn't seem a completely out-of-line response.
Reports have also gone the opposite way, suggesting that in this moment of anxiety, the writers won't dare push too hard. My sense in talking to many over the past weeks is that, while certainly no one wants a strike — and dread is not too strong a word to describe their feelings — there's a pretty unshakable resolve that something has to be done, and this is perhaps the last moment to do it. Note that in the past few years, every time it’s been put to a vote, support for a hardline has gotten somewhere in the 90 percent range, and the last Board elections saw a very hardline group of candidates win with overwhelming majorities.
As for the Studios/Streamers…
If anyone on the studio side is living under the illusion — as scuttlebutt suggests — that the writers won't have the guts to go through with this, they oughta disabuse themselves of that fast.
As for the studios, as it happens every time a contract comes up, they are crying poverty. The costs of fighting the Streaming Wars you know.
We can’t possibly give increases when we have to launch 5,000 new shows every week! Their argument thus far seems to be we have no money to give you because we need every pound of cash we can get our hands on to throw onto the bonfire.
Having created a totally unworkable situation, they are saying, “Don't look to us for help; we have to sustain this totally unworkable situation!”
We've come to the final blind alley in the chase for the great streaming horizon.
And this is where my gloom grows when I look at how this could play out; not because of the intransigence of the writers, but the complete lack of leadership from the studios. In the decade leading up to this, not one of them has taken these fundamental problems in sustaining their industry seriously, and if anyone's stepping forward to do so now, somehow I've missed that.
Worse still, I don't know how they come together when they aren't even playing the same game. In olden times when it came to the contracts, everyone was basically in the business of making TV shows and films and more or less understood that you need a staff of professionals to do that. Some chieftains were more tight-wadded than others, but they were working from the same premises.
As Ken Ziffren broke down in his piece for The Ankler, everyone is playing a completely different game now, and everyone is at a very different place in that game. How does Paramount get on the same page as Apple, when nobody even knows why Apple is in this business? How does Warners Discovery sync up with Amazon's count of how many new shows it takes to get how many new Prime subscribers to sell how many boxes of diapers?
Wish-Casting
Netflix, as ever, sits at the center; still very much a tech company, but with much more than just a little toe in Hollywood by now. Netflix sits on its mountaintop, still the default streaming service, glaring down on all the pretenders. On one level, a shutdown of the industry would work to their benefit. The challengers would be hit first and harder as the subscribers drift away from the barren services. Their position at the top of the mountain would be cemented into place, and surely with their vast pipeline, they have more in the works to see them through the drought than anyone else.
But as commanding as their position is, no one is truly safe in these times. Looked at Tubi or Pluto lately? A viewer could keep busy for a long time on a good old linear service which is, by the way — free! Not to mention YouTube or TikTok. Or a pirate site while you're at it.
It's tempting to wish-cast that the legacy studios could band together and cut their own good old legacy-type deal with the WGA, and leave the streamers out in the cold. But on the flip side, if the streamers really wanted to use this moment for a grand Machiavellian gesture, they could get together and cut a generous deal with the Guild that would be ruinous to the legacy studios.
The scenario of a wholesale reworking of the business ultimately seems like the most wish-casty of scenarios. This industry is too lumbering to pull off wholesale reworkings. The idea that the streamers will open up their data seems impossible. For tech companies, data isn't a byproduct; its the religion. It's like asking Batman to open up the Batcave for tours and let visitors ride the batpole up to stately Wayne Manor. For them, that's the whole ball of wax.
But can they make real improvements in pay that make the streaming system workable — knowing the other Guilds will demand the same? And that the new pay scale will likely destroy the economics of the firehose?
And The Strike-O-Meter Stands At…
On the other side, to inject a note of hope here, after all this I’m putting the Strike-o-Meter at 65 percent, not 100 percent, because I think in the end when studios stare into the abyss, that’s not a leap that publicly-held companies like to take. Maybe Apple and Amazon’s stocks are insulated from the effects of a strike in this little colony of their empires, but no one else’s is. Yes, maybe for Netflix, there’s a 3D chess maneuver where the strike ends up being the best thing that ever happened to them.
Maybe, but in the meantime, its stock is likely to get walloped and can you imagine the quarterly call if subscriptions have a major falloff thanks to a shutdown? As we’ve seen in the last year, it’s not like its stock is sitting on bedrock. To say, nothing of Disney, Warner Bros. Discovery, Comcast…
As painful as all the concessions would be for them, when they realize the writers aren’t backing down and look into the abyss, I think at least some of them are going to swallow hard and be ready to deal.
Not to get too maudlin, but here's my For Want of a Nail, the Kingdom Was Lost thought.
There's nothing less riding on this showdown than the survival of civilization.
If the writers lose, if they walk away still looking at an industry which no longer can support vast ranks of skilled professionals, then Hollywood as the provider of high-quality cultural products begins to crumble. When the shows are written by a bunch of unpaid interns, meeting for a couple weeks over Zoom — the road to TikTok is clear and that's where it all ends up.
Crazy as it sounds, I believe in the importance of high-quality cultural products. I believe that watching and engaging with well-crafted characters and stories is an enriching experience; analogy is how we learn to relate to others in this world. When culture collapses to just 45-second videos of people crashing skateboards into walls, Roblox walkthroughs and make-up tutorials, the level of barbarity increases; and increases a lot. And if you haven't noticed, the waterline on barbarity is already 10 feet high and rising.
So that's all that's on the line here in this WGA negotiation. No pressure or anything. This just may be the very last chance to Fight the Firehose! (Feel free to take that as a slogan.) We've all got a lot on the line here. Studios — you made this mess. Get it together and fix it.