From The Wall Street Journal:
Fewer new shows in production. A higher bar to get shows renewed. Rich paydays going only to an elite few.
The labor pact writers struck with studios and streamers this week, ending a five-month strike, will likely accelerate the retrenchment that was already under way in Hollywood for more than a year. It represented a formal end to “peak TV,” a decade that included an explosion of programming for viewers—and job opportunities for talent in Tinseltown.
Writers won major concessions in the deal, including new bonus payouts and higher royalties. Those hard-won victories are especially important given the hard financial realities of the entertainment business.
A combination of debt-laden mergers, mounting losses in streaming, and the fast-shrinking cable TV bundle, has led to a push on Wall Street for entertainment companies to rein in spending.
The streamers will have to find a way to pay increased talent costs—from the writers’ settlement, along with an earlier deal with directors and whatever is finalized with actors—without adding to their overall production costs.
That will likely mean that companies will make fewer new shows and cancel even more that are on the bubble. In effect, while many people in Hollywood will get better pay as a result of the deal, the contraction in spending means there will be less work to go around.
“The gusher of spending—I don’t see that marketplace coming back,” said Kevin Reilly, who held top programming positions at Fox, NBC and the streaming service HBO Max, championing shows like “The Office” and “The Shield” along the way. “Everyone will get a better piece of what they’ve created. But if anyone is thinking, ‘Let the good times roll!’—that won’t happen.”
One veteran TV producer predicted the number of scripted shows Hollywood produces could fall by one-third in the next three years. “The contraction in investment in content will by definition restrict the amount of work that’s needed,” the executive said.
For most of a decade, streaming companies were antiestablishment insurgents. Now, streamers, from Netflix to Max to Disney+ to Amazon Prime Video, are the new establishment, and the negotiations with writers reflected that.
Mike Royce, a writer-producer whose credits include “Everybody Loves Raymond” and the Netflix reboot of “One Day at a Time,” said pushing for better terms was a no-brainer, regardless of whatever programming cuts might be coming, because the old system wasn’t working.
“There is no, ‘You’ll cut off your nose to spite your face,’ ” he said. “Our faces had already been eaten. The world we were in, we had lost so much.”
Writers were upset that streaming didn’t offer the same rewards for success as traditional TV. Under the new deal, they secured bonuses when their streaming shows perform well. They were concerned about a movement toward smaller writing rooms—a cost-cutting measure as streamers continued to bleed money—and won a provision that imposes minimum staffing requirements.
The studios held the line on key issues. Streamers won’t publicly release viewing data, despite the writers’ demands for transparency, but instead will give data on how shows fared to the Guild confidentially to share with its members in aggregate form.
Link to the rest at The Wall Street Journal