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SAG Strike Getty 1.jpg

Studios Are Terrified That the Strikes Will Reveal the Truth About Streaming

By Kayleigh Donaldson | Film | July 17, 2023 |

By Kayleigh Donaldson | Film | July 17, 2023 |

SAG Strike Getty 1.jpg

We are now part of the Summer of Strike. After failed negotiations with the studios and corporations who run the entertainment industry, both the Writers Guild of America (WGA) and Screen Actors Guild (SAG-AFTRA) have taken to the picket lines. The actors’ issues are near-identical to those of the writers, with questions over the increasing proliferation of AI and the paltry residuals of the streaming model.

Many actors and writers have taken to social media to share the laughably small cheques they’ve received for years’ worth of work thanks to platforms like Netflix. The New Yorker recently published a piece revealing how many of the actors in Orange is the New Black, one of the service’s first breakout original series, struggled to make ends meet despite their apparent success. Kimiko Glenn showed off a royalties payment she received that totaled $27.30. Matt McGory said he had to keep his day job the entire time he was on the series, while Diane Guerrero had to do bar work and face the embarrassment of patrons recognizing her. Lori Tan Chinn, who appeared in six seasons of the show, said she considered going on food stamps until she was cast in another series that paid better.

For the record, Netflix CEO Ted Sarandos earned a reported $22 million last year alone in salary, plus stock options.

These stories have become increasingly prevalent over the past few weeks, and they’ve only further exposed the rot at the heart of an industry that has tried to reinvent the wheel with its pivot to streaming. The promise that we were all sold, one of instant accessibility and a new era of creative democracy, has long been revealed as yet another corporate cash grab built on the shakiest of foundations.

When Netflix moved from sending DVDs to subscribers to original streaming content, the floodgates opened in Hollywood. This was something they had long tried to get off the ground. In 2000, Blockbuster signed a 20-year deal to introduce on-demand entertainment with, uh, Enron, that never got off the ground. With Netflix, the bounty that they suddenly offered was two-fold: tons of new programmes and movies you would never be able to get anywhere else, plus all your favourites that could be watched over and over again. Other companies launching their own streaming platforms certainly felt inevitable, but the near-utopian system they sold couldn’t help but feel freeing to creators and audiences alike. More opportunities for stories! Less money tied up in ludicrous cable packages! How could it fail, especially when we were getting so many smash series like Orange is the New Black and Stranger Things?

Hovering overhead was the debt. Netflix’s debt as of March 2023 was around $14.4 billion. The Los Angeles Times reported in November 2022 that Disney’s direct-to-consumer division, which includes Disney+ as well as Hulu and ESPN+, calculated an operating loss of nearly $1.5 billion, more than doubling its loss of $630 million during the same quarter a year earlier. Warner Bros. Discovery is saddled with $50 billion of debt. Where the hell is the money going? It’s certainly not benefitting the people who actually make the content that keeps these platforms (barely) above water.

The operating costs are gargantuan, and every platform is paying through the nose for the kind of flashy, hype-driven work that will encourage people to subscribe to their service. Consider how Amazon spent half a billion dollars on the first season of The Lord of the Rings: The Rings of Power in hopes that it would make Prime something of a default streamer for its audience. Paramount+ is reportedly paying $10 million per episode for Halo. Disney+ is putting down a reported $25 million per episode for its Marvel series. Some of these shows have certainly brought in eager viewers, but it’s never enough, not when their model can only succeed with near-impossible monthly targets of new and paying subscribers. Most people can’t afford to subscribe to all of these services, and even the ones they’ve enjoyed have gone on the cutting block during tough financial times. The cable bundle prices are back but now we’re paying more for less, especially as shows and films are pulled from their various streamers for tax reasons.

It’s no wonder the writers and actors are on strike. It’s now practically a privilege to have a show that stays on the platform it was made for. The lack of transparency over viewership numbers is a major sticking point for both unions, and the studios won’t budge one inch. How can they? To do so will expose their entire system.

Think of the two major possibilities here: Either the studios owe untold millions to their talents and paying it out will decimate their stock prices, or they owe so little because there really is no money in streaming and the bubble of their entire 21st century business model will burst in spectacular fashion. And make no mistake: this is a bubble. This is the inevitable climax of a stockholder-driven hunger for infinite growth, despite the fact that, by design, such a thing cannot and should not exist. The infection of Wall Street has overwhelmed the entertainment industry beyond repair, leading to cultural vandals like David Zaslav to be appointed with the callous duty of strip-mining decades’ of artistic beauty for pennies of tax write-offs. The past and future are frivolous in comparison to the short-term demands that the line keep going up. If that means denying tens of thousands of workers the money they are contractually entitled to then so be it. It’d be comical if it wasn’t so calamitous.

The bubble is ready to pop. It will, sooner or later, and the chances are that the pressures of these dual strikes will reveal that the emperor has no clothes quicker than the CEOs desire. The sad part is that the catastrophic after-effects won’t hurt the likes of Zaslav and Iger, who have exacerbated a broken industry’s tensions to breaking point. They’ll still get their mega-yachts. There will always be money, just not for the vast majority of workers who are owed it, and when streaming breaks, they’ll be the ones hurt the most painfully. The line will eventually go down.