Economy

Why You Might Have to Wait for More of Your Favorite TV Shows

April 21st 2017

By:
Eoin Higgins

A writers strike could be coming to Hollywood.

That's not great news for people who love their broadcast television shows. The last strike, in 2007, lasted 100 days and set back production on a number of popular shows. Today's media landscape is different, though, with the rise of streaming — and it's unclear what the entertainment industry will look like if a strike goes ahead. 

The Writers Guild of America met on Tuesday to begin discussions on whether to strike. Voting ends April 24; the writers are widely expected to endorse a work stoppage — and if they do, the strike would begin May 1.

During an appearance on the Writers Guild podcast 3rd & Fairfax, WGA West President Chris Keyser told host Steve Trautmann that standing down on the strike would amount to a surrender.

If that were to happen, he said, "We are essentially telling the companies, ‘You can give us whatever you want.'"

Keyser added that giving the guild the authority to strike is not the same thing as instructing the guild to strike. The threat of a strike is itself a potent negotiating tool. The guild can use the possibility of canceled shows and slashed profits to compel the studios to the negotiating table.

The guild is seeking a $178 million-a-year deal with the studios.

The writers say they want a larger share of streaming royalties and revenue, as well as better health care benefits.

Online revenue was one of the victories from the 2007-2008 strike — mostly because the online end of the industry was new and underdeveloped.

"Back then they were like, ‘We don’t even know if the Internet’s gonna be a thing,'” Mike Royce told Vanity Fair.

Royce, a writer and producer on the Cuban-American family comedy "One Day at a Time," told the magazine  he thinks the writers' demands are "reasonable" — after all, they're only asking for a modest pay bump and a higher health insurance contribution from the studios.

According to Esquire, a record 455 scripted shows were produced last year. But shows are being ordered in 10 to 13 episode runs, not 22 to 24 episode runs as in the past. That shorter schedule, combined with no-compete clauses that bar writers from working on more than one show at a time, is cutting into writers' pay.

The WGA argues the current state of affairs is disadvantageous to writers. Salaries for writers and producers have declined 23 percent in the last two years. Meanwhile, the studios are making more money than ever., with the industry reporting $51 billion in profit last. And tat profit is going to those at top: The CEO of CBS, Leslie Moonves, received a compensation package of $69.6 million last year, an increase of 22 percent from 2015.

What are the long-term ramifications of a strike?

A strike would immediately halt all writing on scripted media. The impact would ripple across the industry, starting with late-night talk shows and some soap operas. Depending on the pace of negotiations, it could also affect fall premieres.

The TV industry lost 25 percent of programming and at least $380 million in revenue in 2007-2008. The guild hopes things won't come to that this time. But their past willingness to go all the way gives added weight to their threat to strike now.

Digital media could be the big winner.

The 2007-2008 strike took a hatchet to ratings, but broadcast viewership was higher a decade ago than it is today. Streaming services and DVRs, while they existed, were not major players in the market back then— but dominate viewers' eyeballs today.

Streaming services have deep benches of content from decades of production on the television side. It's possible consumers will decide to tune out completely on television and enjoy the original content from overseas, or binge watch old shows on Netflix and Hulu rather than wait for new broadcast television.

In short, the strike could have far reaching ramifications for the entertainment industry by further entrenching streaming services and digital television. The writing's on the wall.

"While Netflix and Amazon’s pipelines are also likely to be affected by the writers’ strike, their library of original content could realize much wider viewership in the absence of competition from legacy TV. These companies also have the ability to source content globally, as evidenced by the number of British shows on Netflix," Kannan Venkateshwar, an analyst with Barclays, wrote last week.

The strike could be the fatal blow to a dying industry, Venkateshwar argued, with advertising revenue shifting even further away from broadcast television.

"Given the anemic growth rates for television advertising already," the analyst wrote, "any uncertainty over the fall season is likely to force more advertisers to expand their allocations towards digital platforms.”

Broadcast television is dying and digital television is growing. If TV writers elect to strike, it could be the labor fight that puts digital content on top for good.