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Success-Based Residuals

There was a brief flash of hope that the writers strike might soon be resolved—followed by the predictable yet disappointing update (see Deadline) that the writers and studios (AMPTP) failed even to agree on what they would be negotiating.

Make no mistake, I am wholly on team writer and team labor. The studios have used the past 15 years of technological change to screw the writers and actors out of what used to be decent careers.

The guilds are pulling a Dean Wormer, and I think they (we) are going to win major changes:

Buried inside the WGA’s new statement (published in the Deadline piece) is a telling snippet:

“She [Carol Lombardini, AMPTP negotiator] stated they were willing to increase their offer on a few writer-specific TV minimums – and willing to talk about AI – but that they were not willing to engage on the preservation of the writers’ room, or success-based residuals.”

I think the whole ballgame is not the future of A.I. (it’s important, but still experimental enough that it’s hypothetical), but the success-based residuals. (I’ve written about this before.)

“Success-based residuals” means that the writers receive royalties based on how much their films/TV/content gets watched on the streaming platforms.

Not only would the studios have to create a new royalty where there presently isn’t one, but it means, by definition, they would have to disclose their viewing numbers.

And I think they’ll go to the brink not to do this.

It’s everything to them. It’s not just the money they’d have to part with—and spend internally to calculate and distribute the royalties—but the secrecy over their numbers lets them play games with Wall Street, and compete with each other by mining their own data for analytics.

It’s like asking Coca Cola to reveal its secret formula. They’ll die first.

And it’s not something you can “sort of” do. You either reveal the numbers, or you don’t. (I guess there could be categories, but then they’re trusting the streamers to honestly place their content into categories.)

I saw in one article the AMPTP pointed out that the actors and writers technically get their royalties from the producers, not the streamers—and the producers, themselves, don’t get success-based residuals. So the AMPTP tried to explain to SAG they were barking up the wrong tree. But of course the guilds aren’t having it.

This is such an existential issue that I’m sorry to say it may be several months before the AMPTP gives up and realizes they will have to reveal these numbers—although they’ll try their best to keep them veiled somehow.

As for the other sticking point in the above quote, the mandatory minimum of writers that have to be employed in a writers room for television—I think just by logic the studios win this one. I think the horse-trading will be, “Okay, we’ll finally cave on the streaming residuals, but no way are you getting the writers’ rooms—outside of some meager lip-service.” And the WGA will have to eat it.

Also, I don’t quite understand how some writers like Taylor Sheridan and Mike White, who write their entire seasons solo, are supposed to pay writers to be on their shows but not write. Which means you have to create exceptions, and of course those exceptions become endlessly abused.

We’ll see. And, in the meantime, wait—and march.

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