The new agreement between Hollywood studios and writers provides streaming residuals and data transparency and could impact new movies and shows.
- The new WGA basic agreement addresses demands for more transparency in streaming data and performance-based pay for writers, impacting Hollywood in multiple ways.
- Studios will provide streaming data to the WGA under a confidentiality agreement, but this data will not be made available to consumers or the media. It will be used to ensure proper compensation for writers, not for industry insights to the general public.
- Writers will now have more confidence in their pay from streaming projects, as the agreement introduces a structure for bonus pay based on performance. They will have to trust the WGA’s internal review instead of relying on the studios’ lack of transparency.
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One of the biggest demands during the Hollywood writer’s strike was for more transparency with streaming data and performance-based pay on streaming shows. The new WGA basic agreement provides a solution for both of those demands, which will impact Hollywood in a few key ways.
Historically, the performance of movies and TV shows has been publicly available through box office reports, TV ratings, home media sales figures, and more, and all of those elements impact the pay of writers and other creative talent. If a movie or show performed well financially, writers and other talent would get a percentage of earnings as a residuals check. Because the streaming model works differently and data wasn’t publicly available, writers felt they were being denied the equivalent residuals they’d receive from other distribution methods. Now that this data will be (partially) available and writers will be paid for performance, here’s how it’ll impact studios, writers, and the audience.
Related: Hollywood’s New AI Rules: Here’s What Studios Can & Can’t Do
Studios Will Provide Streaming Data to the WGA Under a Confidentiality Agreement
The first thing to note about the proposed WGA basic agreement’s terms on streaming data is that it’s not going to be made available to consumers or the media. The studios agreed to provide the total number of hours streamed both in the US and Canada and internationally as well as the running time for each “high-budget SVOD program.” The WGA will designate up to six internal representatives who are permitted to review the streaming performance data and have permission to contract with a third-party vendor jointly chosen with the studio to perform an audit to verify accuracy.
The designated WGA representatives are only allowed to share the data with members in “aggregate form,” meaning they can provide insight into how the industry is performing as a whole, but they cannot share detailed information that would give any insight into the performance of a particular movie or show or any individual members of the cast and crew. While the media and audiences are also desperate for this data, the WGA’s purpose is to ensure its members are properly compensated, not to provide industry insights to the general public. Hopefully studios will find a way to provide more public transparency in the near future.
Writers Will Have More Confidence in Their Pay From Streaming Projects
The new WGA agreement also provides a new structure for writers to receive bonus pay based on the performance of streaming programs. In the past, studios would pay more up front for streaming projects to account for the lack of residual pay, but the lack of performance-based pay meant writers had no way of knowing if they were missing out on potential bonuses for high-performing streaming projects because studios wouldn’t provide any data for comparison. While the new data-sharing agreement won’t necessarily give writers insight into the performance of their respective projects, they now have to trust the WGA’s internal review instead of trusting the studio’s lack of transparency.
How The WGA’s New Streaming Agreement With Studios Could Impact Project Greenlights and Cancelations
The past few years have been a virtual arms race in streaming content as each platform pours hundreds of millions of dollars into exclusive content in an effort to lure a larger audience. We’re already seeing this race reach critical mass with massive cancelations of streaming projects and even extreme situations such as the cancellation of HBO Max’s nearly complete Batgirl and Scoob! Holiday Haunt for a tax write-off. This kind of behavior isn’t unheard of in traditional television or movie production, but it happens way more in streaming, but this new deal could have an impact on that.
There’s multiple reasons for the frequent cancelation of streaming content or content getting removed from streaming platforms. First, the studios are flooding the market with streaming movies and shows to boost their offerings, meaning those projects aren’t subject to the same level of rigor or audience demand as something being distributed theatrically or on TV, meaning a higher percentage of it also gets canceled. Second, because the streaming model is all-you-can-binge for a fixed subscription price, viewership is no longer an asset – it’s a liability. More viewership on certain movies or shows makes them more expensive without making them more profitable, leading the studio to cancel or remove them.
Given this context, it may seem like paying residuals on projects would make viewership even more expensive, leading to more cancelations, although that’s not necessarily the case. The expectations for increased cost for high-performing content means streamers will now be disincentivised to greenlight projects that don’t impact subscriber numbers or revenue. This may result in fewer projects being greenlit overall, but will almost certainly decrease the percentage of canceled or removed projects since they’re now more accountable for the performance of all the content on their platform.