Did Hollywood Writers Get Their Happy Ending?

Hello, this is Ywande Kamalaka from New York Times Cooking, and I'm sitting on a blanket with Melissa Clark. And we're having a picnic using recipes that feature some of our favorite summer produce. Ywande, what did you bring? So this is a cucumber agua fresca. It's made with fresh cucumbers, ginger, and lime.

Ah ha!

It's really easy to put together and it's something that you can do in advance. Oh, it is so refreshing. What did you bring, Melissa? Well, strawberries are extra delicious this time of year, so I brought my little strawberry almond cakes. Oh, yum.

Oh, thanks.

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I have sticky strawberry juice all over my fingers.

It looks like at this moment that the writers really prevailed. You know, it's funny, when the writers last went on strike, which was 15 years ago, 100-day strike, so more than three months, after that strike had ended, after they reached that tentative agreement, the guild leader sent out an email that said something like, you know, we didn't get everything we wanted, and, you know, we've sacrificed countless hours during this struggle, but we did well. This time, when they announced the tentative agreement, which was on Sunday night,

WTA! WTA! WTA!

We just found out there's a tentative agreement on the writers' strike.

It might be over.

I mean, it was, like, vibrating with excitement, that message.

It makes me very excited because I think we might have actually saved the film and TV industry with this strike.

They came out and said, we say this with great pride, that this deal is exceptional.

There has been so much at stake, and they would not settle for a subpar deal because we're not settling over here.

So there is a perception within the writers' guild that they got a big W, like capital W, like capital V for victory.

Capital V for victory for the writers. And we talked about this before, John, on the show, but just remind us what it was that they had wanted. I mean, you know, the strike has been framed in pretty epic terms, right? A showdown over what it really means to be a creative force in the era of the streaming revolution, when the technology and the economics of the entire industry have been changing before our eyes. But nitty-gritty, what were the writers asking for?

Epic is one way to describe it. Another way they described it was, literally, this is existential. This moment is existential. We are fighting for our survival. But by far the biggest issue was compensation.

Okay, so more pay was really the number one issue. What else were they asking for?

They also wanted a little bit of transparency. Again, if we look back 20, 25 years ago, we know how many people watched that episode of Friends or Seinfeld or ER. Nielsen used to tell you how many millions of viewers were watching it. We do not have that same level of transparency from an Amazon or Hulu or a Netflix.

Though presumably they know it, given the fact that it's clicks, right?

For sure. They definitely know it. And they'll give us something these days, where here's our top 10 in the United States today. But the writers, they wanted to know that if a show is a mega hit, we want to profit from that too. That's the way the old system used to work.

And what exactly were they asking for when it comes to AI?

I mean, there were several different things, but let's focus on one, which is if I'm a studio executive and I have a stack of Nora Ephron scripts, she wrote You've Got Mail, for instance.

Famous writer.

Among many other great movies. But I take those scripts, I feed them into the AI robot, and I say, give me a Nora Ephron style of a rom-com, of a romantic comedy. That is the writer's worst nightmare, because they don't want a robot to be the accredited writer of a movie. So no good. No bueno.

I mean, I don't want a robot to be an accredited writer of my article. I mean, this is like kind of scary, right? Robots should not be replacing writers.

That feels reasonable to me.

I feel tribal about this. Okay, so that's the basic list of things the writers were asking for. And now, Tuesday afternoon, we are about to live into the answer of what they got. What do we know about what they did get?

So, it's going to become more clear in the coming days. But we know that they got a lot. We know they got much of what they asked for. And, you know, we were talking about their statement vibrating with joy earlier.

Exactly, right.

The studio's only statement was the Writers Guild of America, the Writers Union, and the Studio Alliance have reached a tentative agreement. Period. Full stop. That's it. It was pretty muted.

Translation, we got a lot of what we wanted.

Yes.

Okay, so the studios checked all the boxes that they put out there. How do you explain such a victory for the writers? Because, I mean, for months it just didn't seem like the two sides were even talking. Like the story was the picket line. So what got everyone back to the negotiating table and ultimately to a deal?

So there were a few key moments. So after the writers go on strike, that's early May, all of a sudden the studios have two other contracts to deal with, Hollywood directors and then the actors. The studios are not worried about the directors or actors.

Why?

The writers have gone on strike many times over the decades. They went on strike, as we discussed, 15 years ago. Before that, they did it in 1988.. Directors and actors, they just have not gone on strike nearly as many times. Last time the actors went on strike was over four decades ago.

Oh, wow. Okay, so just typically there's a big difference between these groups.

Completely. So the studios negotiate with the directors, get a deal done really quickly. The directors call the deal historic. So one down, one to go. And then, sure enough, by mid-July, the actors do go on strike.

Okay, so the actors go on strike. But what does that have to do with the writers?

So by the time the actors go on strike, the writers have been on strike for two and a half months. It's mid-July. It's getting hot outside. It's hot in L.A. It's hot in New York.

Right. Now Hollywood is at a total standstill, right? No one can work, including, by the way, John, my own brother, who works in the film industry. He takes photographs on film sets. Hasn't worked since the actors went on strike.

So the studio executives, this is no longer one irritating union out there. Everything is completely stopped. So you have to deal with somebody. And so the studios said, OK, you know what? Writers, we haven't talked to them in months.

And what happens?

So effectively, very little happens. There were negotiations, but it was just very on, again, off again throughout the month of August. You know, there was something about the month of August. Everybody's on vacation. You know, it's like, OK, of course, there are a couple strikes happening.

Wow. So, like, if this studio is struggling, then every studio is struggling.

Precisely. But it's not just the studios. The writers, they've been out of work now for four or five months. It's a long time not to get a paycheck. And by the time we're at September, we notice that some of the biggest name writers in Hollywood, Kenya Barris, he created Black-ish on ABC.

So they're saying, guys, it's been a while. Hurry up. What's happening?

Exactly. And we're still reporting out what exactly happened there. But here's what we do know. The union and the studios then did agree to meet. And that meeting happened last week.

And do we know anything about what those meetings were like? Like, any details from inside the room?

So, here's what we do know. Studio executives, top executives, were suddenly sitting in the room. Disney chief executive, Bob Iger. Warner Brothers Discovery chief executive, David Zaslav. Netflix co-chief executive, Ted Sarandos.

And what's the significance of that, John? What did it mean that they were there?

It meant we mean business now. Because it's like, whoa, they're showing up. They want to get this deal done. It's close. It's close.

So, basically, the studios paid up.

Exactly.

So, is the way to think about this, John, that the writers kind of just waited the studios out? Like that, the studios couldn't deal with the math of the strike any longer? You know, it turns out. they also have finance departments and accountants who were saying, we got to get something on the table here.

Yeah. I mean, the studios were hurting. I mean, they need productions to be happening. Because they need new shows. They need new movies.

We'll be right back.

So, the writers made a lot of gains. They're going to get paid a lot more. But this also very likely is going to mean, on the other side, next year, the year after that, the year after that, fewer TV shows.

So, tell me about that. Why would necessarily that mean fewer shows?

So, let's use Netflix as an example. Netflix's content budget last year was around $17 billion.

My God, it's like a small country.

And this year, Netflix's budget is around $17 billion. Okay. Next year, it'll be around $17 billion. Okay. Do you see a trend?

I see a trend.

And if you're going to pay the writers more money, and you're eventually going to pay the actors more money, because they will get a deal at some point, the strike is going to end, well, something's got to give. Right. Then you don't have as much money to invest in the same number of TV shows or movies.

Okay. Same pie, but if each show costs more to make, you know, each slice, then there are going to be fewer slices of the pie to go around.

Exactly.

Okay. So, that's the downside for the writers, fewer shows to work on. Do they understand that? Like, is that something they've taken on board?

I don't quite know yet. I haven't talked to them yet. But here is what we do know. Going into this labor dispute, writers were calling this moment existential. They said they were fighting for their own survival.

So, what does this new contract mean for me, for Jane Consumer?

Would you believe you may have to pay more money? I know. It's shocking. So, basically, the economics of streaming, you know, it's been difficult for most media companies over the last decade. Peacock, Paramount+, Hulu, these are streaming services that lose a lot of money and still do.

So, kind of like Uber. I had the app on my phone forever. It was super cheap. I used it all the time. Suddenly, kablam, it became really expensive.

Exactly. And to make the balance sheets work, you keep raising prices. And now, even more so, in the wake of these strikes, the studios are probably going to have to, at some point, some point the next year, raise prices again.

So, you're saying that the studios may just pass the cost of this new contract on to us?

That's what some financial analysts are already saying. And the other thing is, these strikes have lasted for months. So, at least in the short and midterm, going into next year, there are going to be fewer TV shows. There are going to be fewer movies. You will find yourself on your couch at some point, clicking on all these streaming services, saying to yourself, where is something new to watch?

But, John, what if I don't want quite so many choices? I mean, maybe there's an element of silver lining in this. I mean, there were so many shows, right? Should there be that many shows?

Totally. I mean, this is something, if you put your serum in the arm of creative executives, they will say fewer shows, that is great. Because then we, as creative executives, have time to focus on quality. We have time to really get in there and help writers with their script. And to help with the cuts of a show.

Perhaps they can focus on the good ones.

That's right.

So, John, it strikes me that this is a moment where the streaming industry has just kind of lived through its heady, young, maybe teenage, days, right? And now we are living into an era in which it has to grow up. And in some ways, we, as consumers, also have to grow up along with it. Which, what I mean by that is, you know, we have to realize that these shows do cost a lot of money to make. And that we're going to have to come to terms with the fact that we're going to have fewer of them.

Yeah, I guess maybe we're in sort of our adolescent moment for these streaming services. And as a result, it's a little tricky. It's a little difficult. It's a little tough. And it's going to be tough for us.

So, John, thinking about this moment, we're in right now with streaming, and, at the same time, what's emerging from this new contract, it's almost like we're going back in a way to that old model of TV and film. You know, the pre-streaming version, where big entertainment companies made fewer shows. We paid more, but also the writers got paid more.

I mean, the studios would love to go back 20 years ago. The writers would love to go back 20 years ago. But that world is just gone now. Streaming has changed everything. This technological change has shifted everything.

So the contract, in a way, is pushing our, you know, adolescent, rambunctious streaming out of the house.

Streaming goes to college.

John, thank you.

Thank you for having me.

On Tuesday night, the Writers Guild of America made the details of its deal with the studios public for the first time. It included major concessions on how the writers are paid, including royalties for overseas viewing. It also guaranteed that the studios will not use artificial intelligence to rewrite original material. The union's 11,500 screenwriter members are expected to approve the three-year deal in a vote that begins on Monday.