Hollywood Blues in the Age of Streaming

Alex: So tell me more about how movies used to be distributed prior to streaming. How were these movies funded, and how do they come out, and how did the labor work?

Peter: So if you released a film, you would have your big box office number to start off that weekend, and then all the deals underneath it. So for your cable television, your HBO or Showtime, your American Movie Channel or TNT, you would negotiate a deal, then eventually ABC, CBS, and then foreign sales, toys, whatever—all of this was built on what’s called a downstreaming effect. So if you do well at the theatrical box office, everything kind of pours onto the other, and all the talent would get a certain portion of that. So if you are a top actor, say a Tom Cruise or a Nicole Kidman, you could negotiate something like 20 percent of all profits if you were very strong and powerful, but even IATSE gets a certain portion of that money—at each level of the sale, they get a certain percentage. And this is what’s really changed at streaming because a) you don’t have that downstreaming effect, it just shows up on Netflix and exists there theoretically in perpetuity, and b) there’s not necessarily any sharing of the pot at the same time.

Alex: So that’s key, right? Because a movie before, if you make a movie, and say it’s a modest midsize movie, not even talking about a huge blockbuster, you have the box office, and a portion of that is negotiated to go to labor, and then you have the sales for it to be aired on TNT a few years later, like every weekend, and then a portion of that counts as the revenue that gets to the labor. And then you have the DVD sales or the VHS sales. And now it’s just like you make a thing. It goes on Netflix. No one tells you how many people watched it. It seems a lot harder to negotiate your cut of that.

Peter: Unless Netflix tells you how many people watched it. Netflix actually just made a change—before they were telling you how many people watched the first two minutes of a show, which, you know, sometimes the trailer starts playing automatically. You left the room, you went to the bathroom, and suddenly you’re counted as a view. And I think it really hurts talent. Since the 1950s, you negotiated your film based on how well your last film did. If you have a big hit, you get a better contract. If you don’t know how well your film did on Amazon Prime, how do you negotiate your next contract? How do you know how much you’re worth? 

Laura: So stars are not being compensated the way they used to. Also the below-the-line employees are not getting paid the way they would be traditionally. So that’s the compensation side of it, but I want to switch over to talking about the working conditions on set, and how streaming has affected that day-to-day experience and the kind of days that you are expected to work and the conventions, like the meetings that you might have. What kinds of complaints do people and production staff have, particularly?

Peter: With all types of production, going all the way back to the 1910s and 1920s, the more days you have to spend on set, the more you have to pay. Any show, any film is budgeted essentially at a per-day average. Any time you can eliminate days, the better you’re going to pay out. And one of the big issues in the IATSE contract is lunch fees, being able to just take time off from your 14-hour day for lunch. Maybe a producer says, “We’re skipping lunch today”—there’s a fee that a producer has to pay. But sometimes these producers would say that the fee is worth it, because if we have to add another day onto production, that’s a lot more money, so we start to make those decisions. The fact is that you’re running a 14-hour day for which you’re willing to pay the overtime, theoretically, as opposed to letting people go home and sleep. And so I think what’s really happening with streaming is that there’s more production, but they’re always being squeezed because we don’t have those traditional ways of financing these things and profiting off them, so everyone’s looking for ways to cut corners. The IATSE agreements, at least in the past, have said, “This film is only budgeted at this rate.” So we’re actually not only going to work you harder, we’re going to pay you less, at the same time, than you would [get] if you were doing the theatrical film version of this. 

Alex: Tell me if I’m off base here, because I’ve been trying to figure out how or whether these conditions affect the product, but I’m thinking about your description of how the studio system worked and then the period of film and television where if you made a movie, everyone involved wanted or needed that movie to be a hit or at least to make its money back. So each movie was an individual product that needed to earn itself back. With a TV show, your end goal was syndication—you wanted it to be successful enough that you could go for 100 episodes so that it could be sold to be in reruns, which is syndication, for years, and everyone would continue to make money on it. Meanwhile, streamers like Netflix are notorious for just canceling shows after a few seasons, saying, “We’ll get no more value out of this. We have no reason to continue doing it.” If what you are trying to build is a library, and you don’t care about the individual picture being a blockbuster, does that lead to shoddier work and shoddier working conditions?

Peter: I think you’re actually onto something, Alex. If you go back to 1990s television and what used to be called pilot season—we’ve all heard about famous pilots being made for different shows that sounded really exciting, and then they don’t get picked up, and you never see them. That was the way that television worked, right? The television networks would analyze a bunch of pilots, one episode, and then choose select ones to go and actually shoot a full season of it. And then they started shooting full seasons. I think for a lot of workers, once you get into a full season of a show and really once you get onto the second season of the show, you have a good sense of your career trajectory—that work is going to be there the next year and the next.

Alex: You have job security.

Peter: If you’ve been working on The Big Bang Theory, you know that The Big Bang Theory is not going away anytime soon, and it is a form of job security, you’re right. But Netflix will go two seasons, right? So you build your entire career around this show and then it just suddenly drops out from under you. And you have no idea that it was going to drop out because you don’t even know how well it was doing. I think a lot of this is that Netflix is willing to take these theoretical risks or these risks that it thinks it is creating—they’ll play it out for a season, they’ll get the buzz without necessarily then having to deliver the goods all the way down the line. The other thing I want to say about this is that if you’re a writer in Hollywood, you would maybe work for five, six years, you get your first film or television show, and then you slowly start digging from your archive of scripts you’ve been working on. And now, you’re being asked for your fourth- or fifth-worst thing. And that’s just automatically getting produced because it’s something that exists, and it’s ready to go, and we can start shooting it in two months. 

Laura: Well, this keys into the question that we started the show with: Has streaming made it harder to find good things to watch, whether that’s TV or movies? Because you have this kind of half-baked, original content, and then the other thing you have is endless franchises. And there isn’t this kind of peak TV that we were promised in the middle. How has the rise of streaming affected what’s being made?

Peter: The reason that a company like Netflix or Amazon is always targeting this intellectual property, the kind of thing about which we’re…

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