The issue of residuals is a major focal point for the Writers Guild of America’s negotiations with the Alliance of Motion Picture and Television Producers as the two sides held their latest round of talks on a new contract Friday.
However, it’s clearly a complicated topic — made even more complex when one looks under the hood of the WGA’s own financials.
Last week, the WGA’s Negotiating Committee, in its latest appeal to members to approve a strike authorization, said, “Over the past decade, while our employers have increased their profits by tens of billions, they have embraced business practices that have slashed our compensation and residuals and undermined our working conditions.”
But the WGA West’s latest annual report, released in June, notes that for the fiscal year ended March 31, 2022, total residuals collected by the guild in 2021 hit an “all-time high.” The guild’s annual reports also show that total residuals increased by 48.2% from 2011 to 2021 – from $333 million to $493.6 million.
Charles Slocum, assistant executive director at the WGA West, told Deadline this week that “total residuals are higher because many more projects are being made, and a lot more are in reuse.” The “slashing” of residuals, he said, “is on a per-program basis.”
And the culprit is streaming, where half of all series writers now work.
“In streaming, the companies have not agreed to pay residuals at the same level as broadcast, or the same reward-for-success as they have traditionally paid in broadcast,” he said. “If you write for a streamer, you get two residuals payments – one for domestic streaming and one for foreign streaming. It’s a set amount of money. If it’s a big hit, you do not get paid more residuals in streaming, whereas in the broadcast model, you do because of its success. That’s the sense that residuals were slashed – they have not agreed to a success factor when a program is made for streaming.”
That’s one of the things the guild is seeking in its ongoing negotiations with the AMPTP – a residuals “premium,” as Slocum put it, for successful steaming shows, and a premium for streaming showrunners that reflects their years of experience.
“We’re seeking to raise scale. We’re trying to get more senior writers higher rates,” he said, noting that more showrunners are working at the guild’s minimums than ever before. “You can’t have a showrunner working for the same rate as a story editor. If they are going to pay more experienced writers at minimum, then there has to be a higher minimum for those writers.”
Slocum added: “With more writers working at scale, there needs to be scale for experience. You could look at it as having to account for what was over-scale compensation in the guild’s scale rates, since so many writers are now working at scale.”
The guild has said that “with the rising dominance of streaming – where half of series writers now work – short orders, the separation of writing and production, and the lack of a season calendar have depressed writer pay. At every job title, more writers work at MBA minimum now than a decade ago. In the 2013-14 season, 33% of all TV series writers were paid minimum; now half are working at minimum. Increasing numbers of seasoned writers, including showrunners, are now paid no over-scale premium for their years of experience. Median weekly writer-producer pay has declined 4% over the last decade. Adjusting for inflation, the decline is 23%.”
According to the guild’s latest annual report, “New media, the largest residual category overall, accounted for almost half of the total residuals collected at 45.2%. This is an increase over last year where new media accounted for 36.7% of the total residuals collected.”
The guild’s annual reports also show that total television residuals increased by 59.25% from 2011 to 2021 – from $203.09 million to $323.43 million – while total theatrical film residuals increased by 31% over that same time span, from $129.9 million in 2011 to $170.2 million in 2021.
And while there has certainly been a downward trend in some moribund residuals markets – such as home video, domestic syndication and primetime network – those losses were more than made up for by whopping gains in others. New media reuse of theatrical films, which is now the largest residuals market for movies, increased by 432.7% from 2016 to 2021.
And on the television side, residuals from the reuse in new media of traditional media shows increased by 162.4% from 2016 to 2021, making it by far the largest TV residuals market, accounting for $108.8 million in 2021. And new media reuse of high-budget streaming shows increased a staggering 5855.6% over that same period, accounting for $26.8 million in 2021 and making it the third-largest TV residuals market.
The studios, however, see the guild’s narrative entirely differently. A producer source told Deadline that streaming platforms such as Netflix, Hulu and Disney+ have been “a boon to writers, who are making residuals on series that would otherwise have not continued to earn them income, and they are benefiting from greater opportunity for writing assignments with more producers greenlighting more projects than ever before.”
Noting that English scripted TV volume in streaming increased by more than 35% from the prior broadcast year, the source said that since September 2017, volume of English TV released by streamers has increased by more than 250%.”
“In the not-so-distant past,” the source said, “a series would need to reach five seasons – or the magic 100-episode threshold – to be syndicated off-network, and the residuals earned by writers would not be paid until Year 5. With the emergence of [subscription video-on-demand] platforms, series get a second window after their first season and residuals paid.
“A serialized series would also have limited off-network opportunities and, in most cases, no opportunity at all. With the emergence of SVOD platforms, serialized series thrive and earn residuals that were before nonexistent.
“Canceled, or so-called ‘busted’ series, would fade from existence and that would close the books for writers. With the emergence of SVOD platforms, these series that ran only one, two or three seasons have the opportunity to run on an SVOD series and earn these writers residuals.
“SVOD has also brought an enormous amount of opportunity for work that simply would not be there were it not for these platforms and their huge investments in the original production. The made-for-SVOD product does, in fact, earn significant residuals for WGA members.”
The WGA’s Negotiating Committee, meanwhile, also says that that writers’ compensation has been “slashed” during the past decade, but that depends on which set of data it’s referring to – scale or over-scale. Scale payments – which the guild bargains for – have not been slashed over the past decade, according to the WGA West’s annual reports. But the number of writers receiving over-scale pay has been on the decline, though over-scale pay is not subject to collective bargaining but, rather, is negotiated by writers’ agents or lawyers.
According to the guild’s latest annual report, overall reportable (scale) compensation and employment both were down in 2021. “More than 5,900 writers reported employment in all work areas in 2021, a 6.1% decline from 2020,” the report found. “Total writer earnings reported for dues purposes declined 7.7% to $1.55 billion.” And for “dues purposes” the guild is referring to reportable income, which does not include over-scale pay.
The annual report acknowledges, however, that the 1pandemic played a significant role in those recent declines. “The impact of the Covid-19 pandemic continued into 2021,” the report notes, “with writers’ reported earnings and employment reflecting disruption to the entertainment industry. In all fields, writers reported declines in both employment and earnings.”
Even so, the guild’s annual reports found that WGA West members’ total earnings as reported for dues purposes increased by over 53% from 2011 to 2021, rising from $1.008 billion in 2011 to $1.547 billion in 2021 – a year-to-year increase of $539 million.
WGA West members’ reported television and digital platform earnings, meanwhile, hit $1.128 billion in 2021, which was up over 81% from $620.7 million in television earnings in 2011 – a year-to-year increase of $506.9 million.
WGA West members’ reported film earnings, however, have remained relatively flat, rising from $375.1 million in 2011, to $408.8 million in 2021 – a 9% increase that falls far below the rate of inflation. And during the pandemic, their screen earnings fell by 6.6% in 2020 compared with 2019, and by 13.3% in 2021 compared with 2020.
And yet, despite this overall upward trend in total covered earnings over the past decade, data collected by the guild shows that over-scale payments to writers are on the decline. Slocum said that with so many writers now working at scale, there needs to be a pay “premium” for experienced writers, as well.
Negotiations between the WGA and the AMPTP are expected to kick into high gear after the guild’s members finish voting Monday to approve a strike authorization. The guild’s current contract expires May 1.