Streaming Is Changing How Hollywood Works

Previously negotiated work rules made entertainment produced for streaming less expensive by depressing film-makers' compensation. Apple and Amazon were especially aggressive about underpaying. 

The talent - both in front of and behind the cameras -  refused to put up with that. JL 

Janko Roettgers reports in Protocol:

A agreement between the International Alliance of Theatrical Stage Employees and the Alliance of Motion Picture and Television Producers helped avert a strike that would have shut down Hollywood. This labor dispute was all about streaming. More shows for more services means longer hours and fewer breaks for studio workers. Apple and Amazon have been using streaming as loss leaders to boost other parts of their business. Anyone who buys a new iPhone gets three months of free access to the service. Thanks in part to those extended free trials, the number of paying Apple TV+ subscribers is still low. Those numbers allowed Apple to pay crew members a lower rate

A last-minute agreement between the International Alliance of Theatrical Stage Employees (IATSE) and the Alliance of Motion Picture and Television Producers (AMPTP) helped avert a strike that would have shut down Hollywood: The two sides agreed on a new contract that includes pay raises as well as improved break schedules, Deadline reported Saturday evening.

The union had threatened that 60,000 of its members would go on strike today after weeks of contract negotiations. Streaming rates and residuals were just a small part of the union's catalog of demands. But ultimately, this labor dispute was all about streaming.

The last time IATSE members ratified a new contract was in 2018; a lot has happened since.

• Disney+ and Apple TV+ launched at the end of 2019, and HBO bundled its streaming efforts under the HBO Max brand in May 2020. Other notable streaming launches included Paramount+ and Peacock, while Hulu began adding streaming-only shows from FX to its catalog.
• Netflix grew its global subscriber base from 130 million in Q3 2018 to an estimated 212 million in Q3 2021.
• Viacom acquired Pluto TV, Fox purchased Tubi, and Roku bought Quibi's assets. All of them are now looking to bring originals to their ad-supported services.
• Movies like Disney's "Soul" and "Luca" as well as WarnerMedia's "Suicide Squad" and "Dune" all debuted or are set to debut on streaming services first.
• At the 2021 Emmys, streaming services stole the show, with Apple's "Ted Lasso" nabbing seven awards, and Netflix taking home a whopping 44 Emmys — more than any other TV network or service.

In 2021, Hollywood has become synonymous with streaming, and some of the most popular shows and movies are being made by some of the world's richest and most powerful tech companies. IATSE workers point out that there is a large disparity between their working conditions and the balance sheets of the tech companies making bold moves in Hollywood.

• "I did a show this year that was $12 million an episode for a company where the CEO just went to space," camera technician Carman Spoto can be heard saying in a video of the labor-aligned More Perfect Union while images of Jeff Bezos flashed across the screen. "We were working 16-hour days, and we were scheduled not to have any lunches for a six-month show. That's the reality."
• The streaming boom has also led to a massive ramp-up of production activity across Hollywood: When "House of Cards" debuted as the first real streaming success story on Netflix in 2013, U.S. networks and streamers had a total of 349 scripted shows. By 2019, that number had grown to 532.
• More shows for more services means longer hours and fewer breaks for studio workers. "We've had multiple people get in car accidents and some died in car crashes on the way home from being overworked and not getting enough sleep because the turnaround times are so quick," Spoto said in the same video. "That's more dangerous than when we're doing explosions on set [...] or doing helicopter stunts."

Shifting economic incentives behind streaming make matters worse: Companies like Apple and Amazon have been using streaming as loss leaders to boost other parts of their business, or investing billions of dollars with the expectation to grow audiences first and worry about returns later.

• Up until July, Apple gave people a free year of Apple TV+ for buying one of its devices. Anyone who buys a new iPhone this fall still gets three months of free access to the service.
• This has helped Apple promote its devices business while also growing the audience of Apple TV+. During the first weekend in August, "Ted Lasso" became the most popular show across the major U.S. streaming services, according to data from streaming aggregator Reelgood.
• However, thanks in part to those extended free trials, the number of paying Apple TV+ subscribers is still comparably low: The company reportedly told IATSE in July that Apple TV+ had less than 20 million paying customers.
• Those numbers allowed Apple to pay crew members a lower rate than bigger streaming competitors under new media rules carved out in earlier contract negotiations that were meant to help smaller services compete against industry giants. (Apple has told the media that its crew rates are "in line" with what other services pay.)

Part of IATSE's list of demands was to get rid of these new media exemptions. But at the core, all of the other demands — meal and rest breaks, better pay and increased contributions to the union's pension funds — were also about streaming, because these days, everything in Hollywood is about streaming. And as the big media and tech companies are duking it out in the streaming wars, their foot soldiers were willing to battle a first big fight of their own.