Too Much TV: Your TV Talking Points For Thursday, July 13th, 2023

The Netflix proposal that might have changed the strike.

Here's everything you need to know about the world of television for Thursday, July 13th, 2023.

PROGRAMMING NOTES
Today's newsletter is going out a lot later than normal for a couple of reasons. First, I took some off this evening to see a soccer game with my son. But I've also been trying to nail down more about the first story below. I have enough to at least report out the highlights. But I still have so many questions I'm trying to get answered.

As a side note, I regularly receive questions about my sources. How did I convince this person to talk to me - even on background? How was I able to uncover this story buried deep with the bowels of a streamer?

Since I've added a lot of new subscribers in the past few weeks, I'll lay out the short version of my resume. I have been in journalism a long time, although much of the time was spent writing about things other than television. But over the decades - yes that long - I've developed a lot of sources. I interviewed people at Netflix when it was still a DVD-only service with one warehouse in SF. I have sources dating back from the time of the great Warner Brothers/AOL merger. I've broken some big stories over the years. But because I don't work for a major outlet and live outside the traditional media centers, I tend to be off the radar of a lot of people. 

The upside is that lack of perceived industry clout makes my job as a reporter much easier. People often talk to me because they underestimate my knowledge or believe they can easily fool me. And most of all, I am relentless about trying to talk to people about their jobs and skillsets. I'm picking their brains and slowing building up this mental map of how things work in the industry and why.

Honestly, you would be surprised what people will tell me. Which brings me to the following story....

THE NETFLIX PROPOSAL THAT MIGHT HAVE CHANGED THE STRIKE 
Netflix is notoriously difficult to navigate as a journalist. Most people who work there either actively distrust the press or have been taught by the Netflix culture to not speak to the press. But I have some good sources there and while many times I learn things I can't use publicly, there have been times when someone has been willing to at least speak to me on the record without attribution.

Several days ago, someone forwarded me some internal emails from Netflix. I'll be circumspect about some of the details, in order to keep anyone there from tracking down my source. 

One of Netflix's long-cherished components of its corporate culture is the idea that team member should take "informed risks." And while that idea has scaled back a bit in recent years, it's not unheard of for someone to step out of their lane a bit and put forward an idea that potentially pushes the boundaries at the streamer.

These emails were a chain of message that began with a very thoughtful proposal from a relatively mid-level executive and it posited one question. The writer's strike is ongoing and an actor's strike might be on the horizon. So what would be the best way to settle this issue? And by "best way," the proposal would be built on maximizing the amount of impact Netflix could have on the negotiations while simultaneously inflicting financial pain on their streaming rivals. And it is a fascinating read.

The proposal included in the initial email suggests Netflix should cut a separate deal from the other studios and negotiate terms with the unions that would minimize the changes the streamer would need to make.

* Netflix would propose to shift the production cycle for most shows in a way that would make it easier to keep writers tied to production. In part, that would involve ordering some shows based on a pilot script and outlines, allowing the writers to break the episodes during the production process. The minimum guaranteed size of the room would remain small (4 instead of the six proposed by the WGA), but those production changes, along with tweaks on span and other related items might provide enough for writers to accept without substantially impacting the bottom line.

* There wouldn't be much of a change in transparency on viewing numbers and other internal metrics used in determining content value. But there would be a formula that would provide performance-based bonuses for projects that reached certain goalposts, including Netflix Top Ten Lists, Nielsen rankings and some other third-party data. It's not residuals, but it would at least provide some financial incentives for performance that would be a solid interim step. And it's notably a similar approach to the one reportedly proposed by SAG-AFTRA, which would pay performance-based residuals out of an agreed-upon pool of funds.

* Changes to AVOD payments and residuals that would not only provide a pay increase for union members, but make it less lucrative for streamers to move low-performing projects to AVOD. The proposal notes that while it would be a substantial cost to Netflix, then changes would fall hardest on Prime Video and Warner Bros. Discovery, both of whom have been aggressively moving original productions from SVOD to AVOD. That factor was seen as a net plus.

* A penalty "payment" that would go to union members if a project was completed, but permanently shelved for whatever reason. This was another proposal that seemed to be most directly targeting Warner Bros. Discovery, although this would have some impact on nearly every streamer at some point.

There are some other ideas, but many of them are somewhat incremental shifts in payments. More than AMPTP would likely would prefer, but less the the final WGA proposals. The subject of AI wasn't addressed at all. I suspect because of the complexity of the issue in the framework of this idea.

The email went out to a handful of Netflix employees and most of them appear to be in the same work group. Although one of the recipients was a person the author reported to. There were a number of responses and the initial feedback seemed to center around a couple of points. a) There were a lot of solid, actionable ideas that would likely be accepted by the unions, and b) The proposal would essentially be declaring war on the other major streamers and the consensus was that wasn't a move Netflix's top executives would likely to approve. "(name redacted) hates our competitors but (name redacted) doesn't HATE hate them," was part on one response.

It's not clear if this is an idea that Netflix could have moved on even if it wanted to. None of the participants in the email chain were anywhere near the level where they understood the rules of engagement with AMPTP. But none of the responses believed company executives were willing to burn so many bridges with other major media companies. Especially at a time when Netflix is aggressively trying to license selected content from those same companies. 

But the conversation did note that Netflix and the other streamers have a lot more flexibility to negotiate than the companies that are attempting to juggle streamers as well as legacy broadcast assets. 

I spent a lot of time trying to confirm the authenticity of the emails and contacted everyone in the email chain. Several people admitted to having received the emails, but one person who seemed to have added several long entries in the email thread told me they "didn't recall" whether they had read it or responded to it in any way. Which seems...unlikely. I read a selection of emails to another recipient, who told me they appeared to match the ones they had received. 

The author's superior doesn't appear to have responded, although I very likely didn't receive all of the responses that weren't part of the "reply all" chain. But enough people confirmed the legitimacy of the emails that I feel pretty confident they're real and unaltered. 

As to the question of whether the idea was passed along up the chain at Netflix, my guess would be no. There was a lot of agreement that the proposals had value and with some further tweaking possibly allowed Netflix to settle with the unions early and net a massive advantage with its rivals. But there also seems to have been a quick consensus that this "informed risk" would be too risky for Netflix upper-level executives to seriously consider.

So in the end, this falls into the category of "what might have been."

AN EXAMPLE OF WHY AI MATTERS
The issue of AI has become one of the central issues of both the writers and actors strike, it's a problem that might feel a bit difficult to wrangle with mentally. How big of an issue is computer-created content going to be in the near future?

Ted Gioia's newsletter

The Honest Broker

tackled AI-created music today and he lays out a series of issues that likely have a lot of overlap with the ones facing the television industry:

And, it’s true, I have a tendency to laugh at the boastful claims being made for improving the arts with AI technology. There’s something ridiculous about this music—or, to put it more clearly, there’s something ridiculous about the mismatch between the music itself and the claims made for it.

But I really need to emphasize that this is no laughing matter. The larger picture here is ominous:

1. For the first time in history, the most powerful and wealthy companies are all tech global players with consumer-facing platforms.

2. Every one of them is now obsessed with AI as a profit-generating opportunity.

3. The various AI projects they’re pursuing are all different, but they have one thing in common: They involve flooding the culture with torrents of AI garbage—the metrics are all quantitative, not qualitative (because, hey, that’s how they roll).

4. Quality checks are actually viewed as hindrances. In the mad gold rush mentality of the AI revolution, quality slows things down—so even the most basic safeguards are ditched or ignored.

5. But genuine creativity operates in the qualitative realm. In that sphere, numbers are meaningless. Mozart’s Requiem or the The White Album or other works of that sort can’t be replaced with 100 million AI tracks—numbers don’t work like that.

6. The more garbage you dump into our polluted culture, the more obvious this becomes.

And yet, despite all of the challenges presented by these budding AI overlords, Gioia is optimistic about the future:

That’s because the technocrats are overplaying their hand. The real end result of all these AI sausage factory projects is likely to be the exact opposite of what they intend. They’re simply reminding us of how much we love the music of actual human beings—who laugh and cry and love and hurt just like the rest of us.

I hope that he is right in this assessment. I am not as convinced of this scenario when it comes to TV and the movies.

ODDS AND SODS
* The CW Network has secured exclusive broadcast rights to 50 ACC college football and basketball games each season through 2026-27. The network acquired the rights to these live games from Raycom Sports who sublicenses the rights from ESPN.

* A transcript of highlights from the Bob Iger interview with CNBC's David Faber on Thursday morning.

* A review of the Viaplay documentary Philosopher Of The Sea.

* Season eight of Botched! premieres Thursday, August 3rd on E!

THE IMPACT OF THE SAG-AFTRA STRIKE ON ENTERTAINMENT JOURNALISM
SAG-AFTRA sent out guidelines today that reminded everyone what actors are not allowed to do during the strike. Here is just a partial list:

○ Tours
○ Personal appearances
○ Interviews
○ Conventions
○ Fan expos
○ Festivals
○ For your consideration events
○ Panels
○ Premieres/screenings
○ Award shows
○ Junkets
○ Podcast appearances
○ Social media
○ Studio showcases

Principal on camera work, such as:
○ Acting
○ Singing
○ Dancing
○ Performing stunts
○ Piloting on-camera aircraft
○ Puppeteering
○ Performance capture or motion capture work

Principal off camera work, such as:
○ ADR/Looping
○ TV Trailers (promos) and Theatrical Trailers
○ Voice Acting
○ Singing
○ Narration, including audio descriptive services except as the services may be covered by another collective bargaining agreement referred in the Notice to Members Regarding Non-Struck Work
○ Stunt coordinating and related services

This is going to impact a lot of businesses that depend on these promotional appearances. Within a couple of weeks, Entertainment Tonight is going to be nothing more than looks back at old premieres and the random puppets acting out banned red carpet events. 

All joking aside, if the SAG-AFTRA strike goes on for very long, it is going to have a horrific impact on the Hollywood mostly Penske-owned trades, whose primary revenue comes from content driven traffic, studio advertising and pricey events that depend on the participation of actors.

It's also going to be tough on smaller outlets like mine, which don't have the deep pockets to ride out a prolonged content drought. It's going to be a tough few months (most likely) for lots of us in the industry. Help out each other when you can.

WHAT'S NEW FOR FRIDAY:
* Bird Box Barcelona (Netflix)
* Five Star Chef Series Premiere (Netflix)
* Foundation Season Two Premiere (Apple TV+)
* Imagine Dragons: Live In Vegas (Hulu)
* Link Click (Crunchyroll)
* Love Tactics 2 (Netflix)
* Mama June: Family Crisis Season Finale (WE tv)
* Quicksand (Shudder)
* Run The World Season Finale (Starz)
* The Beauty Queen Of Jerusalem (Netflix)
* The Summer I Turned Pretty Season Two Premiere (Prime Video)
* Timezone (Max)
* Too Hot To Handle (Netflix)
* Yuzuru Hanyu Ice Story 2023 "Gift" At Tokyo Dome (Disney+)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU FRIDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.