Too Much TV: Your TV Talking Points For Monday, October 16th, 2023

A Warner Bros Discovery executive talks residuals. bonus payments.

Here's everything you need to know about the world of television for Monday, October 16th, 2023. 

A WARNER BROS DISCOVERY EXEC TALKS ABOUT RESIDUALS, BONUS PAYMENTS
Even before the WGA went out on strike, I was lucky enough to speak with some streaming executives on background about the issues facing the industry. And those discussions continued throughout the WGA strike, which led to some eye-opening comments from people such as an Apple TV+ executive, who had some very pointed thoughts about the WGA and their negotiating stance. As well as some thoughts about AI, which seem pretty much on track four months later:

Q: So what about AI? Is it as big of a danger as the WGA worries it might be?

A: Who the fuck knows? It's pretty easy to see a future where AI could maybe come up with the premise and then we'd hire writers to flesh out that IP. Although given the way AI aggregates data, I don't think most companies would risk that without having some ironclad legal protections so they're not being sued for computer-generate plagiarism. But sure, it's a valid worry for writers. And in a larger sense, the technology is even a bigger issue for actors. Imagine being able to crank out episodes of Wednesday for twenty years without anyone aging? Or having a computer capture someone's voice and use it for decades without any additional compensation? That's very real and it troubles me that we're in the Wild West part of this process. 

As an industry, we can't afford to burn through our future in order to save a bit of money now. But truthfully, thinking about the future doesn't mesh all that well with the need to drive revenue and cut costs. 

Interviews like that, or recent pieces about why the SAG-AFTRA/AMPTP negotiations fell apart are possible in part because, unlike most trade reporters, my background isn't in entertainment news. I spent a number of years working in hard news and covering the financial world. So I have connections with some current executives that date back to when they were someone's assistant. And I have developed relationships that might not be close, but they are a bit more willing to trust me without the complications of involving the corporate PR people.

Now I am not blind to the fact that often people are speaking to me in the hopes of spinning either me or my readers. So I am always extremely skeptical of anything I'm told, particularly when someone is not willing to publicly identify themselves. But given all of that, I still think it's important to hear their perspective and all of you can decide for yourselves how inclined you are to believe them.

A high-placed Warner Bros Discovery executive reached out to me this week and wanted to talk about the suspended-for-now SAG-AFTRA talks. The result was a wide-ranging conversation that will be posted in full over the next couple of days. But in the meantime, here is an exclusive first look at the interview, which includes a discussion of the new SAG-AFTRA proposal for a so-called "viewership bonus." I was also asked to highlight that while this senior executive has a deep knowledge of the issues and discussions that have taken place during negotiations with SAG-AFTRA, they are not a formal member of the negotiating team:

Q: Based on everything I've heard, at least some of the CEOs did not react positively to the latest "viewership bonus" proposal from SAG-AFTRA. That was apparently one of the primary reasons why Netflix's Ted Sarandos and Disney's Bob Iger left negotiations. So what is it about that idea that so enrages some members of AMPTP?

A: I can't speak to anyone's specific motivations. But from talking with other people in the company as well as other C-Suite'rs, there are a couple of issues. This proposal isn't simply meant to boost the rate of residuals being paid out now. This is an entirely new payment stream, built on top of what actors are already receiving. It's a huge change and it has serious revenue impacts down the road.

Look, the truth is that actors don't receive what they're probably worth when it comes to streaming. Especially when it comes to working-class actors. Say you were a recurring actor on a season of Suits and you're unhappy that you didn't receive much of anything from those episodes streaming on Netflix. The reason is that your residual comes from a pot paid by the studio licensing the show to Netflix. I think it's about 2 or 2 1/2 percent of the licensing fee. I have no idea what Netflix paid per episode, but let's estimate $250,000 an episode. 

Two percent of that is $5,000 for the episode. And that is for every covered actor. Paid out proportionally depending on each actor's original pay rate. That's not counting any fees that are subtracted or money that is clawed back in some way by the producers. So if you are that imaginary recurring actor, there's not much left for you. And the union negotiators are smart enough to realize you could triple that residual and it still wouldn't get their members to where they need to be.

So their answer was to create a new pot of money. First, it was two percent of revenue and now it's a bonus that would be paid on all programs drawn from a per-subscriber fee from each service. The problem from our perspective is that it's a bonus that would be paid out whether a show has 50 viewers or 50,000,000. Unlike the WGA deal, which rewards performance, this is just a backdoor way to boost payments to actors.

Which is fine. I think most of us agree actors deserve more money. That it needs to be fairer. But even if you accept the SAG-AFTRA figures that estimate it would add fifty-something cents per month per subscriber, that's a lot of money. Then you start adding other unions and guilds down the road and it is not survivable.

What makes the idea even more egregious is that they want it to apply across the service. And it's one thing that pay fifty-something cents per subscriber in North America. It's quite another to have to put that out in a country where the average revenue per user is less than a dollar. And that's not adding in whatever other obligations come from deals negotiated in other countries.

I want actors to succeed. I don't agree with everything the studios believe. But this is too much. And if we agreed to it, the stock prices would crater due to concerns about future financial viability. There is a way forward. But this isn't it. 

More tomorrow, including thoughts about AI and what it might take to get negotiations back on track.

And if you have any feedback, reply directly to this newsletter or email me at rick@allyourscreens.com

ODDS AND SODS
* Lara Parker, who as the vengeful witch Angelique Bouchard spent centuries entangled in a love-hate relationship with Jonathan Frid’s Barnabas Collins on the gothic ABC soap opera Dark Shadows, has died at age 84.

* Sony Entertainment owns an impressive collection of catalog TV titles. And the company is now posting more full episodes of its holdings on its themed YouTube channels.

* The Epoch Times is one of the country’s most successful and influential conservative news organizations. It’s powered by Falun Gong, a religious group persecuted in China, which launched The Epoch Times as a free propaganda newsletter more than two decades ago to oppose the Chinese Communist Party. 

WHAT'S NEW TODAY AND TOMORROW:

MONDAY, OCTOBER 16TH:
* Contraband: Seized At The Border (Discovery)
* F-Boy Island Season Three Premiere (The CW)
* Oggy Oggy (Netflix)
* Studio C Season Seventeen Premiere (BYUtv)
* The American Buffalo (PBS)
* The Daily Show Returns From Hiatus (Comedy Central)
* The Thief, His Wife And The Canoe: The Real Story (Britbox)

TUESDAY, OCTOBER 17TH:
* Binged To Death (MTV)
* Celebrity Squares Series Premiere (VH1)
* Crush (Paramount+)
* Dark Side Of Comedy (Vice)
* Fatal Injections Series Premiere (MHz Choice)
* Heather McMahan: Son I Never Had (Netflix)
* I Woke Up A Vampire Series Premiere (Netflix) 
* Navajo Police: Class 57 (Max) 
* Street Outlaws vs The World: After Hours (Discovery)
* The Devil On Trial (Netflix)
* The Oval Season Premiere (BET)
* The Sea Beyond Series Premiere (MHz Choice)
* This Farming Life (Britbox)


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

SEE YOU TUESDAY!

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