Too Much TV: Your TV Talking Points For Thursday, October 12th, 2023

A behind-the-scenes look at why the SAG-AFTRA/AMPTP negotiations fell apart.

Here's everything you need to know about the world of television for Thursday, October 12th, 2023. 

WHY THE SAG-AFTRA TALKS WITH AMPTP FELL APART
My original plan last night was to get to bed at a normal time after working several late nights. I had just crawled into bed and dozed off when my phone started buzzing with notifications from Signal and What's App. "The SAG-AFTRA talks are suspended," said one message. "I knew it, those f**** walked out," said another. So I got back up and by the time I got to my laptop, several people had just sent me the note released by AMPTP recounting their version of what led to the suspension of talks between the major Hollywood studios and actors represented by SAG-AFTRA.

Trying to figure out precisely what happened yesterday turns out to be a bit of a Rashomon experience. After talking to numerous people with various levels of access and knowledge of the talks, the one thing I can say for sure is that I didn't get the same recounting of negotiations from any two people I spoke with. The disparities were especially significant on the studio side, which makes sense given what I heard overall from participants.

From the studio perspective, there had been a lot of consternation and growing anger about the SAG-AFTRA proposal for what is generally described as a "viewership bonus." The original SAG-AFTRA proposal would have imposed a two percent cut of revenue attributable to a title, which would be divided among the program's participants in some sort of tiered cut based on...well, how important you are to the project. That two percent is above and beyond what would be paid out in traditional residuals or other payments. 

From the beginning of the process, one of the challenges of this idea was determining a revenue number for a specific title. SAG-AFTRA had proposed using data collected by Parrot Analytics or another third-party analytics firm. I wrote about Parrot's efforts back in April when I used their data to illustrate why the Pokemon franchise has proved to be so valuable to Netflix:

To find an answer to the question, I reached out to data analytics firm Parrot Analytics, which among other things collects what it describes as "global audience demand" data. Basically, they collect a wide range of data points from across the industry. Everything from official viewing numbers and social media interest to data culled from viewer interactions on search engines, IMDb, even pirate sites that offer the option of illegally downloading titles. They are then able to estimate a "demand" number, which allows customers to not only see how much interest there is in a specific title, but also compare it to other competing titles. 

Even SAG-AFTRA representatives I've spoken with throughout the strike admitted it wasn't an ideal solution. However given that they believed the revenue share was necessary and that the studios wouldn't provide show-specific revenue data, this was seen as the best option available.

The studio's perspective has been consistent from the outset: they are open to revisiting residual payments and increasing them to reflect inflation and other factors. But the "percentage of revenue" proposal had been described to me by multiple studio sources as "unacceptable," for both financial and more practical reasons. The idea of taking a percentage off the top was seen as not just an unfair burden, but one that doesn't reflect the way payments are made in any other context. "They're not talking about a percentage of profits," one executive explained to me. "They're proposing to take several percent out of revenues before anyone else gets paid. Including us. It's not fair to the studios and to be honest, it's not fair to writers, directors, and other creative participants."

Perhaps the bigger problem with the idea from the AMPTP perspective is that they saw the content valuation part of the proposal as unworkable. They distrust third-party data and when you factor in the challenges of combining some demand-side valuation with revenue attributable to advertising, it's an extremely complicated data challenge. Then spread that challenge over thousands of trackable titles and you have a proposal that not one studio-side source I spoke with believed was practical.

According to sources, SAG-AFTRA's latest counter (which was presented on Monday), discarded the revenue share in favor of a "viewership bonus," which would divvied up proportionally to all covered participants. AMPTP hasn't responded to that proposal officially and I haven't seen the specific details of the proposal. However several studio sources I spoke with described the proposal as being "overly broad" and argued it "rewarded cast on shows that didn't perform well in the marketplace." From what I can tell, the viewership bonus would be paid on all programs drawn from a per-subscriber fee from each service, which the studios see as unfair. They point to the WGA "performance bonus," which offers up an additional payment to writers on any show that nets 20 percent of a streamer's total subscriber base over 90 days."

"It's a fair criticism of the cost-plus based budgeting system to argue that it doesn't reward excellence," said one top streamer executive familiar with the compensation issues. "But this proposal goes too far the other way, and rewards people whether or not their show is successful."

But it hasn't just been the so-called "viewership bonus" that has been a sticking point during the negotiations. Despite a great deal of effort on both sides, there remain significant differences in how AI can be used as well as when and how permission can be required. The studios have agreed to obtain advance consent from the performers and background actors to create and use Digital Replicas. But they have so far declined to codify when the consent would be obtained. And since the studios are proposing the consent be obtained on the first day of production, SAG-AFTRA representatives have worried studios would use consent as a requirement for being hired, which would pressure performers to agree to scans in exchange for a much-needed role.

But there have also been several conversations over when and how those "Digital Replicas" can be used without requiring new consent (and presumably payment). One key phrase is whether the new use would change the nature of an actor’s performance. It's a vaguely-defined phrasing and there are legitimate concerns that studios could expand that definition to allow any number of uses. Ranging from using the replicas as part of scenes that were never shot during the regular course of production to using a replica obtained when someone had a small role in a film to create new projects once they became better known to the audiences.

Based on numerous conversations, the formal suspension of negotiations came unexpectedly to both sides. SAG-AFTRA negotiators reportedly knew tensions were high on the studio side, but told me talks had been proceeding more or less as expected until Wednesday evening, when they were told negotiations were off until further notice. "There was no official counter-proposal, no 'oh, let's just wait until next week, cool off, and try again," one person close to the SAG-AFTRA negotiations told me Thursday me. "Honestly, we were a bit blind-sided."

The studio recounting of Wednesday's events is a bit more complicated. I was told that after looking at the latest SAG-AFTRA proposal, there had been an informal counter-proposal from the studios that would be structured similarly to the one agreed to by the WGA: a bonus based on the performance of a title, limited to some success level to be determined. Several studio sources said that the idea hadn't been well received on the union side and the decision was made to get the latest AMPTP proposal out in public, much in the same way AMPTP did when it released details of a proposed WGA deal during negotiations with the writers. 

One studio source told me a decision had been made midday Wednesday to release details of the most recent AMPTP proposal that evening if talks had not progressed substantially by then. By mid-afternoon Wednesday, several industry reporters were given background briefings warning that negotiations were "in trouble." The resulting stories, along with the public release of the AMPTP proposal, were an effort to push negotiations along.

What's not quite clear is what happened Wednesday evening. At some point, both Disney's Bob Iger and Netflix's Ted Sarandos declared that negotiations were over for the week and declined to offer a formal counter-proposal to the latest SAG-AFTRA response. Both CEOs were described to me by multiple studio-side sources as being "fed up," with Sarandos in particular maintaining that the current SAG-AFTRA proposal for across-the-board bonuses - regardless of performance - was "madness."

It's not clear where negotiations go from here. SAG-AFTRA sources say the union is ready to return to negotiations immediately if the studios are open to discussing the outstanding issues. As far as the AMPTP side is concerned, negotiations are suspended for now. Several sources I spoke with told me that until Iger and Sarandos were willing to return and seriously negotiate, talks were likely at a standstill for now.

Complicating all of this is that the studios are already gearing up for the eventual return of the actors. Writers are returning to work and productions are ramping up to begin, all of which incurs an expense for the studios. And we are within a few weeks of the broadcast TV shows missing their window to complete production of even an abbreviated primetime season.

ODDS AND SODS
* Christopher Kimball was a founder of America’s Test Kitchen and then Cook’s Illustrated before starting Milk Street, a content-and-commerce hybrid. In the podcast People Vs. Algorithms, he shares his core beliefs about the best way to build a media business: Be distinctive, serve a need others can’t, do more with less, avoid optimizing yourself into sameness.

* At New York Comic Con today, Adult Swim announced a new stop-motion series Women Wearing Shoulder Pads, which follows a wealthy Spaniard living in Ecuador as she journeys through the complicated world of love, family, commercials, and cuyes, a.k.a. South American guinea pigs.

WHAT'S NEW TODAY AND TOMORROW:

THURSDAY, OCTOBER 12TH, 2023:
* Code Blue Murder (Britbox)
* Coming Home (PBS)
* Doom Patrol (Max)
* Dr. STONE New World [dubbed and subtitled] (Crunchyroll)
* Fboy Island Season Premiere (The CW)
* Frankelda's Book Of Spooks Series Premiere (Max)
* Frasier Series Premiere (Paramount+) 
* Good Night World (Netflix)
* House Of Villains Series Premiere (Bravo/E!/Syfy/USA)
* In My Mother's Skin (Prime Video)
* Keke Wyatt’s World Series Premiere (WE tv)
* LEGO Ninjago: Dragons Rising (Netflix)
* Little Bird Series Premiere (PBS)
* Monster Inside: America's Most Extreme Haunted House (Hulu)
* Mud, Sweat and Tears: Premiership Rugby Series Premiere (Prime Video)
* Secrets At The Museum (LMN)
* Superbuns Series Premiere (Peacock)
* The Fall Of The House Of Usher Series Premiere (Netflix)
* The Nutty Boy (Netflix)
* Transplant Season Premiere (NBC)
* True Crime Story: Citizen Detective (Sundance Now)
* Wake (BET+)

FRIDAY, OCTOBER 13TH:
* Creepshow Season Four Premiere (Shudder)
* Curious Caterer: Fatal Vows (Hallmark Movies And Mysteries)
* Everybody Loves Diamonds Series Premiere (Prime Video)
* Goosebumps Series Premiere (Disney+/Hulu)
* John Carpenter's Suburban Screams Series Premiere (Peacock)
* Lessons In Chemistry (Apple TV+)
* Ljobon (Chaos) (Netflix)
* Natural Light (Film Movement+)
* Next At The Kennedy Center: Robert Glasper's Black Radio (PBS)
* Raid The Cage Series Premiere (CBS)
* Ready To Love: Make A Move Series Premiere (OWN)
* Serenata de las Estrellas Series Premiere (Roku Channel)
* The Conference (Netflix)
* Shining Vale Season Two Premiere (Starz)
* The Burial (Prime Video)
* The Burning Bed Series Premiere (Paramount+) 
* The Changeling Season One Finale (Apple TV+)
* The Conference (Netflix)
* The Puppetman (AMC+/Shudder)
* War In The Holy Land: A PBS News Special Report (PBS)


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

SEE YOU THURSDAY!

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