As it prepares for tough negotiations with the major studios, the Writers Guild of America issued a report on Friday emphasizing that the entertainment business is “highly profitable.”
The guild is seeking to counter the gloomy tenor of industry coverage, which tends to stress that companies are losing billions on streaming. In its State of the Industry report, the guild argued that entertainment divisions remain profitable overall, and that the companies have a “path to profitability” in streaming.
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“(T)he fundamental truth remains: the content writers create has tremendous value,” the report concluded. “The companies have demonstrated time and time again that they can and will capture that value, but writers and the WGA must work to ensure that success is shared.”
The WGA is set to begin negotiations with the Alliance of Motion Picture and Television Producers on March 20. The guild has been preparing members for a “rough” and “rugged” round of bargaining, as they seek to dramatically improve both minimum compensation and streaming residuals.
The latest report did not touch on compensation issues, but the guild told members in an email to expect further analysis of that topic next week, adding “(Spoiler Alert: Writers have fallen behind).”
Media stocks plummeted last year, as the “Netflix correction” caused investors to reevaluate their bullish view on streaming. Some companies have also been tightening their belts. The WGA chalks that up to Wall Street “noise” and a narrow focus on short-term profits.
The guild’s report acknowledges that industry profits were down in 2021 from their peak in 2018-19. As the union was gearing up to fight the talent agencies over packaging fees in 2019, it issued a similar report arguing that companies were enjoying “unprecedented prosperity” but that writer compensation was not keeping pace with inflation.
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