Hollywood is at a standstill as writers have stopped working and want the studios to address two key issues – firstly, challenges faced by AI and secondly, the issue of residual payment based on viewership levels on streaming platforms.
One of the world’s biggest soft powers is in the news for having a hard time. Hollywood is at a standstill as writers have stopped working and want the studios to address two key issues – firstly, challenges faced by AI and secondly, the issue of residual payment based on viewership levels on streaming platforms (Netflix, Prime etc.). Enough has been discussed about the former, it is the latter that has some interesting but less discussed complexities.
The entertainment business is known for flops and super performers. So, when creative personnel ask for residual payments based on viewership levels of super performers, it does seem a fair demand. However, implementing this fair demand in today’s business environment is not only complex but also has the potential to create newer problems.
In the good old days, revenue earnings received from the distribution of content (film/TV series etc.) were easily identifiable and measurable (box-office earnings, royalties from television/DVD etc.). Today, however, distributors like streaming platforms, use content not just for revenue gains but also for non-revenue benefits. streaming platforms use the power of content to disrupt viewing habits, or to develop insights into consumer preferences, or to strengthen their other businesses (Jio using content to strengthen telecom business) etc.
Content today even has implications in the political landscape. This makes an objective measurement of earnings from any content and therefore of the residuals to writers a very complex task. Further, to increase viewership, streaming platforms necessarily need to invest larger sums in free content and in high-quality but unprofitable content. Since these costs need to be accounted for before computing the residual payments for super performers, the complexity gets an added dimension. Lastly, since viewership data is a strategic asset for streaming platforms, the platforms’ averseness in sharing the same is expected. This only adds another hurdle in computing viewership-based residuals.
Despite all these complexities, assuming streaming players agree to pay residuals to writers based on viewership levels, it may sound very fair until one realizes the fact that since for viewers the incremental cost of watching any content on streaming platforms is zero (streaming platforms generally charge viewers only a fixed monthly fee and no pay-per-view charge), if residual income is to be paid based only on viewership levels, writers of populist and sensational content would earn much larger residuals compared to writers of artistic and meaningful content since the former will always have much larger viewership levels. This solution would, thus, create a new problem for the writers’ guild.
To counter this new problem of viewership advantage enjoyed by writers of populist content, it could be suggested that the writers’ guild should insist that instead of a monthly subscription fee model, streaming platforms should allow audiences to access content only on a pay-per-view basis. But the pay-per-view system also has its share of unfairness. Subscribers of streaming platforms experiment with watching films of unknown writers and lesser-known artists only because there is zero incremental cost towards watching such content. Once such content is liked, it gets recommended to others. In this process, new and unknown writers/artists get visibility and can build their careers. If subscribers of streaming platforms need to incur incremental costs for viewing content from new and unknown writers/actors (as against a fixed monthly subscription fee), they are less likely to try them out. This will significantly reduce the visibility levels of new writers/actors, making it very difficult for them to move up in life.
Hence, the search for a one-size-fits-all formula for residual payment by the streaming platforms could be an exercise in futility. Moreover, even if the writers’ guild finds a magic formula today, with the continuously evolving technological landscape, today’s magic formula could become unacceptable tomorrow.
Considering these complexities, one solution may possibly lie in the writers having the option to choose between a fixed fee (as existing) and a lower fixed fee plus a residual that is based on a scientific process of rating by the viewers. This could work since streaming platforms would be more open to sharing viewers’ ratings (rather than sharing viewership data). Secondly, this would also remove the advantage populist content enjoys over artistic content due to the former’s high viewership.
In the world of digital disruption, the guild should restrict its role only to protecting individual writers’ rights within options chosen by the writer and not dictate one fixed structure for all writers. The latter would only mean harder times for everyone.
(Disclaimer: Deepesh Salgia is the Producer of ‘Mughal-e-Azam: The Musical’. Views expressed are personal)