Hollywood’s screenwriters voted overwhelmingly on Tuesday (AEST) to authorise strike action if they don’t secure a better deal with the studios by May 1. If negotiations don’t produce an improved outcome by then, it could be pens down – and if so, the impacts could be significant.

The last time members of the Writers Guild of America went on strike, in November 2007, dozens of shows – including ER, Breaking Bad, 30 Rock and Family Guy – were forced to shorten their seasons and others were cancelled entirely.

What’s this beef all about?
At its core, like most such disputes, it’s about money. In this case, it’s specifically about where the money flows in the era of streaming. The WGA agreement with the AMPTP (Alliance of Motion Picture and Television Producers) guarantees writers a minimum rate for any film or TV show or web-based bit they might work on, setting fees for a “story” (the narrative arc of an episode), a “teleplay” (the actual words of the script for that episode), or a combined “story and teleplay” for comedies and dramas (variety shows and narration for documentary also have their own schedule of fees). Rates are set according to the length of the episode – up to 15 minutes, up to 30, up to 60 and so on.

The key issue is that the streamers pay about 20 per cent less than traditional broadcasters for a new script, they generally commission fewer episodes (typically seasons of eight to 10, rather than the 22 traditionally favoured by free-to-air networks), and they employ reduced teams to craft a series story arc before farming individual episodes out.

An even more pressing issue is the massively reduced residual payments for repeat screenings, syndication to regional networks and sales to foreign territories paid by the streamers (one writer recently claimed he is getting $700 for a streaming re-run when the fee on network TV would be about $13,000). All this has had the impact of vastly reducing the amount of money writers earn from their work, even as the streamers are raking in massive dollars in subscription fees and rewarding their top-level executives accordingly.

Why is this coming to a head now?
The current agreement came into effect on May 2, 2020, as the pandemic was raging and streaming was booming. The new agreement is being struck against a backdrop of a streaming sector facing a reckoning over massive losses, subscriber stagnation and the culling of libraries in an effort to reduce costs.

The WGA also won a protracted battle last year with the big agents, who had increasingly moved to a model of packaging writers, directors and actors together – with the end result that the agency profited (taking a fee from the commissioning studio for its efforts) at the expense of the talent it ostensibly represented. That means its membership is perhaps a little more steeled for a fight and confident of success than it would otherwise be. But the great Netflix correction and major financial losses for Disney and Warners in recent times probably make the studios reluctant to give much ground. Hence the intransigence on both sides.

What would a strike actually mean?
The last time the writers went on strike, in 2007, they were out for 100 days. The cost to the entertainment industry was estimated by non-partisan think tank The Milken Institute at $US2.1 billion. Other estimates have put it north of $US4 billion. Production slates and programming were disrupted for more than a year, in a variety of ways: some scripted shows were cancelled, some had reduced seasons, some were delayed. But some reality and talk shows boomed.