John August

WGA

Recapping the AMBA Campaign

WGA

While there’s already an official timeline of the WGA agency campaign on the Guild website, I’ve put together my own version that fills in some further details based on my own records and notes:1

Timeline of the WGA Agency Campaign

This is largely for historical record; there’s nothing really new here. But it’s helpful to see the whole campaign in context, and to resist oversimplifying the narrative.

To me, there are four main storylines to follow:

  1. WGA membership holding together
  2. The one-by-one signing of agencies 5 through 12, followed by the big four
  3. The lawsuits, and how the trial kept getting pushed back
  4. Internal and external pressures at the big four agencies, including WME’s IPO

I’d rank them in that order of significance, but they all played a part in getting us to the successful conclusion.

One important storyline doesn’t fit on the timeline because there is no associated date: TV staffing. Because of a lot of hard work and scrambling, an assortment of official and unofficial tools helped shows get staffed without agents. The much-feared staffing crisis became a dog that didn’t bark.

The pandemic isn’t listed, even though it’s obviously affected every single event since March 2020. To me, the coronavirus and the resulting shutdown was a wash in terms of its impact on the agency campaign. It curtailed both member meetings and face-to-face negotiations. It had a disproportionately large impact on the big four agencies, and a disproportionately small impact on writer income. But the most pervasive effect was psychological: the pandemic became by far the biggest issue in everyone’s life, followed by the presidential election. For both writers and agents, resolving the AMBA campaign remained a priority, but got pushed further down the list.

It’s important to keep in mind just how much happened in 2018 before the original AMBA expired. There were a lot of member meetings, both to educate writers about the issues involved, and to gauge how much support there would be for the battle. This was a two year fight only if you start the clock in April 2019 and ignore a year’s worth of preparation.

Because it’s my timeline, I’m including some things that were significant to me but may not be meaningful in the final accounting of things. For example, when I signed at Verve, it was newsworthy. But it didn’t break open the floodgates. Most writers at my level waited for the battle to be over so they could go back to their original agents — or made the transition to other agencies quietly.

I honestly have no idea what the equivalent timeline from an agency perspective would look like. We might agree that agency X signed with the WGA on a given date, but which agencies really mattered? How important were the lawsuits? Was internal or external pressure a bigger factor in getting them to sign? In the end, I’m not sure we’ll ever know.

You can find my timeline here.

  1. I served on both the WGA board and the negotiating committee, but everything here has been widely reported. In the timeline, I’ve included links to news articles where available. ↩

Feature Residuals and the Mystery of SVOD

Film Industry, Follow Up, WGA

Following up on my earlier post, here’s an update on Aladdin’s residuals.

Let’s look at the breakdown for 2020 Q3:

Re-Use Market Amount
Basic Cable $1,536
Foreign Free TV $8,071
Home Video/DVD $11,161
Pay TV $76,687
New Media — EST $11,134
New Media — SVOD $222,496
TOTAL $331,086

Note that these are total writer residuals. As Aladdin’s co-writer, I get half, so I’m simply doubling what I see in my individual residuals report.

The first four categories are pretty self-explanatory. You can find more information about them in the WGA’s residuals survival guide.

New Media — EST stands for Electronic Sell-Through. This is when a customer purchases a download, which they then own forever. If you buy a movie for $19.99 on iTunes, that’s an EST. It’s the digital equivalent of someone purchasing a DVD at Target. The residual is calculated as 0.36% of the company’s accountable receipts.

The final category is a little confusing. Even after serving on the negotiating committee for the last MBA, I ended up emailing a colleague at the Guild for clarification.

New Media — SVOD combines very two different ideas. The full title for this category should really be something like New Media — Rental and SVOD.1

Rental is what you think. If you’ve ever paid $1.99 for a movie on iTunes and had 48 hours to watch it, that’s an electronic rental. The residual is calculated at 1.2% of the studio’s accountable receipts.

SVOD stands for Subscription Video on Demand, services like Netflix, Disney+ and Hulu, also referred to as streamers. The residual is calculated as 1.2% of the amount the studio receives for licensing the movie to the service. For example, MGM might license an old James Bond movie to Amazon Prime for 12 months. The screenwriter would get a residual based off the price MGM was able to charge.

In the case of Aladdin, it’s available exclusively on Disney+. Disney is never going to license it to Netflix or Peacock or Amazon Prime. So any fee Disney-the-studio is charging Disney-the-streamer is really just numbers on a spreadsheet. They’re the same company.

Now you’re asking: Wait, if this residual is 1.2% of a made-up number, how do you know it’s a fair price?

Self-dealing is always a concern, and has long been an issue in television. My colleague at the Guild writes:

When that happens the MBA requires the company to impute a license fee based on comparable pictures. This is an issue happening across all the streamers and is one of our most important enforcement efforts.

For 2020 Q3, this lone residual was worth nearly a quarter of million dollars for Aladdin. It’s both hugely important and largely opaque.

I don’t have a breakdown to show how much of this line item came from rental versus the imputed license fee, but it’s something I’ll be watching closely in the years ahead.

  1. And even that’s not complete: this category also includes “Premium VOD,” which hasn’t really been a thing but might become more important. ↩

Feature residuals in 2020

Film Industry, WGA

I’ve written about residuals many times, and it’s a frequent topic of conversation on Scriptnotes.

But as a quick refresher, let’s go to the definition:

RESIDUALS Payments made to a film or television writer when their work is sold to another venue, such as a feature film sold on DVD, or a network television episode shown in syndication. These fees are percentages negotiated and collected on behalf of writers by the Writers Guild of America.

The most important thing to remember is that residuals only happen after the the initial run/venue. So, for a feature film, you don’t get residuals on the money it makes in theaters.1 For a TV series, you don’t get residuals the first time it airs on television. When an episode runs in syndication, or a movie is sold on DVD, that’s what counts.

I’m mostly a feature writer, so that’s been the bulk of my personal experience with residuals. For example, here’s a look at the residuals I’ve earned from Go from 1999 to 2011.

bar and line chart of Go residuals

For feature writers, residuals are an important way of keeping money coming in the door in the years between getting movies made. Without residuals, it would be difficult for many feature writers to stay full-time writers.

As Craig and I often discuss on the podcast, most WGA members — including a lot of elected board members — don’t have firsthand experience with feature issues, including residuals. So I wanted to highlight some numbers about how feature residuals have changed over the years.

I’m comparing two movies I wrote: 2005’s Charlie and the Chocolate Factory and 2019’s Aladdin. I picked them because they’re very similar movies — four-quadrant family films that made a lot at the box office.2

Title Domestic Box Office Worldwide Box Office
Aladdin $355,559,216 $1,050,693,953
Charlie $206,459,076 $474,968,763

As the writer, I know exactly how much these films paid out in WGA residuals.3 Here’s what each film generated in its first 15 months after concluding its theatrical release:

Title Home Video Pay TV New Media – EST New Media – SVOD Total
Charlie $789,439 $272,283 $0 $0 $837,146
Aladdin $216,484 $247,324 $212,387 $712,104 $1,388,299

Home video is what you think: DVDs, or VHS back in the day. Pay TV is cable, like HBO. New Media EST means “electronic sell-through,” like iTunes and such. There are rates for both purchase and rental. New Media SVOD stands for “subscription video on demand.” Think Netflix or Disney+.

Here’s what this looks like in a bar chart:

residuals bar chart

A few takeaways:

  1. Residuals are still a thing. Aladdin has kicked off $1.3 million in WGA residuals so far.
  2. The home video market is much, much smaller than it used to be. My hunch is that Aladdin sold better on home video than many non-family movies, so for many titles, their home video percentage is probably even smaller.
  3. SVOD is huge, and largely makes up for the decline in home video.

As consumers, it’s obvious that SVOD is the future. We’re not buying many DVDs. We’re cancelling our cable. And while we might still rent a movie, we’re more likely to see what’s on Netflix.

As writers, we should be watching SVOD residuals very closely. They’re not built on the same foundations as our other sources, and could quickly collapse.

Unlike home video or EST, SVOD residuals aren’t based on how many times someone watches our work. The streamers are loathe to share any information about viewership. So instead, SVOD residuals are treated more like pay TV and broadcast residuals in that writers are paid a percentage of the license fee. Basically, we get a cut of whatever the studio charges the streamer.

That works great when Warners charges Neflix $100 million for Friends. But how do we make sure Disney isn’t selling Aladdin to Disney+ for less than it’s really worth?

One way to look at self-dealing is to bring in comps. If you can show that a streamer paid $5M for a three-year license to a similar film, it’s hard to argue that it’s “really” worth only $1M. But that only works when there really is a market. Every studio basically has its own streaming service, so it’s increasingly difficult to show any comparative prices.

An even bigger concern is what happens when these movies debut on the streamers. Remember: residuals are paid only on money earned outside of the initial venue. If Aladdin had debuted on Disney+ rather than in theaters, would it have generated residuals at all? I suspect that’s an open question, one that feels especially relevant as more movies are being pulled from theaters during the pandemic.

Craig and I talk about these issues on episode 472 of Scriptnotes.

  1. Or, weirdly, airplanes. ↩
  2. Inflation adjusting for 2019 dollars would put Charlie at $270M domestic and $621M worldwide. ↩
  3. For Aladdin, the residuals are divided between me and the co-writer, so I’ve doubled them here. ↩

My Non-Candidate Statement

WGA

To My Fellow WGA West Members,

Two years ago, you voted me onto the Board of Directors. Thank you. I’ve taken the responsibility very seriously.

I co-chaired the newly-created screenwriting subcommittee. After a series of outreach lunches and an extensive survey of members, we focused on three urgent issues for screenwriters: free work, one-step deals, and late payment. Then we got to work.

We met with the heads of Paramount, Sony, Warners, Universal and Disney to explain how their practices were harming not only writers, but the creative process.

We launched the “No Writing Left Behind” campaign to remind both writers and executives that free work hurts everyone. I spearheaded the Start Button project as a way to help screenwriters get paid on time.

We organized feature writers working in animation to discuss how to get more of our work Guild-covered—or at a least approach parity at non-signatories.

Finally, we started the discussion on how to best think about credits in the 2020s, when the definitions of “theatrical” and “first writer” are increasingly murky.

I’m also a member of the negotiating committee for the agency campaign. I’ve spoken and emailed with hundreds of you. Thank you for your engagement on this crucial issue. I want to make sure we get a deal for writers that will still look good five, ten and twenty years from now.

I’m not running for re-election this cycle because I’m planning to direct a movie. But I remain committed to making sure the Guild serves all its members. In that spirit, these are the candidates I believe can best deliver on the Guild’s promise. (I’ve included links to their candidate statements where available.)

DAVID GOODMAN (President)
The job of president requires empathy and experience. I saw both of these firsthand with David Goodman. He listens to members and knows how to get things done.

An example: Just a week into the job, I came to David with concerns that colleagues on Twitter had raised about submission packets for late night and variety shows. It felt like free work. David convened a group of late-night/variety showrunners and writers to hammer out a set of best practices to make sure writers were protected, then coordinated with WGA East for shows based in New York.

It wasn’t flashy. It wasn’t something he campaigned on. But it was protecting writers, and that’s the job of the Guild and its president. Time and again, David Goodman has done it.

MICHELE MULRONEY (Secretary/Treasurer)
Michele co-chaired the screenwriting subcommittee, and deserves the lion’s share of the credit for what’s been achieved. Her experience and dedication are unmatched. And with three feature writers leaving the board (me, Andrea Berloff and Zak Penn), Michele is more essential than ever. link

It’s been my pleasure to serve with the following incumbents, each of whom has shown remarkable insight and commitment on issues ranging from sexual harassment to the agency campaign. They’re ready for whatever the next two years bring.

MARJORIE DAVID (VP) link
ANGELINA BURNETT link
LUVH RAHKE link
MEREDITH STIEHM link
NICOLE YORKIN link

While these incumbents’ experience is crucial, it’s also important to welcome new voices. In my two years on the board, I’ve keenly felt some missing perspectives. Here are four writers I’m excited to see join the board:

LIZ ALPER
Recognizing a need, Liz created the #WGASolidarityChallenge Grid and the Comprehensive 2019 Staffing Grid. I can’t wait to see what she does next. link

ROBB CHAVIS
A former attorney, Robb rose up through diversity writing programs and can speak to both the promise and pitfalls of these efforts. link

DANTE W. HARPER
Dante is an experienced feature writer. We’ll need him on the board this coming term. link

ZOE MARSHALL
Zoe organized a series of five staffing and development mixers for more than 750 writers, showrunners and executives. She didn’t ask for permission; she asked for results. link

No matter which candidates you support this election cycle, let’s remember that the Guild needs to represent all of us because the WGA is all of us. Unity does not mean uniformity. Lively discussion shows an engaged membership ready to face the challenges ahead. Let’s get there together.

With thanks,

John August signature