MBA Negotiations 2020: Streaming Residuals
May 21, 2020
Dear Member,
Streaming is the fastest growing segment of the business; global subscription streaming revenue more than doubled over the last four years to $37 billion in 2019 and is projected to reach $62 billion in 2023. Disney+ only launched on November 12, 2019 and has already reported 54.5 million global subscribers. Netflix recently reported almost 183 million global subscribers. The pandemic has cemented streaming’s impending dominance, making starkly clear its economic value. This past March and April, for example, streaming platforms saw their viewership grow by 117% over the previous year. With the rollout of new platforms in the coming months, those numbers will only increase.
As we enter the global streaming era of the business, the MBA must reflect the realities of writing in the streaming market and ensure that we share in the success these services derive from the programming we create.
STREAMING RESIDUALS
Residual payments are the back end and the back stop of all middle-class writers. They are the way we share in the enduring value of our work and in the continued growth of the business. But in the streaming world, where content stays exclusive to a single global platform, revenue-based residuals that grew along with studio revenue from licensing and foreign sales have been replaced by a low annual fixed payments. We have a number of proposals that seek to adapt this longstanding pact where we share in the growth of the business to the streaming market.
VIEWING BONUS: In streaming, viewership equals success for the companies. Writers who create content that attracts large audiences should be rewarded for the success of their work. As viewership grows, so too should residual payments. We are proposing a tiered system of bonuses that is payable, in increments, based on the number of streams on subscription streaming platforms.
INCREASING THE FIXED RESIDUAL PAYMENTS: We also need to increase the fixed payments that apply to both domestic and foreign subscription streaming reuse. As these services grow, the baseline value for constant availability around the world of the programming we create needs to increase. Both Netflix and Amazon have foreign subscribers that far exceed their domestic subscribers. Disney+ is on the same path. And yet, the fixed foreign residual for our work is only 35% of the domestic residual in the first year, and it declines after that. This is a relic from an old business model and it needs to be addressed. We are seeking to significantly increasing the foreign residual so that it accurately reflects the value of our work in the foreign market.
COMEDY-VARIETY: These programs have become a staple of the streaming services and yet their writers receive minimal residuals for their work. There is no justification for that. We are proposing that comedy-variety writers receive the same kind of residuals that writers who create comedies and dramas receive on subscription streaming services.
TV REUSE ON AD SUPPORTED VIDEO ON DEMAND (AVOD): Reruns of TV series on AVOD increasingly replace broadcast networks repeats, and they do so at pennies on the dollar. Meanwhile, executives boast about how this on demand availability brings in millions of viewers. We are proposing raising the residual rates for reuse of traditional media on AVOD platforms.