As the Writers Guild of America tries to come to terms with Hollywood studios for a new contract, the union is blasting the Walt Disney Co., Netflix and Amazon as the “new gatekeepers” of media in a new antitrust report that accuses the entertainment behemoths of anti-competitive practices.
The Thursday report, issued by the WGA’s West Coast branch, comes after the guild and the Alliance of Motion Picture and Television Producers, which represents the major studios and streamers, restarted negotiations to end the writers’ strike that has been going on for more than 100 days.
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Despite optimism sparked by the renewal of talks, the sides remain far apart on key issues, including the WGA’s demands for minimum staffing requirements on TV writers’ rooms.
The union’s report argues that Disney, Netflix and Amazon have used their growing size and industry clout to undercut writers. The document details how media and tech companies have consolidated power through mergers and acquisitions, and called on government regulators to put a stop to it.
Major acquisitions over the years have included Disney’s purchase of 21st Century Fox in 2019 and Amazon’s acquisition of Metro-Goldwyn-Mayer Studios, which was completed last year. The guild also contends that streamers like Netflix pioneered business models that reduced the pay of writers and were later adopted by other, more traditional companies, including Disney.
The WGA report makes the case that vertical integration, which is when studios make content for their own distribution platforms, has hurt writers and will get only worse if it continues.
“Each [company] is now taking anti-competitive vertical integration to an extreme, turning its streaming service into a walled garden for self-produced content — a model built for and dependent on restricting the availability of independent content from competing producers, underpaying creators, and, above all, making future consolidation the name of the industry game,” the WGA West said.
Disney, Netflix and Amazon declined to comment or didn’t respond to requests for comment.
The WGA has been on strike since May 2, with writers demanding better pay from streaming shows as well as protections from artificial intelligence and other industry shifts. SAG-AFTRA, the union representing actors and other performers, walked off the job in mid-July.
Contract talks resumed only recently, after a long pause in bargaining. Though neither the AMPTP nor the WGA has commented on the progress of the talks or the details of their back-and-forth, the antitrust report is a barb against the studios at a sensitive time. It remains unclear how long it might take for a compromise to come to fruition. Few industry observers expect a quick resolution.
“I think they would have a more conciliatory tone if they were anywhere close to an agreement,” said David Smith, a professor of economics at Pepperdine University’s Graziadio Business School.
In its report, the WGA West raised concerns about more consolidation among streaming services in the future. The guild said that if big mergers and acquisitions continue, it will put more pressure on the wages of writers, who have already seen their pay eroded by the smaller number of episodes per season on streaming services.
“The accumulation of market power enables these companies to undervalue writing services and the writers who supply them,” the WGA West said. “Further consolidation will leave writers with only a few potential employers, and these dominant content buyers will have a significantly decreased incentive to innovate.”
The guild called on antitrust regulators and lawmakers to block deals and investigate anticompetitive practices and increase regulation of the streaming industry. U.S. regulators recently halted the proposed publishing merger of Simon & Schuster with Penguin Random House. After the setback, Paramount Global agreed to sell Simon & Schuster to private equity firm KKR.
There has been increased pressure on studios to resolve the dual Hollywood strikes with film and TV writers and actors, including from investors.
This week, New York City Comptroller Brad Lander, on behalf of trustees of five New York City pension funds, sent letters to Disney, Comcast and Paramount Global, urging the companies to end the strikes.
“The costs of this disruption are great, and are increasing by the day, along with the financial risk to your company’s market valuation,” Lander wrote in a letter to Disney’s chief executive, Bob Iger, on Aug. 14. “We urge your company to end the WGA and SAG-AFTRA strikes promptly in order to ensure the long-term stability of your business and your shareholders’ investments.”