Striking Hollywood writers lament residuals slide

By Dawn Chmielewski

LOS ANGELES (Reuters) – Writer Kyra Jones knew she would be taking a financial hit when she agreed to join the writers’ room for the Hulu comedy series “Woke.”

The first payment she received for her share of the show’s digital rentals was a mere $4, before taxes, barely enough to buy a latte. The streaming residual check amounted to one-third of the $12,000 Jones received in residuals for writing one episode of the ABC drama “Queens.”

Jones said she knew it would be lower than broadcast networks paid in residuals. “But I didn’t know it would be that bad.”

Residuals have emerged as a central issue in the strike by 11,500 members of the Writers Guild of America, who are seeking better compensation and staffing commitments from Hollywood’s studios.

The writers argue that streaming services, which upended decades of television industry business practices, have significantly undercut their compensation. They say they aim to recover lost income, in part, by proposing streaming payments that take into account the number of times an episode is viewed, and the number of subscribers outside the U.S.

The Alliance of Motion Picture and Television Producers, the group negotiating on behalf of the studios, says streaming has been a boon for writers, giving them more opportunities for assignments and allowing them to earn income on shows that were canceled or would not otherwise reach syndication.

When broadcast networks dominated the living room, writers saw multiple paydays. In addition to their weekly salaries, they would receive a script fee for each episode they wrote, then collect reuse payments known as residuals every time that show aired again, often over the summer months.

Once a show reached the 100-episode mark, it could be sold into syndication, filling up daytime programming schedules for local television stations, rerunning on cable networks or outside of the United States. Writers would receive a check every time their episodes appeared on a TV screen.

RESIDUALS WERE ‘VERY HEALTHY’

Streaming changed the compensation structure and now accounts for the largest share of TV residuals.

“We used to get very healthy residuals. A writer might go a year without work or maybe two and you would be able to live off those residuals, comfortably, and you’d still get paid for the work that you have done,” said Kristine Huntley, who worked as a writer and producer on the AppleTV+ series “Surfside Girls.”

Those numbers have “come down so low that, where you would get maybe a five-figure residual now you might get a three-figure residual,” she said.

Writers still collect weekly paychecks and per-episode writing fees, though streaming series typically have fewer episodes per season – meaning fewer opportunities to receive a writing credit, and lower compensation.

With streaming, residual payments are not based on the number of times an episode is viewed. Rather, there is a fixed annual fee that takes into account the number of subscribers, with Netflix (NASDAQ:), Amazon (NASDAQ:) Prime Video and Disney+ paying more to writers.

One studio executive said writers negotiated a 46% increase in residuals for streaming programs, starting in 2022. Those fatter checks are just kicking in now. Another industry source, who also requested anonymity, said residuals reached an all-time high last year, with almost 45% coming from streaming, the lion’s share from Netflix.

The latest guild proposal would bump foreign streaming residuals by 200%, a number studio executives noted fails to recognize that subscription fees vary from country to country.

The guild says it is looking to close the gap in domestic and international residual payments.

Netflix currently pays a $20,018 residual for a one-hour episode that plays in the United States, but one-third of that amount for the same episode to be streamed by more than 150 million global subscribers.

Over her decade-plus career as a Hollywood writer, Leila Cohan has worked on network TV shows and streaming series, including as co-executive producer on Netflix’s popular period drama “Bridgerton.”

“Bridgerton” is one of Netflix’s most-watched series, though the lower-profile MTV Network comedy “Awkward” produced higher residual payments for Cohan, who wrote five episodes over the show’s final two seasons.

“It wasn’t enough residuals to live off of, but a pretty healthy supplement,” said Cohan. “Even now, I still get a couple thousand from it a year.”

“Bridgerton,” with its eight-episode seasons, led to a single writing credit in 2020, and a royalty check that Cohan said did not reflect the show’s importance to Netflix.

“Residuals are meant to be some level of profit sharing,” Cohan said. “If ‘Bridgerton’ is one of the most successful shows, and it’s bringing a huge number of subscribers to Netflix or helping them keep their subscribers, I do think I should be compensated for that value.”