The Next Netflix Should Be Owned By Screenwriters

Most of us likely believe that if we found ourselves in an unfair, untenable circumstance, we would not hesitate to take the necessary steps to stand up for ourselves and demand appropriate respect and fair treatment.

Science, however, doesn’t back up this notion. The truth is humans are hardwired to prefer the status quo and will tolerate a hell of a lot to preserve it — even when presented with other, objectively better options. Such is our resistance to the uncertainty that always accompanies change.

We’re thinking about this fact in regard to the strike against film and television studios by the Writers Guild of America and SAG-AFTRA, a labor union representing roughly 160,000 actors, artists and media professionals in the entertainment industry. Is the innate human reluctance to upset paradigms keeping Hollywood workers from going as far as they could — and maybe should — to secure their futures?

We believe wholeheartedly in the purpose and the place of labor unions, but we also came of age in an era when organized labor proved hugely vulnerable to the machinations of both government and the corporate sector. In 1981, then-President Ronald Reagan invoked an arcane law to summarily fire more than 11,000 striking air traffic controllers, in the process signaling to corporate America that it was open season on unions.

And corporate America took the hint: Between 1947 and 1979, there was an annual average of 200 to 400 major strikes. Less than a decade later, at the end of Reagan’s second term, that number dropped to just 40.  Unions realized that corporate hardball practices — verging on, or even crossing, the line of legality — would rarely, and only minimally, be prosecuted or admonished politically. 

Ironically, about two decades before firing the air traffic controllers en masse, Reagan served as president of the Screen Actors Guild and led the union in a joint strike with the Writers Guild of America, helping to secure the system of residual payments that, until the advent of streaming, ensured writers and actors were paid fairly for their work.

In the last few years, organized labor has seen a revival in the United States. Workers have attempted, with varying degrees of success, to organize at corporate leviathans like Amazon and Starbucks. They’ve struck in the California educational system, at The New York Times and at major U.S. automobile factories. A 2022 poll indicates 71% of Americans approve of labor unions, a dramatic increase from 48% a little over a decade ago. 

All of this is ultimately good. But does organizing workers go far enough?

Can Americans really feel and be secure when fundamental top-down and capitalistic-focused structures continue to dominate the U.S. corporate landscape? U.S. workers today are still vulnerable to the pique of their bosses and executives, typically lose ownership of any intellectual property they produce, and serve to support an oligarchy that siphons off the wealth created by their labor — often regardless of whether they’re unionized or not.

Of course, it’s not usually feasible for rank-and-file wage workers to simply leave their jobs and strike out on their own. Having a choice between standing up for oneself and being able to eat is no choice at all. 

This reality is precisely what keeps workers in line and the train that is capitalism chugging along: Most workers don’t have options. They can’t just walk away. Corporate leaders know this and have used this fundamental power imbalance to perpetuate, and even grow, existing inequities. Round and round we have gone — and still go — for more than two centuries.

But rather than strike against Hollywood studios as WGA/SAG-AFTRA did this year, there may be a better way. We envision writers, actors and anyone else involved in creating the stories that people all over the world take time from their lives to watch, using industry upheaval as an opportunity to wrest back control of these stories —and their livelihoods.

An Old Idea Made New

In past Writers Guild strikes, screenwriters won financial gains but allowed the overarching power structure to remain: Studios and their executives controlled the means and terms of production. Not only did this fail to fundamentally change the power imbalance in the industry, it also marked repeated missed opportunities for bold thinking and innovation. 

Labor unrest, though frightening and painful for all involved, also invariably serves as a moment for potential paradigm disruption. In such moments, screenwriters should consider doing more than just fighting to secure better terms of employment by the Hollywood studios. Instead, writers should create a new studio of their own.

The idea is less far-fetched than it sounds, and there’s a century-old precedent for it. In 1919, United Artists, a film production and distribution company, was incorporated by three leading actors — Mary Pickford, her husband Douglas Fairbanks and Charlie Chaplin — as well as the director D.W. Griffith.

Their joint statement announcing the venture could have been written last week: “This step is positively and absolutely necessary to protect the great motion picture public from threatening combinations and trusts that would force upon them mediocre productions and machine-made entertainment.”

A more modern variation of the UA model is found in Blumhouse Productions, which was founded in 2000 and pays creators a union-minimum fee upfront but gives them a larger and more transparent cut of any profits. Just last year, Ben Affleck and Matt Damon established Artists Equity, a production company in the same vein, to reduce upfront costs and share profits with writers and actors but also costume designers, cinematographers, editors and other workers who contribute to the making of a film.

These are all improvements on the historic status quo, of course. And yet, more could be done. There is a tremendous difference between sharing a portion of profits with creators versus sharing ownership of the work itself. A company owned by a few individuals can decide to be less generous with artists or sell out altogether to larger interests or corporations; for example, United Artists is now owned by Amazon. By contrast, distributing most or all of a studio’s equity among thousands of artists effectively prevents the studio from abandoning its founding purpose. Ultimately, screenwriters would have to decide how to distribute these shares among themselves, including whether to reserve shares for future generations of writers. 

Envisioning A Writer-Owned Studio

Screenwriters could expeditiously create a studio. As for sets and equipment: Soundstages can be rented. Screenwriters would use their expertise to step into the gatekeeping role of selecting what to produce. With writers solely in charge and incentivized as part owners to focus on high-quality projects, content would also likely improve. While one chef might not be the best judge of her creations, no one is better positioned to know the best food in the world than a group of the world’s most celebrated chefs. The same would apply to a studio owned by screenwriters.  

Although existing studios have name recognition, that matters far less in the age of the influencer where TikTok stars show how easily and rapidly word of mouth and notoriety can be established. Plus, if screenwriting giants back such an endeavor, it would instantly imbue the new studio with gravitas.

While the biggest hurdle to such a venture would likely be access to capital, the money to fund a next-generation studio start-up could come from numerous sources. For example, Mozilla Foundation is a nonprofit that successfully competes against giants with its Firefox web browser, which is partially funded by the for-profit Mozilla Corporation’s roughly $500 million annual revenue.

FC Bayern München AG, a European soccer club powerhouse, is 75% fan-controlled with Adidas, Allianz, and Audi each owning an 8.33% stake. OpenAI was started as a nonprofit and then established a for-profit subsidiary that raised more than 11 billion to fund its intensive computing needs.

Or how about a more workaday example? Publix Super Markets, a Florida-based chain, is owned by 80% of its employees (and former employees). And this is no socialist charity: Publix consistently outperforms other supermarkets, like Kroger’s, with a more traditional ownership structure, putting up wider net margins despite only making one-third of Kroger’s sales. Meanwhile, REI, an outdoor gear and clothing maker, is organized as a member-owned co-operative.

Studio executives will note that some of them have recently struggled, partly due to changes in the business brought on by streaming and the more recent Covid pandemic, but also due to their executive greed. The WGA is asking for writers collectively to be paid roughly $429 million more a year, in an industry that made $28 billion in operating profit and paid eight major CEOs a combined $773 million in 2021.

A next-generation studio for writers could incorporate checks on such greed in its governing documents and principles. For example, there could be limits on how much the new studio’s executives could make relative to the lowest-paid writer-owner. The new studio could also implement something like a parity pill as pro forma for executive hiring contracts, where executives agree to automatic pay cuts during times of economic downturn and before writers were asked to reduce any payouts, even temporarily.

If outside investors were sought to help fund the new studio, there could be a cap on the potential profits these investors could realize, possibly based upon some multiple of their initial investment, with the remainder of those profits returning to other shareholders.

Benefits For Writers And Society

There are several benefits to writers creating their own studio.

First and foremost, will help stabilize employment for writers. At a time when jobs in screenwriting have become more tenuous, shorter-term and less lucrative, the cost of living in cities like New York and Los Angeles has skyrocketed. While creating a studio won’t do anything to curb inflation, lower rent or reduce mortgage interest rates, it will provide writers with steadier work and increase the percentage of revenue that goes to them. Screenwriters would have more control over how much they create and how many writers they hire.

Establishing another studio increases competition for those that already exist and increases bargaining power for writers in future negotiations for better compensation and greater job stability; that’s in addition to the aforementioned profits they would reap. Others, such as actors and behind-the-scenes artists, might also indirectly benefit from improved employment terms over time. 

Second, a writer-controlled platform will enable more permanent protections against the harmful use of AI in Hollywood, while not completely banning its use as a tool. Studio executives see AI as a cost-cutting bonanza and a means for pushing out content that is optimized to attract the most eyeballs (whether or not that would actually bear out remains to be seen, but color us skeptical).

Despite the studios agreeing to certain protections around the use of AI in negotiations this fall, the lack of anything ironclad and long-term means that the can will be kicked down the road for future labor disputes. Eventually, as technology continues to evolve, studios may find ways to use AI to generate intellectually derivative scripts, hiring writers only for revisions, if at all. This will not only lead to job losses and lower compensation but also a stagnation of culture.

The advantage generative AI has over human writers is its ability to produce massive amounts of content in mere seconds (we use the word “content” deliberately here, as distinguished from “stories,” which is what human writers create). But AI’s distinct and insoluble disadvantage is that it does not feel. In fact, it doesn’t even understand language, but rather uses math to determine which words to utilize, and in what order.

It follows, then, that until someone discovers an equation that solves for love, joy or hatred, we will need human writers for stories that delight and move us. Anything produced by AI in the future will be like one of those TV fireplace loops: It may look like a fire, but you better not count on it to keep you warm.

Third, and relatedly, a screenwriter-owned studio could improve the quality of television shows and films. Some critics have averred that the quality of films and television has recently diminished as Amazon, Apple and other streaming services spread writing talent too thin. But there is no shortage of writers capable of making great shows. The slide in quality is actually due to studios rushing production schedules, creating shorter seasons and employing dramatically fewer writers per show — often not keeping them on staff through the entire production run to save costs and increase efficiency.

Creating a studio would of course be an immense, difficult, complex and risky undertaking. It would not be a panacea for all the existing problems of Hollywood as an industry, and realistically, the effort could fail and result in repercussions for those who supported it. Even if it did succeed, the studio would only be one small organism in an otherwise unchanged ecosystem of reflexive exploitation and corporate greed. 

On the other hand, the last few decades have seen widening economic inequality, with an ever-greater percentage of national income going to corporate owners instead of laborers, and ever-larger gaps in compensation among laborers as well. CEO pay has massively outstripped pay to rank-and-file workers, to the point that even mentioning such a widely-known fact feels like mentioning that water is wet or the sky is blue.

It’s not a coincidence that union support is growing — people have seen such inequity and its residual impacts play out in their own lives. When unions were being decimated across other industries, WGA strikes were a model for how others could fight back against unbounded greed. Today’s screenwriters can lead again by helping us all write a better script for equitable labor action in the face of tomorrow’s ever-changing labor landscape.

Update: On Sept.27, 2023, this essay was updated to account for the tentative labor agreement reached between the screenwriters’ union and Hollywood studios. Most substantively, it notes that any negotiated provisions are not permanent and longterm, only lasting as long as it is approved and remains in place.