Hollywood writers are returning to work with a new contract that will change the way the industry works by giving creators a greater share in the upside of successful streaming shows and films, which means companies like Netflix and Disney will need to share more data about their viewership.
But while many hoped the months-long struggle between the Writers Guild of America and the Alliance of Motion Picture and Television Producers — which represents the entertainment giants like Netflix, Disney, and Warner Bros. Discovery — would rip the curtain back on the data secrecy practiced by the streamers, that’s not quite what happened.
The lack of transparency around streaming metrics — from tech disruptors like Netflix and Amazon as well as legacy Hollywood companies — was a major issue driving the WGA’s strike as well as the ongoing SAG-AFTRA walkout. In a hit-driven business where creators and stars have relied heavily on residual payments from successful projects, a lack of clear measurement has limited creators’ ability to share in that success, the writers’ and actors’ guilds say.
The leading streamers have released top title lists in recent years, but each service has its own formula for choosing those top shows and movies, and their numbers aren’t independently verified.
Creators are “getting some visibility into how the sausage is made, so to speak,” said Tom Ara, entertainment lawyer at DLA Piper, who advises AMPTP member studios and networks.
And it’s not just creators hoping for bigger residual checks who are eager for more transparency about streaming data. The WGA’s win on this issue has also raised hopes among advertisers that they will ultimately benefit from the increased openness.
As Netflix, Disney, and more companies pitch new ad-supported streamers, advertisers have griped that streamers have been slow to share the data about audience numbers and composition. Brands and marketers consider these insights necessary to show who their messages are reaching and if their ads are working.
“It’s a big frustration for the buyers. They get very little visibility about where their ads ran. From the streamers’ perspective, they wouldn’t want to unbundle what they’re selling because there’s a real efficiency to not letting people cherry-pick small slices of their inventory,” said Kevin Krim, president and CEO of EDO, which measures the impact of TV and streaming ads.
Brands investing in films for distribution on streamers also are clamoring for more data to understand how many people are watching them.
“Ultimately, the one thing that everyone in the TV landscape has been chasing is transparency, including writers and actors needing to know how many people are watching their work in order to properly value themselves,” Ashwin Navin, cofounder and CEO of Samba TV, which measures TV audiences, told Insider. “The outcome of the WGA strike is a meaningful step towards a much more level playing field between streaming platforms, studios, and the talent themselves.”
Still, the WGA contract provides far from the full transparency many would wish for.
The WGA initially asked the AMPTP for a viewership-based residual, in addition to an existing fixed residual, to reward hit programs; the guild also asked for transparency around that viewership.
What the guild is getting hardly qualifies as transparency, though it will translate to bigger checks for some writers. The AMPTP agreed that streaming services would confidentially share the total number of hours streamed for top-performing programs, revealing such data to up to six people at the WGA, and thus providing the basis for a new viewership-based residual — or “performance-metric bonus,” as the agreement calls it.
The WGA can share the data with its broader membership, but only in aggregated form.
So while leaks are bound to happen, in theory, writers won’t actually know how their shows performed, except indirectly in the form of bonus payments.
The data sharing only applies to high-budget original series and films, as defined by the agreement (which sets specific dollars-per-programming-hour parameters), and only shows or movies that are viewed by 20% of the service’s membership in their first 90 days will qualify for the bonus.
That means no extra payments for non-originals or licensed shows like “Suits,” which was a runaway success when Netflix picked it up; or to a low-budget show that happens to become a global hit (“Squid Game” comes to mind).
It’s unclear how many writers will benefit from the bonus, and the WGA would have to pay to have any data audited, if it chooses. The opacity will still keep measurement firms like Nielsen and Parrot Analytics plenty busy.
But the agreement will cover most US scripted productions produced for major streamers, Pryor Cashman entertainment lawyer Simon Pulman said.
“It’s certainly a significant step forward, although it stops short of full transparency,” he told Insider in an email.
Independent producer Ted Hope said the union’s win was “tremendous” given the companies’ longtime hard stance against sharing data. But he said to be successful as businesspeople, artists need to know how their work is performing so they can improve on it.
Distributors are also extracting value from content to sell not only subscriptions but advertising and merchandise — value that creators aren’t sharing in, he said.
“You can’t expect someone to be a good businessperson and focus on the audience without having the exact same data other people have — whether it’s the advertiser, the person who makes the algorithm,” Hope said. “You need an equal playing field.”
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