The Streaming Era Has Finally Arrived. Everything Is About to Change.


LOS ANGELES — Every three decades, or roughly once a generation, Hollywood experiences a seismic shift. The transition from silent films to talkies in the 1920s. The rise of broadcast television in the 1950s. The raucous “I Want My MTV” cable boom of the 1980s.

It is happening again. The long-promised streaming revolution — the next great leap in how the world gets its entertainment — is finally here.

Streaming services, of course, have been challenging the Hollywood status quo for years. Netflix began streaming movies and television shows in 2007 and has grown into a giant, spending $12 billion on programming this year to entertain 166 million subscribers worldwide. There are 271 online video services available in the United States, according to the research firm Parks Associates, one for seemingly every predilection — Pongalo for telenovelas, AeroCinema for aviation documentaries, Shudder for horror movies, Horse Lifestyle for equine-themed content. (Offerings include a series called “Marvin the Tap Dancing Horse.”)

While all this was happening, however, the three biggest old-line media companies — Disney, NBCUniversal and WarnerMedia — largely stayed on the sidelines. Charging into the streaming fray would mean putting billions of dollars in profit from existing cable networks like USA, Disney Channel and TBS at risk. Building video platforms of the size needed to compete with Netflix and Amazon would be frightfully expensive. And mastering the underlying technology would require a sharp learning curve. Better to bide their time. When it became clear that protecting their existing business model was more perilous than embracing the future, no matter now disruptive in the near term, they would act.

Even Netflix is starting to experience sticker shock. Ted Sarandos, the company’s chief content officer, told analysts on an October conference call that new bidders were driving up prices for “elite” content. “On a very competitive show, there has probably been 30 percent price escalation since last year,” Mr. Sarandos said.

Most definitely, streaming money is sloshing through the Hollywood economy. Producers in backwaters like children’s television are now in hot demand. Midlevel publicists are driving new luxury cars. Florists, caterers, set decorators, chauffeurs, hair stylists, headhunters — it’s gravy train time.

But fewer Hollywood people are turning cartwheels than outsiders might think. To keep their content assembly lines speeding (495 scripted original series aired in 2018, an 85 percent increase from 2011) companies are stretching some employees to a breaking point. Because streaming services order fewer episodes and cancel series after shorter runs, rank-and-file writers are having to switch jobs more frequently.

There is also a fundamental shift with employment contracts underway. Disney, for instance, has adopted new terms for TV shows. Under the old model, in place for decades, show creators were paid handsome fees from the beginning. But the big money came in success: a slice of profits from rerun sales. Disney, following a model popularized by Netflix, now offers higher upfront payments but little or no “back end.” Other traditional companies are doing the same; they say it allows for distribution flexibility inside their corporate ecosystems (broadcast, cable, streaming).

The shift has rankled members of the Writers Guild of America, which represents about 13,000 screenwriters and has been whispering about a potential strike. The W.G.A.’s contract with studios expires on May 1. Studio contracts with two additional Hollywood unions, SAG-AFTRA (actors) and the Directors Guild of America, expire on June 30.

Courtney Kemp, creator of the Starz drama “Power,” campaigned on the topic during September elections for the writers’ guild’s West Coast board. “The companies are looking actively to ‘buy us out’ up front, so they don’t have to share profits with us, and they don’t have to pay us for reuse — and they will never have to tell us the truth about the value of our content,” Ms. Kemp wrote in her campaign statement.

“They will own your intellectual property outright and forever,” Ms. Kemp continued. “As my 8-year-old daughter would say — no backsies. And that’s an issue worth striking over.”

Revolutions are not known for their tranquillity.



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