
Get in the KNOW
on LA Startups & Tech
XHow Big Tech Put Itself in the Middle of Hollywood's Biggest Labor Battle in Years
Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

As giants like Apple, Netflix and Disney spend big on streaming content and fight for subscribers, their apps are supplanting theaters, premium cable, reruns and even the humble DVD box set.
The shake up was evident at the 2021 Emmy Awards, where streaming services swept the top categories with shows that included "The Crown" and "Ted Lasso." But as Scarlett Johansson made clear in a just-settled lawsuit against Disney, Hollywood's transformation is also upending the way talent gets paid — and that's hitting everyone from the A-list actors to the technicians who haul 50-pound cameras on their backs.
The issue could even grind Hollywood production to a halt, as streaming's rise and the pandemic flare tensions across the industry. What happens next hinges on how a crucial labor battle plays out in the coming days and weeks between behind-the-scenes workers and some of the most powerful corporations on the planet.
Big Tech and the Strike Authorization Vote
The union behind the workers who operate cameras, dress actors, build sets and clean toilets — the International Alliance of Theatrical Stage Employees (IATSE) — will vote over the weekend on whether to authorize a strike amid protracted contract negotiations with the Alliance of Motion Picture and Television Producers (AMPTP). Some of the biggest names in tech, including Apple, Netflix and Amazon (which bought MGM), have a seat at the table alongside AMPTP's major studios. That means their lawyers sit opposite of IATSE union members in negotiations over pay and working conditions.
"We are united in demanding more humane working conditions across the industry, including reasonable rest during and between workdays and on the weekend, equitable pay on streaming productions, and a livable wage floor," said IATSE President Matt Loeb earlier this month, alluding to the reports of grueling 14-hour workdays faced by crews.
IATSE wants to boost what they're paid for streaming projects, some of which are still discounted from the "basic rates" that traditional film and television projects pay. The union also wants streaming providers to pay higher residual rates to fund their healthcare and pension. The terms under negotiation were established more than a decade ago, when beaming original content to your laptop was an experiment of uncertain profitability.
But those discounted rates are still in play today, "even on productions with budgets that rival or exceed those of traditionally released blockbusters," according to IATSE. The streaming rates outlined in current contracts reportedly made it possible for Apple, a $2.3 trillion company, to trim behind-the-scenes workers' paychecks. Apple did not respond to a request for comment.
"AMPTP says that they do not want to be forced to pay our pension plan fair residuals on streaming because it is an 'experiment' (their words). An unproven revenue stream. Which, lmao, maybe they didn't watch the Emmys," Ian Edwards, a digital imaging technician in IATSE Local 600, told dot.LA in a direct message.
Working on a streaming show like "'The Mandalorian' as an experimental streaming property, can be much harder than working on 'Two and a Half Men' on stage, which pays proper residuals," said Andy Kennedy-Derkay, 2nd assistant cameraperson and IATSE member. "It's just ludicrous to think of things this way – as if we are shooting a web series, when we are making the most expensive television shows ever produced." Current streaming residuals are "infinitesimally small in comparison to the purchase of a DVD," he said in a call with dot.LA.
'Critical' Condition
IATSE workers depend on those shrinking residuals to fund their pension, which is nearing "critical" condition under federal law, according to Deadline. It's currently 68.9% funded, and as residuals from DVDs and other secondary markets decline, streaming giants do not appear interested in picking up the slack.
"One of the issues with streaming is there really isn't that natural second market there," Todd Holmes, assistant professor of entertainment media management at California State University, Northridge, said in a call with dot.LA. "So in terms of residuals, there's really not a structure set in place right now for people that are members of IATSE to get any kind of money, because a lot of these things are Netflix originals. That's a problem," Holmes added.
If a film goes straight to Netflix and stays there, how would residuals even work?
"The data is there," said Holmes. "Netflix and everything, they keep their information very much under lock and key, but they have access to that information. They know, certainly, the number of streams and they have a lot of consumer data, so there are ways to determine the residuals. It's just so far the AMPTP, they haven't wanted to include that in part of the equation."
AMPTP said last week that it is "committed to reaching an agreement at the bargaining table that balances the needs of both parties and will keep the industry working."
The trade group warned that a strike would jeopardize two crucial elements of the negotiations: workers' health care and retirement, telling Deadline: "A strike will have a devastating impact on the industry and inevitably will result in thousands of IATSE members losing their income, failing to qualify for health insurance benefits, jeopardizing funding for the pension plan and disrupting production."
A number of factors are contributing to IATSE's leverage over the major studios, including the growing demand for streaming and a production backlog caused by the pandemic. The union also has support from more than 100 members of Congress, as well as celebrities like Seth Rogan, Cynthia Nixon and LeVar Burton.
Between October 1 and October 3, members will vote on whether to allow IATSE President Loeb to call a strike. The results of the vote will be announced the following day. If workers authorize a strike, the vote will be used as a bargaining chip in the ongoing talks. It's not clear how long a strike would last if one is called.
"Do I think it'll work? Yeah I think it'll work. And I think that in all likelihood when push comes to shove, if they decide to allow us to strike, they are going to get a wake-up call of what a powerful union can do and I think it will blow up in their face," said Kennedy-Derkay.
"We're used to going through hard times," he added. "Crew members go through hard times every time they accept a job. The people who work for 70 hours a week for eight months, who don't see their families, whose health and mental well being crumbles — they make incredible films and television and they show up every single day and give their 100% to craft the vision of the people they're collaborating with. We know how to grind. We would much rather grind at a stage than at a picket line. But I have tremendous confidence that we will stand strong."
- Netflix's $100 Million Relief Fund: How It Started and Where It'll Go ... ›
- Hollywood Strike? IATSE's Historic Vote Results Are In - dot.LA ›
- IATSE Vote Results in Authorization to Call a Strike ›
- Hollywood Strike Date Set Unless Agreement is Reached - dot.LA ›
- IATSE Reaches Deal with Major Studios - dot.LA ›
- Hollywood Union IATSE Ratifies Contract Backed by Studios and Big Tech, But Not By Popular Vote - dot.LA ›
Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.
Subscribe to our newsletter to catch every headline.
Activision Buys Game Studio Proletariat To Expand ‘World of Warcraft’ Staff
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Activision Blizzard intends to acquire Proletariat, a Boston-based game studio that developed the wizard-themed battle royale game “Spellbreak.”
VentureBeat first reported that the Santa Monica-based publisher was exploring a purchase, noting its ongoing mission to expand the staff working on Blizzard’s hit massively multiplayer online game “World of Warcraft,” which launched in 2004.
Proletariat’s team of roughly 100 people will be merged into Activision’s “World of Warcraft” team to work on its upcoming expansion game. Though there’s no release date as yet for the title, “World of Warcraft: Dragonflight” is expected to debut before the end of this year.
Activision did not immediately return a request for comment. Financial terms of the deal were not available.
This Proletariat deal is Activision's latest push to consolidate its family tree by folding its subsidiary companies in under the Blizzard banner. More than 15 years after it bought out New York-based game developer Vicarious Visions, Activision merged the business into its own last year, ensuring that the studio wouldn’t work on anything but Blizzard titles.
The deal could also have implications for workers at Activision who have looked to unionize. One subsidiary of Activision, Wisconsin-based Raven Software, cast a majority vote to establish its Game Workers Alliance—backed by the nationwide Communications Workers of America union—in May.
Until recently, Activision has remained largely anti-union in the face of its employees organizing—but it could soon not have much of a say in the matter once it finalizes its $69 billion sale to Microsoft, which said publicly it would maintain a “neutral approach” and wouldn’t stand in the way if more employees at Activision expressed interest in unionizing after the deal closes.
Each individual studio under the Activision umbrella would need to have a majority vote in favor of unionizing to join the GWA. Now, Proletariat’s workforce—which, somewhat ironically given its name, isn’t unionized—is another that could make such a decision leading up to the Microsoft deal’s expected closing in 2023.
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Snap Officially Launching ‘Snapchat Plus’ Subscription Tier
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Snap is officially launching Snapchat Plus, a paid subscription plan on Santa Monica-based social media company’s flagship app.
Snap is now the latest media company to tack a “plus” to the end of its name—announcing Wednesday that the new service will provide users with “exclusive, experimental and pre-release features” for the price of $3.99 a month. The first features available to paying subscribers include the ability to customize the style of app’s icon, pin a “BFF” to the top of their chat history and see which users have rewatched a story, according to The Verge.
The new product arrives after Snap confirmed reports earlier this month that it was testing Snapchat Plus—though the version that it has rolled out does not incorporate the rumored feature that would allow subscribers to view a friend’s whereabouts over the previous 24 hours.
Snapchat Plus will initially be available to users in the U.S., Canada, U.K., France, Germany, Australia, New Zealand, Saudi Arabia and the United Arab Emirates. While certain features will remain exclusive to Plus users, others will eventually be released across Snapchat’s entire user base, Snap senior vice president of product Jacob Andreou told The Verge. (Disclosure: Snap is an investor in dot.LA.)
The subscription tier introduces a new potential revenue stream for Snap, which experienced a “challenging” first quarter marked by disruptions to its core digital advertising market. However, Andreou told The Verge that the product is not expected to be a “material new revenue source” for the company. He also disputed that Snap was responding to its recent economic headwinds, noting that Snap had been exploring a paid offering since 2016.
Despite charging users, Snapchat Plus does not include the option to turn off ads. “Ads are going to be at the core of our business model for the long term,” Andreou said.
Snap is not the first popular social media platform to venture into subscriptions: Both Twitter and Tumblr rolled out paid tiers last year, albeit with mixedresults.Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Bling Capital’s Kyle Lui On How Small Funds Can Better Support Young Founders
On this episode of the LA Venture podcast, Bling Capital’s Kyle Lui talks about why he moved earlier stage in his investing and how investors can best support founders.
Lui joined his friend—and first angel investor—Ben Ling as a general partner at Bling Capital, which focuses on pre-seed and seed-stage funding rounds. The desire to work in earlier funding stages alongside someone he knew well drew him away from his role as a partner at multi-billion-dollar venture firm DCM, where he was part of the team that invested in Musical.ly, now known as TikTok.
Bling primarily focuses on entrepreneurs looking to raise around $1 million to $3 million who are often early in their careers as founders. Lui said Bling evaluates companies on characteristics that go beyond whether they like the founder or feel that the market looks good. Instead, he said they take a hard look at the available company data, and quickly respond.
“And we send it back to them and say, ‘Okay, this is what's working, what's not working’,” Lui said. “And then create the playbook for them on how to find product market fit and get to like, ‘These are the milestones you actually need to hit’.”
When considering companies, Lui said Bling looks at the founder, the market, the company’s current traction and differentiation while asking the founder the questions they would expect to get at Series A and Series B funding rounds.
“One thing that I really admire about what [Ling’s] built with Bling is the consistency and the processes and playbooks— everything from the way that we evaluate deals to the way that we work with our portfolio companies,” Lui said. “Everything is kind of around playbooks and operationalizing things and also iterating to do those processes better.”
As part of its work to support founders, Bling maintains an extensive product council, which connects tech executives with the founders in Bling’s portfolio. Bling also has created numerous self-serve resources for founders so they can easily tap into the fund’s network and shared knowledge.
“We have a bunch of playbooks that we introduce to companies around how to hire efficiently, how to negotiate with counterparties, how to think about the founding team, business development…We just have these different things that we start to train our entrepreneurs on,” Lui said.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.