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Netflix Ordered To Pay Writers $42M In Residuals

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Netflix’s bad year just got worse.

The Writers Guild of America West informed its members that a third-party arbitrator ruled Netflix must pay 216 film writers a collective $42 million in unpaid residuals. Initially focused on money due to “Bird Box” writer Eric Heisserer, the ruling also includes 139 Netflix films.

The issue goes back to 2016 when the streamer began producing its own films written by WGA members. Netflix’s payments to writers were based on previous deals with the Directors Guild of America and SAG-AFTRA, which allowed residual amounts to be lower than the cost of each film. Netflix hoped that pattern bargaining—a strategy that uses a new agreement as a precedent for future deals—would let them get away with this.

In response, the WGA busted out the Theatrical and Television Basic Agreement, which promises writers are paid when the film is released and then earn residuals informed by how much the distributor makes from licensing the film for streaming or home video. When Netflix is both the producer and distributor, the WGA sets payment rates comparable to licensing fees paid for similar films.

The WGA is seeking the amount of outstanding earnings as well as $13.5 million in interest.

Back in 2017, a new WGA pact increased the residuals streaming services had to pay their writers based on the number of subscribers and episode length—narrowly avoiding a strike.

Netflix sought deals with Hollywood’s unions as it began to establish itself as a serious industry player. The streamer recently reached a tentative deal with SAG-AFTRA. Though specifics aren’t currently known, it follows the union’s historic first deal with Netflix in 2019 that establish labor protections (including residual payments).

The news comes after Netflix promised to cut costs—and did so in a number of layoffs—and rumors spread about changing content strategies at the streamer.

Hollywood labor rights have been a contentious topic in the past few years, with the 2021 IATSE strike making waves by targeting how streaming has changed the industry. Netflix itself is under fire for poor treatment of VFX workers across a number of projects, including “Guillermo del Toro’s Cabinet of Curiosities.” Netflix’s showrunners are also worried about working within limited budgets, and no one seems to have answers for how the streamer’s planned ad tier could change how it pays its creators. And on the corporate level, last year two trans employees filed unfair labor practice charges after Netflix allegedly retaliated over them speaking out about Dave Chappelle’s special.

WGA’s win amidst tumultuous times in the streaming world is just the most recent sign that we’re in the Great Streaming Reckoning—and adds more fuel to the fire that is Netflix’s content disasterKristin Snyder

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