With Streaming Platforms Circumventing Residual Payments, 2023 May Be the Year of the Next Writers Strike

Ilana Gordon
Ilana Gordon is an entertainment, culture, and tech writer originally from Connecticut. She currently lives in Los Angeles.
With Streaming Platforms Circumventing Residual Payments, 2023 May Be the Year of the Next Writers Strike
Photo by Liam Edwards on Unsplash

Last week, Warner Bros. Discovery announced plans to rehome 10 of their HBO original series, yanking the titles off the platform and moving them over to third-party FAST (free, ad-supported, streaming television) services. The relocation of these shows – which include premium offerings like Westworld, as well as smaller, cult favorites like Made For Love and Gordita Chronicles – represents a seismic shift in streamer programming etiquette, and an industry-wide pivot towards belt-tightening.


This recommitment to Premium Video On Demand is a foreseeable consequence of the $44 billion merger between HBO Max and Discovery Plus, as Warner Bros. attempts to fold the two platforms into one compact service in 2023, and achieve profitability in their direct-to-consumer segment by 2024. As Variety reported back in August when HBO Max removed 36 of their titles (including original films and 200 episodes of Sesame Street) from the platform, banishing these shows allowed Warner Bros. Discovery to circumvent contracts that require the company to pay residuals and licensing fees to the cast, writers, and crew who created them.

There is some irony in the fact that this new industry trend towards ducking residual payments — compensation creatives receive even after their work on a film or TV show is complete, in exchange for the reuse of their materials — coincides with scheduled contractual negotiations across three of Hollywood’s chief agencies designed to protect creatives. The Writers Guild of America, the Directors Guild of America, and the Screen Actors Guild all have contracts set to expire by June 30, and all three guilds have said they’re looking for increases in streaming residuals and minimum pay rates. The WGA is particularly eager to start negotiations, given that any leverage they might have had during the guild’s last negotiations in 2020 was undercut by COVID-19’s arrival, which limited the possibility of a worker’s strike.

Industry eyes will be especially fixed on negotiations this spring because this is the longest the guild has ever gone without a strike. Almost fifteen years have passed since the 2007/2008 Writers Strike incited a 100-day walkout — which coincided with the beginning of the Great Recession — that lasted until February of 2008. Before that, the longest period between strikes was 12 years, eight months, and 15 days. And as Deadline points out, every writers strike in history has revolved around residuals — including the strike from 2007/2008, when tensions about how writers would be compensated in matters regarding digital media boiled over.

FORGET CONTENT: CASH IS NOW KING

This February marks the 10th anniversary of the release of Netflix’s House of Cards, the streamer’s first commissioned original series, which ushered in an era of platform growth and new possibilities as both viewer and industry perceptions of how people watch content were upended.

Money was of no consequence during the first five years of the streamers’ race to acquire and produce content, and in 2017 the TV show budget hit an all-time high. Now, five years later, these same platforms are dealing with cash flow concerns. 2022 was the first year that Netflix didn’t operate at a loss, but after launching their ad-supported subscription tier, stock prices dropped 9%. Also this fall, Paramount Global’s stock value depreciated by 7%, Roku’s price went down 6.5%, and shares of Disney dropped to their lowest level in almost two years, ahead of the launch of their ad-supported tier, which debuted earlier this month.

It used to be that content was king. Now it would appear that cash has retaken the throne. Streamers are looking for opportunities to save or make money, and they’re prepared to suffer the ire of the people who watch and create their content in pursuit of this goal.

REINVENTING THE STREAMING MARKET

Removing titles from their catalogs is only one prong in streamers’ strategy to reign in corporate spending. In October, Netflix started preparing to crack down on password sharing. A month later, the company launched their ad-supported tier, which restricts some of the site’s key show titles for licensing reasons; the launch also incited a brushup with Japan’s NHK broadcaster during which NHK asked Netflix to remove 22 of their anime titles because the platform’s ad service was incompatible with the broadcaster’s distribution policy. (In a statement provided to The Japan Times, Netflix stated that they removed the ads from the 22 NHK programs.)

In July, Amazon began rolling out improvements to their user interface intended to amplify Prime Video programming. The changes make it easier for viewers to discover content and determine if that content is included in their Prime Video subscription service, and incorporate a new Live TV page that will cover sports and live events (including the NFL’s Thursday Night Football, which Prime Video now streams exclusively).

In the most striking example so far, Warner Bros. Discovery canceled HBO Max’s Batgirl film in August – a movie whose production cost $90 million and had already completed shooting – in exchange for some tax benefits.

A WINTER OF DISCONTENT IS NIGH

“It’s not about how much, it’s about how good,” said David Zaslav, President and CEO of Warner Bros. Discovery during an earnings call last August. “Owning the content that really resonates with people is much more important than just having lots of content.”

Whereas the 2010s marked a time of excessive consumption (see: binge watching, shopping hauls, and social media addiction) the 2020s appear to be taking a more minimalistic approach. Premium TV spending isn’t likely to disappear — Amazon did just spend 1 billion dollars on the first season of The Rings of Power, after all — but the emphasis now will be on curation. The more streamers start limiting what content is available to consumers, the more likely it is that consumers will start to question why they’re subscribing to these services at all. And the more likely these companies are to piss off creatives.

From an industry perspective, targeting residual payments is, as someone described it on Twitter, “pure evil.” Residuals are passive income that has been known to help prop up industry folk during times of financial instability, and title pruning can have serious impacts on the salaries of working creatives. One actor, Lucia Fasano, Tweeted that she received around $1,000 for her work in one episode of HBO Max’s The Deuce. “My SAG-aftra (SIC) contract means I get paid small residuals by mail when people watch it/buy it on HBO. The residuals also contribute to my union dues. That’s why they can pay you so little when you do the job.”

This kind of industry-baiting behavior by streamers seems poised to foment discontent amongst creatives, who are, frankly, already unhappy. Faced with a lugubrious job market, high inflation rates, and dwindling opportunities, a strike like the one undertaken in 2007 isn’t inevitable, but it is in the cards. As 2022 winds down, with concerns about a recession likely to carry over into the New Year, it appears the climate is ripe for yet another evaluation of how streaming services factor into Hollywood’s evolving business model.

OpenAI's $6.6B Power Play: The Future of AI Just Got a Massive Boost 💰🚀
Image Source: Open AI - Sam Altman

🔦 Spotlight

OpenAI is making some exciting moves! The company just completed a massive $6.6 billion funding round, pushing its valuation to an impressive $157 billion. Thrive Capital led the charge, with big names like Andreessen Horowitz and Founders Fund also joining in. This investment will allow OpenAI to further scale its operations and advance AI technologies like GPT-4 across various sectors such as healthcare, entertainment, and business.

But that’s not the only exciting news. OpenAI has also secured an additional$1 billion credit facility, giving the company even more financial flexibility to execute its ambitious growth plans. This safety net ensures that OpenAI has the resources to scale safely and effectively while continuing to lead the AI space.

AI is becoming integral to industries worldwide, and OpenAI’s products—like ChatGPT—are seeing rapid adoption. From education to enterprise solutions, the company is driving significant advancements in how AI is integrated into everyday life.

Following Microsoft’s $10 billion investment earlier this year, this latest round underscores the market’s confidence in OpenAI’s potential. With its strong focus on responsible AI deployment and ethical scaling, the company is set to shape the future of AI in a way that benefits a broad range of industries and addresses global challenges.

As AI evolves, OpenAI remains dedicated to pushing boundaries while ensuring that its innovations prioritize safety, scalability, and social impact. Keep an eye on this space—big things are on the horizon!


🤝 Venture Deals

LA Companies

  • Impulse Space, a Redondo Beach-based company specializing in in-space transportation services, raised $150M in Series B funding led by Founders Fund, bringing its total funding to $225M, to expand its team and advance production of its Helios and Mira vehicles. - learn more
  • Nusano has secured over $115M in Series C financing, led by The Wasatch Group, to accelerate the commercialization of its radioisotope production technology, aimed at improving cancer treatment and medical diagnostics. - learn more
  • Future Trash, a multidisciplinary creative studio, has raised a $5M Seed funding round from TIRTA and General Catalyst to develop original intellectual property (IP) within Fortnite, focusing on building unique in-game content and experiences. - learn more
  • XType, the leading software company for multi-instance management on the ServiceNow platform, has raised a $21M Series A funding round led by Norwest Venture Partners to accelerate innovation and expand its platform capabilities on the ServiceNow platform. - learn more
  • 3Laws Robotics, a robotics company focused on building AI-powered platforms to enhance the safety, security, and operational efficiency of robotic systems, has raised a $4.1M Seed funding round led by TenOneTen Ventures. - learn more

LA Venture Funds
  • Watertower Ventures participated in the $8M Series A funding round for DocJuris, a leader in AI-based contract review and negotiation software that automates key tasks to streamline the contract process for enterprise teams and general counsels. - learn more
  • Progression Fund participated in a $3.7M Seed funding round for Permanent, a company focused on advancing sustainable agriculture by developing solutions that improve soil health and productivity. - learn more


LA Exits

  • Loom, an educational community platform that empowers women by providing comprehensive resources on reproductive health, sexual wellness, and parenting education, has been acquired by women's health brand Perelel, marking a significant expansion in the women's health and wellness sector. - learn more

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⚠️📲🌩️ Your Digital Lifeline: Top Tech Apps for Natural Disasters

Living in LA means being ready for anything—quakes, wildfires, crazy weather, you name it. Luckily, there’s a suite of tech apps designed to keep you informed, connected, and safe when disaster strikes. From real-time alerts to staying in touch with loved ones, these apps have you covered. Here’s the ultimate list to help you handle whatever chaos comes your way in LA County.

Get Real-Time Alerts

Image Source: MyRadar

FEMA App
  • What it does: Provides real-time alerts from the National Weather Service, along with shelter and disaster recovery info.
  • Key features: Weather alerts, shelter locator, and preparedness resources.
  • Available on:iOS | Android
MyRadar Weather Radar
  • What it does: Offers real-time, animated radar for tracking severe weather and storms.
  • Key features: Live radar, storm tracking, and severe weather alerts.
  • Available on:iOS | Android
Clime: NOAA Weather Radar
  • What it does: Delivers real-time radar and weather updates, with wildfire and flood tracking.
  • Key features: Customizable weather alerts, disaster tracking.
  • Available on:iOS | Android
American Red Cross Emergency App
  • What it does: Provides real-time alerts for over 35 types of emergencies, plus disaster preparedness tips.
  • Key features: Alerts, safety check-ins, and emergency tips.
  • Available on:iOS | Android
My Earthquake Alerts & Feed
  • What it does: Sends real-time earthquake alerts, with maps and detailed data.
  • Key features: Earthquake alerts, customizable notifications, detailed maps.
  • Available on:iOS | Android
Citizen
  • What it does: Delivers real-time alerts for emergencies, including natural disasters and crime near your location.
  • Key features: Safety alerts, live incident reports, and community updates.
  • Available on:iOS | Android

Stay Connected with Loved Ones

Image Source: Life360

While social media apps like Facebook and X provide real-time updates, additional tools can help with communication and location sharing, ensuring you stay connected and safe.

Nextdoor
  • What it does: Connects neighbors with real-time local updates on emergencies and community events.
  • Key features: Neighborhood alerts, local info, resource sharing.
  • Available on:iOS | Android
WhatsApp
  • What it does: Enables secure messaging, location sharing, and video/voice calls with family and friends.
  • Key features: End-to-end encryption, location sharing, voice/video calls.
  • Available on:iOS | Android
Zello Walkie Talkie
  • What it does: Turns your phone into a push-to-talk walkie-talkie for communication in low-signal areas.
  • Key features: Push-to-talk, works over Wi-Fi/data, group communication.
  • Available on:iOS | Android
Glympse – Share Your Location
  • What it does: Lets users share real-time locations with family and friends without needing an account.
  • Key features: Location sharing, ETA updates, private tracking.
  • Available on:iOS | Android
Life360
  • What it does: Tracks real-time location of family members and provides emergency SOS alerts.
  • Key features: Family location tracking, emergency alerts, crash detection.
  • Available on:iOS | Android

Stay Mobile

Image Source: PlugShare

For navigating road closures and traffic during disasters, Google Maps and Waze are essential tools that offer real-time updates and alternate routes. Along with these go-to options, there are additional apps that can help you stay mobile when it matters most.

GasBuddy
  • What it does: Locates nearby gas stations and provides real-time updates on fuel availability and prices.
  • Key features: Gas station locator, fuel prices, availability checks.
  • Available on:iOS | Android
PlugShare
  • What it does: Provides a comprehensive map of public EV charging stations worldwide. It offers real-time availability, pricing, user reviews, and photos of charging stations, helping you find the best nearby options.
  • Key features: Real-time station availability, detailed station info, user reviews, and trip planning.
  • Available on:iOS | Android

Traditional Preparedness Tips

In addition to these tech apps, it’s crucial to prepare for natural disasters with traditional methods:

  • Build a disaster kit: Gather essential supplies like food, water, first aid supplies, and a flashlight.
  • Develop an evacuation plan: Determine where you will go and how you will get there in case of an emergency.
  • Keep emergency contacts handy: Make a list of important phone numbers.

Maximize Battery Life and Data During Emergencies

During disasters, power outages and increased network traffic can affect your device's battery life and data usage. Consider the following:

  • Keep your devices charged: Use portable or solar-powered chargers to extend battery life.
  • Conserve data: Use Wi-Fi hotspots when available to avoid excessive data charges.

These apps are your go-to tools for staying informed, connected, and ready for anything in Los Angeles County. Whether you need real-time alerts, navigation assistance, or ways to keep in touch with loved ones, having these apps on hand can make all the difference when it matters most.

Download the dot.LA App

Luxurious Second Home Ownership without the Headache: How Pacaso is Changing the Landscape of Real Estate

🔦 Spotlight

Pacaso addresses the pain points of second home ownership, offering a luxurious, flexible, and financially sound alternative to traditional second homes and ultra-luxury hotels. Co-founded in 2020 by entrepreneur Austin Allison and former Zillow executive and prominent LA tech figure Spencer Rascoff, Pacaso, an unicorn startup, has redefined vacation home ownership with its unique co-ownership model. Rascoff's contributions to the LA tech scene extend beyond real estate; he also founded 75 & Sunny, an LA-based startup studio and venture fund, and co-founded dot.LA, an LA tech news and events company.

LA residents adore Pacaso for its lush vacation destinations that also make for smart investments. Pacaso offers everything from serene weekend getaways in Aspen to sophisticated escapes in Paris. Each residence, valued between $200k to over $2M for 1/8th, boasts meticulous design, high-end furnishings, and premium amenities. Unlike traditional second home ownership, which involves high costs, maintenance, and underutilization, or ultra-luxury hotels, which lack the personal touch and investment potential, Pacaso's co-ownership model offers a superior solution. Co-owners enjoy the benefits of a high-end vacation home without the full financial burden and hassle of sole ownership, making it a smarter and more flexible choice for discerning buyers.


Image Source: Pacaso

Cabo, Mexico

$822,000 (1/8th ownership)

5 bds. l 5 ba. l 4,969 sq ft

View Here


Image Source: Pacaso

Paris, France

$600,000 (1/8th ownership)

2 bds. l 2.5 ba. l 1,410 sq ft

View Here


Image Source: Pacaso

Malibu, California

$750,000 (1/8th ownership)

3 bds. l 3 ba. l 1,880 sq ft

View Here


Image Source: Pacaso

Park City, Utah

$755,000 (1/8th ownership)

4 bds. l 4.5 ba. l 2,584 sq ft

View Here

Head to Pacaso to learn more about its innovative co-ownership model that addresses the common challenges of second home ownership!


🤝 Venture Deals

LA Companies

  • Oak Essentials, the natural skincare brand founded by Jenni Kayne, has raised an undisclosed amount in Series A Funding from Silas Capital and Unilever Ventures. This investment will drive the brand’s expansion, focusing on product development, boosting marketing efforts, and expanding distribution channels. - learn more
  • Playhouse MD, an upcoming children’s healthcare platform that incorporates play to enhance health outcomes, has raised $4M in funding, according to a recent SEC filing. - learn more
  • FluidLogic, a high-performance hydration system provider, raised $15M in a Series A Extension led by Solyco Capital to support product development and innovation for adventure sports and outdoor endurance categories, with consumer products launching in early 2025. - learn more
  • Reflect Orbital, which uses in-space reflectors to direct sunlight to solar farms and large-scale lighting applications after sunset, has raised $6.5M in seed funding led by Sequoia Capital. The funding will help the company develop production vehicles and expand its team as it builds space-based energy infrastructure. - learn more

LA Venture Funds
  • Smash Capital led a €20M Series B round into Vilnius-based Ovoko, an e-commerce platform for buying and selling used car parts across Europe, marking Smash Capital's first investment in Lithuania. The funds will support Ovoko's product development, market expansion, and team growth as it aims to dominate the European market for second-hand automotive components. - learn more
  • M13 led a $9M Series A Funding Round for Zenlytic, the world’s first self-serve business intelligence platform. - learn more



LA Exits

  • Continuum Global Solutions’ healthcare vertical has been acquired by Everise, a customer service management company, enhancing Everise’s capabilities in pharmacy benefit management and expanding its growth prospects in the healthcare sector. - learn more
  • Radical Semiconductor, a company specializing in processing-in-memory technology, has been acquired by BTQ Technologies, a leader in post-quantum cryptography. This acquisition strengthens BTQ’s ability to secure data in the post-quantum era by integrating Radical Semiconductor's advanced technology portfolio. - learn more

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