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Disrupted Paydays: Existential and Material Threats to Hollywood Compensation Practices

Author: Kevin Sanson (Queensland University of Technology)

  • Disrupted Paydays: Existential and Material Threats to Hollywood Compensation Practices

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    Disrupted Paydays: Existential and Material Threats to Hollywood Compensation Practices

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Abstract

This article explores the current crisis in compensation within the U.S. film and television industry as a symptom of deeper structural adjustments. While recent strikes and public outcry highlight growing anxieties among creative workers, the issue extends beyond simple labor-capital conflict. By tracing the historical evolution of pay practices and examining the industry's shifting economic base, the article argues that traditional compensation models are no longer viable. Instead, it calls for a reimagining of how labor, value, and sustainability are understood in the digital era. Compensation emerges not just as an economic concern, but as a key site where outdated norms clash with new industrial realities.

How to Cite:

Sanson, K., (2025) “Disrupted Paydays: Existential and Material Threats to Hollywood Compensation Practices”, Media Industries 12(2): 4. doi: https://doi.org/10.3998/mij.8257

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2025-12-01

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Creative Commons Attribution-NonCommercial-NoDerivs 4.0

Today, the US film and television industry is experiencing its most significant period of disruption, both materially and existentially, since the decline of the Studio System in the 1950s. As new production and distribution practices unsettle established business dynamics, the industry’s workforce is feeling increasingly anxious about the sustainability of their livelihoods and established income streams. The 2023 strikes by the screen actors and writers have been the most visible manifestation of these frustrations, but fears about changes to traditional contractual terms had been bubbling for some time. Variety called Scarlett Johansson’s 2021 lawsuit against the Walt Disney Corp. over her payday for Black Widow “the first shots in an escalating battle over how talent gets paid in the streaming era.”2 The following year, Euphoria star Sydney Sweeney attracted headlines for saying in an interview that she couldn’t afford to take time off because “They don’t pay actors like they used to.”3 During the 2023 strikes, actors and writers of all ranks and levels of success posted to social media images of residual checks made out for pennies or nothing at all. Stories singled out worldwide hits on streaming platforms as the most egregious offenders, paying cast-mates so little on shows like Orange Is the New Black that they had to work part-time jobs just to make ends meet.4 Even after the strike ended, headlines continued to perpetuate a sense of professional doom-and-gloom with claims like “TV Production Decline: ‘A Darwin Sort of Event,’” “Actors Struggle to find Jobs as TV Castings Dry Up,” “Hollywood Crews in Crisis: ‘Everyone’s Just in Panic Mode as Jobs Decline,” “War Is Coming over Hollywood Pay,” and, simply, “How Bad Can It Get for Hollywood?.”5

It is easy, perhaps too easy, in popular discourse to frame these anxieties in reductive Marxist terms, simply treating the crisis in compensation as a class struggle between media moguls and creative laborers. While the social relations of production certainly conceal systems of power in favor of the capital class, industrial conditions equally shape the contours of what norms and practices are even possible.6 Indeed, a core aim in the pages that follow is to keep these economic perspectives in tension with each other, acknowledging the very real need for workers to advocate for improved conditions but reasoning that those efforts need to be done in accordance with the distinct business conditions of the digital era.

In so doing, my intention for media industry studies is to draw a line in the debates about precarious livelihoods and deteriorating working conditions, arguing that the industrial transformations over the last decade have been so significant that we need to reimagine an entirely different framework for understanding the relationship among labor, value creation, and sustainability in creative production. Obviously, this goal exceeds the scope of a single article, so the focus on compensation offers a productive heuristic to demonstrate how such “common sense” industry practices become particularly vexed flash points in the context of broader structural upheaval. A focus on compensation reveals how entrenched assumptions about financial risk and reward are destabilized when legacy business models no longer align with the economic realities of digital distribution, audience fragmentation, and volatile revenue streams. In this sense, compensation becomes not only a site of economic negotiation or exploitation but also an existential battleground where the incompatibility between established norms and future uncertainties is made visible and thus ripe for rethinking.

Accordingly, I argue the current crisis in compensation is not simply a sign of surplus value extraction but an incredibly acute manifestation of much more fundamental disruptions to the mass media logics of the film and television industry. In so doing, I demonstrate how existing compensation practices are no longer fit for purpose and require a much more thorough reimagining to accommodate streaming era dynamics. In the sections that follow, I first establish compensation as a historically contingent business practice that functions as an extension of dominant industrial structures and conditions, drawing on the work of early industry historians to build an analysis of how present-day norms became established in the first place. I then turn my attention to the industry’s financial performance in the 1990s, 2000s, and early 2010s, framing this period as a moment of accelerated growth and wealth generation that inflated the earning potential for many actors and writers. Finally, I detail the gradual undoing of the industry’s economic base to illustrate how present conditions are unlikely to sustain similar levels of success, underscoring the need to fundamentally reimagine the performance expectations of a much leaner film and television industry and what that might mean for the individuals who depend on Hollywood for their livelihoods.

For the purposes of this discussion, I am singularly interested in how individuals are paid for the work they do in the production of film and television, and in what ways an evolving media ecosystem shapes and challenges such practices. In doing so, I am drawing a distinction between remuneration and compensation. I take remuneration to mean the overall package of financial and complementary benefits–like wages, performance bonuses, travel perks, and contributions to healthcare and pensions–given to creative labor as part of their employment by a given production company. Compensation, however, is concerned with the money workers receive in exchange for their labor inputs into an individual movie or television series. While remuneration is incredibly important in contexts like the United States where private healthcare dominates, compensation is the primary focus of this analysis as it is most directly bound up (for now) in the reorganization of the industry’s approach to production and distribution.

Labor, Compensation, and Industrial (Re)Organization

In one of the few (now dated) publications to take up questions of compensation directly, Alan Paul and Archie Kleingartner outline what they describe as a three-tier compensation system for film and television workers that consists of minimum pay rates (or wages), a framework for negotiating individual premiums beyond wages, and a system for “supplemental payments” (or residuals).7 In Hollywood, wages are the most straightforward form of compensation, although even they, too, are subject to variable shades of complexity. Minimum rates are dependent upon the nature of the work undertaken, the duration of employment, and the type of project (e.g., medium, length, and budget). Writers may earn guaranteed minimums based on the duration of employment and “piece rates” for specific outputs (e.g., a treatment, first draft, rewrite, or polish). Still, wages are far from “fixed.” While collective bargaining agreements guarantee a minimum basic rate (or “scale”), individual directors, writers, onscreen talent, and even highly decorated craft workers can secure additional “premiums” beyond scale payments.

Unlike wages, contingent compensation–profit participation or the “backend deal”–is not guaranteed but dependent upon meeting certain performance criteria in the marketplace. This compensation is typically a percentage of a project’s revenue as determined by contractual definitions of “net” and “gross” revenue. It’s common for studios to offer individuals contractual entitlements to net profits, especially directors and writers, but the reality is that these sorts of entitlements rarely come to fruition. An entitlement to a share of gross profit is a much more certain source of income generation. As such, it’s a much rarer achievement reserved for the very few individuals with exceptional star power who can negotiate a share of gross receipts.

Residuals also have a history but are a much more recent phenomenon, only becoming commonplace in the film and television industry from the 1960s. Residuals are payments individuals receive for the reuse of material beyond its initial exhibition (either a percentage of a base rate or revenue from each new market). As such, they are a common point of contention between employers and labor whenever new technologies or markets emerge, and thus, they have been central to nearly every talent strike in the industry’s history. Studios pay these obligations to the relevant guilds, who then disburse the entitlements to individual members on a pro-rata basis depending on the duties they performed or credits they received. Residuals are the direct result of industrial action and concerns about employment stability, earning potential, and new distribution technologies. Furthermore, like wages, residuals have been a far more certain form of compensation and accessible to a much larger number of workers than contingent compensation. They are subject to rigid union oversight, with entire administrative divisions within the guilds responsible for tracking and distributing residual income to members.

The norms Paul and Kleingartner outline have been in place now for more than 70 years. They have evolved over time but not in a way that fundamentally reconfigures how they have functioned since they first emerged. Yet, today, the industry faces a moment of substantial structural disruption as a consequence of increased competition from global entertainment providers and different entertainment formats, like games and social media, as well as the different business norms associated with subscription video-on-demand services. These changes pose quite significant challenges to existing income sources and likely require radically different solutions to how laborers are rewarded for their work. Such an understanding is neither a neoclassical defense of the marketplace and its business cycles (i.e., “it’s just a downturn!”), nor is it a reductive elision of the power dynamics that shape the social relations of production (i.e., “it’s just business!”). Rather, my aim is to make explicit how compensation practices always have been the negotiated outcome of particular historical conditions and mutual institutional, social, and technological influences. This context sets the stage to better understand how the emerging realities of the streaming era equally require a set of compensation practices that function according to present-day logics.

Market Domination and Guaranteed Wages

During Studio System, term employment and wage labor reflected the industry’s integrated structure and relative market stability. At the time, the industry exercised near total control over production, distribution, and theatrical exhibition. They faced little financial exposure in the marketplace and accrued significant revenue by controlling the price of admission and access to screen content. The mode of production reinforced the industry’s control by centralizing decision-making power within a managerial class of executives and streamlining production into highly regimented and standardized tasks. Efforts to rationalize extended to employment relations and compensation. A large labor pool internal to each firm enabled studio producers to plan, manage, and control the execution of production more effectively, while a specialized division of labor helped improve the speed, efficiency, and quality of that execution.8 Such conditions helped studios control salary expenses by giving managers greater discretion over the scope and scale of labor inputs into an individual production, including the attribution of different income scales to specific roles or “tasks.”

Of course, not all elements of this structure were fully rationalized tools of management. The star system represented a slight departure from the overt control studios exercised over other (arguably more interchangeable) labor power. Stars helped fuel a significant publicity machine, drum up interest at the box office, and differentiate products in the marketplace. As a result of this dynamic, studios attributed a specific financial value to individual stars who, at the height of their fame, reaped quite significant sums for their employers.9 Only in the rarest instance, however, did studios share any of that profit with the talent they employed. Instead, drawing on their deep financial reserves, they internalized labor costs, thereby providing writers, directors, actors, and crew with term employment and a stable (often, quite lucrative) income while securing studios direct oversight and control of their expenses.

My point here is not to dismiss the well-documented ills of the studio contract system, rather only to emphasize that term employment and wage labor were logical outcomes of the industrial conditions of the time and distinct from their attendant social formation. Like how Janet Staiger contextualizes the function of the Studio System’s reliance on the continuity script, term employment and wage labor were “external manifestation[s] of a more fundamental structure inextricable from modern business.”10 The employment relationship not only aligned with broader, contemporaneous capitalist tendencies but also negotiated the particular demands of mass production at the time, offering studios a more cost-effective and reliable approach to manage the labor necessary for increased production activity and narrative complexity.

Regulation and the Reconfiguration of Risk

The demise of the Studio System in the 1950s radically transformed the social relations of production and, in so doing, recalibrated the balance of risk and reward among studios and their workforce. Forced by federal antitrust efforts to divest from their theater chains at a time of broader economic turmoil, the studios sought to downsize by significantly cutting production output and selling physical assets, like studio space. The biggest target for cost savings, however, was the studios’ labor force. Wage increases had outpaced postwar inflation, jumping more than 50 percent between 1945 and 1948 despite a decline in the overall number of studio employees.11 In response to these challenges, the studios started releasing talent from their employment contracts, thereby externalizing the workforce into a freelance labor market.

Fewer productions made it more difficult for the studios to absorb potential losses across a large slate of feature films, especially in the absence of any theater assets, increasing the potential impact of any single failure in the market. By retaining (and, over time, expanding) their control over financing, distribution, and marketing, however, they could leverage competition for market access among specialized service providers, which now included the workforce, to maintain costs and extract added value from the variable inputs into a given production.12 The reliance on stars as a point of distinction and mechanism to mitigate financial risk accelerated, making their participation an essential ingredient in securing financial guarantees and distribution commitments from the major studios. For talent, however, the shift to an independent labor market ended the guaranteed wage they earned as part of the studios’ regular payroll. Decline in studio output meant less regular work, more competition for jobs, and longer stretches of unemployment.

Again, compensation evolved to address shifting industrial conditions. In the immediate post-studio era, the emergence of contingent compensation or profit-sharing contracts helped reformulate payment practices in response to the distinct risk scenario talent, along with the studios, now faced. In this context, talent increasingly acted on their ability to underwrite a firm’s risk in the marketplace (at least in the eyes of investors) and on what they perceived as the differential value their participation added to a project. One of the most efficient ways for them to monetize that differential value was through some entitlement to the film’s success.13 Indeed, the increased risk they also faced as (newly) non-salaried freelance workers–a failure at the box office undermined both future work opportunities and their presumed differential value–structurally aligned their interests with the studios, entitling them to participate in some of the rewards considering the burden of risk they now shared with their employers.

Meanwhile, for studios, enlisting highly paid creative talent was, paradoxically, both a means to mitigate risk and a significant financial liability given the uncertainty of the marketplace. Turning a high upfront cost–someone’s salary–into a variable cost–a share of the profits–incentivizes risk-adverse executives to pursue profit-sharing contracts to shield studios from potential losses. Furthermore, it’s also an act of self-preservation in the context of corporate management cultures that became increasingly commonplace in Hollywood as film studios transformed into increasingly complex public conglomerates in the 1980s and 1990s. As often is the case, an individual executive’s own stock options and incentive plans depend upon their ability to align organizational interests with shareholder value, so contingent compensation offers some safeguards against irrevocable sunk costs and poor corporate performance.14

Multiplying Markets and Reuse

Contingent compensation remains out of reach for everyone but the most elite creative talent. The rise of television, however, impacted a far larger number of workers. While movie studios eventually gravitated toward the nascent medium as a new market to exploit their film archives, screen talent, especially actors and writers, remained much less enthusiastic, at least initially.15 They understood the repurposing of film content as a replacement for new productions and thus a likely threat to future paid work (which they now needed given they no longer enjoyed a guaranteed wage). Screen actors also worried that recycling old content would undermine their differential value by diminishing audience interest in their image or tarnishing their reputations by association with the “less respectable” new medium. Producers argued that they already had paid actors and writers once for their labor: why pay them again?

Following a period of significant industrial action in the 1950s and 1960s, the studios and labor agreed on a new(ish) form of compensation to address the vexed debate about reuse: residuals. Already common in radio at the time, residual payments helped alleviate concerns about diminished opportunities for future employment by enabling talent to earn income whenever their material appeared in new markets. For studios and labor organizations, residuals provided a (relatively) transparent formula to distribute monies owed to talent by tracking the reuse of individual titles across different markets and media platforms.16 The emergence and subsequent struggles over residual payments also underscore the critical role organized labor has played in shaping the conditions of work, especially in response to new distribution technologies, at significant inflection points in the industry’s history.17

The normalization of profit participation and introduction of residuals in relatively rapid succession shaped the context for change over the next few decades. As distinct compensation practices, they underscore the bifurcated conditions that shape, respectively, the privileges of the more exclusive ranks of creative labor and the broader protections geared toward the rank-and-file. According to estimates, residuals from successful shows can account for anywhere between 25 and 40 percent of an individual’s annual salary and continue to pay out over decades for content that remains in circulation.18 They also contribute to the pension funds for below-the-line crew members and technicians.

Accordingly, residuals created an additional, and increasingly important, battleground for all labor groups. As future home entertainment technologies, like pay television, VHS, DVD, and the internet, created new markets, studios continued to increase their sources of revenue from reuse and unions fought–and often went on strike–to update the residual formula to accommodate the ways in which those markets functioned. The studio’s ability to structure access and maximize returns from individual titles through a sequential release strategy (i.e., windowing) across multiplying markets, both domestically and internationally, established a mutually beneficial, though not uncontested, mechanism for firms to increase corporate revenue and talent to supplement their wages with a passive income stream. For as long as an individual title remained in circulation across time, geography, and different distribution technologies, the studios are obligated to compensate talent for the right to repurpose that content in distinct and differentiated revenue-generating opportunities in line with the terms of their collective bargaining agreements.

First the Boom, then the Bust

The key structuring conditions in the late 20th century were not only the proliferation of new distribution technologies but also the frenetic growth strategy pursued by the dominant entertainment firms in the United States. As Andrew DeWaard and others have outlined, the rush of institutional investments, venture capital, private equity, and financial engineering from the 1970s onward not only justified the wave of mergers and acquisitions that characterized the 1980s and 1990s but also fundamentally transformed the logics by which corporate decision-making operated.19 Media and entertainment transformed into “investor-grade” businesses, privileging aggressive growth strategies that maximized earning potential and shareholder value. As a result, once-distinct US media industries morphed into much larger, multifaceted global media empires through a series of mergers and acquisitions that consolidated holdings across film production, broadcast television, cable, recorded music, publishing, news, theme parks, and consumer products into six companies: News Corp. (20th Century Fox), Sony (Columbia), General Electric (Universal), Viacom (Paramount), the Walt Disney Company, and Time Warner. Ultimately, these companies would come to control every major film studio and broadcast network alongside a roster of coveted cable channels, pulling in more than 85 percent of all global film revenues and supplying 80 percent of domestic primetime TV programming by the early 2000s.20

The transformation meant slightly different things for a company’s film and television holdings. The growth of home video entertainment (which was generating twice as much revenue as the box office by the end of the 1980s) and the international market (which outpaced domestic sales by the mid-1990s) facilitated extraordinary earnings with little additional cost, resulting in record profits.21 Still, success at the domestic box office remained a critical precursor to how well individual titles performed across ancillary and secondary markets. The dynamic raised the economic stakes for everyone involved. Studios invested heavily in marketing and advertising to ensure strong turnout for the opening weekend, especially as simultaneous worldwide releases became the norm and immediate success impacted earning potential across subsequent markets.22 Top acting, directing, and writing talent found themselves in even more powerful positions than in previous decades. Action stars and comedians were considered essential to attract global audiences and drive home entertainment sales, reinforcing their role in assuring foreign distributors and financiers about the potential for commercial success. The global box office continued to earn record-breaking revenue throughout the 1990s and 2000s, reaching an all-time high in 2019 despite declines in the domestic market.23

High concept features with bankable stars proved mutually beneficial: “Successful films that spawn franchises uniquely allow star talent to exploit the monopoly power they hold over their images and performances – they (and the studios) also recognize that successful franchises often spawn lower-risk sequels.”24 Sylvester Stallone, Arnold Schwarzenegger, Mel Gibson, Bruce Willis, Adam Sandler, Jim Carrey, and others joined what the trades termed the “$25 million Club” in reference to their extravagant upfront fees, which, alongside increasingly powerful talent agencies, facilitated more complex profit participation deals across first, secondary, and ancillary markets. Such deals not only acknowledged the incredible market power certain stars, especially white male action heroes, exercised with their images but also helped curb growing concerns over wage inflation and reduce studios’ financial liabilities.25

In television, the ownership of broadcast networks in large urban markets reaped significant sums from advertising rates for their parent companies, but the rapid uptake of cable television in American households facilitated extraordinary growth. By the end of the 1980s, cable revenues had increased sixfold, including a 10 percent increase in advertising rates, as sports channels, entertainment programming, and cable news attracted more and more subscribers.26 More than half of US households subscribed to cable by 1990; penetration rates reached nearly 70 percent by 2000 and approximately 90 percent by the mid-2000s.27 Furthermore, common ownership (and deregulation through the fading of the Financial Interest and Syndication rules) incentivized networks to produce more of their own series across their broadcast and cable holdings. As Amanda Lotz notes, self-production

allow[ed] the conglomerate the opportunity for immediate revenue from production expenditures – in the form of advertising revenue – as well as the later revenue available from syndication, increasing the incentive for incremental spending that is perceived as the difference between success and failure – though this can never be known with any certainty.28

In other words, common ownership contributed to escalating production costs–an episode of an hour-long broadcast show cost approximately $1.2 million in the late 1990s but jumped to $3 million by the mid-2000s–as negotiations for increased incremental spending proved much easier and more efficient within the same company.

By the early to mid-2000s, broadcast television continued to enjoy record-setting syndication deals for episodic series, like Law & Order, while the emergence of more serialized fare, like Alias, found success through DVD sales.29 Additional broadcast networks and cable channels during the multichannel transition made possible by digitalization expanded programming real estate and fueled an accelerated production cycle with the number of scripted series increasing year after year from 2002 (182 scripted series) to 2023 (663 scripted series), leading to repeated claims about “Peak TV” throughout the 2010s (even before streaming platforms added original titles to those calculations).30 Original productions for cable attracted attention for defying network-era creative practices, like shorter episode orders, complex characters, and heightened seriality, although they never commanded audiences on the same scale as their counterparts on broadcast. Still, the control of cable networks was incredibly good business for media conglomerates. It not only returned the most profits (about two-thirds, according to one estimate) of any component within the conglomerates’ diversified holdings but also made for one of the most profitable businesses of any economic sector in the United States.31 This dynamic not only accelerated corporate revenue and production investments but also helped sustain a growing number of earning opportunities for creative workers. Even high caliber acting talent gravitated to the medium as a creative counterpoint to franchise filmmaking and earned handsomely to help networks cut through a cluttered landscape when launching news shows. According to one cable executive, “If there’s someone [networks] want or there’s something they feel like they need to have, they’re just going to pay whatever it takes.”32 Results for writers were more mixed. “Peak TV” created more opportunities for more writers to tell more diverse stories, but shorter seasons and a shrinking syndication market–an early consequence of cable’s turn to original programming–sparked concerns about their long-term earning potential.33

Consolidation and conglomeration, fueled by deregulation, created a moment in which there were more television productions being made, higher budgets being invested into film and television, and robust syndication and home entertainment businesses, both domestically and internationally. In retrospect, however, the momentum generated in this period appears short-lived and increasingly unsustainable as new technologies, abundant content, and growing competition have undermined the industry’s global positioning and eroded the value of once lucrative markets. Media firms are still making money (largely from other aspects of their businesses, like theme parks) but nowhere near as much as they did 10 or 20 years ago. According to financial analysis by Bloomberg, film and television profits have collapsed more than 60 percent over the past decade.34 More broadly, the US share of international audio-visual trade fell from around 50 percent of total exports in 2010 to less than one-third by 2021.35 They no longer enjoy the same command over audience attention, advertising dollars, and international trade given the fragmentation of attention across social media, video games, and streaming platforms. Under pressure from Wall Street to demonstrate continued growth, they have turned to layoffs, budget cuts, and countless other measures to appease investors. While the power dynamics at play here make it a stretch to see these global media empires and their highly paid executives in a sympathetic light, the economic dynamics are real and pose formidable challenges to established norms in the industry.

Several factors contributed to the industry’s shift in global positioning. Home entertainment revenue, specifically DVD sales, has dropped by more than 86 percent since 2008.36 Cable television–by far the most valuable asset–was more resilient. While fears about cord-cutting have been circulating since 2010, pay-television’s penetration rate hit an all-time high in 2011 (90.7 percent) before declining, slowly at first from 2013, then much more rapidly from 2017. Its penetration rate is expected to drop to 38 percent by 2027 alongside a $30 billion decline in revenue.37 Following the pandemic, the box office has failed to return to its record-setting revenue levels. It is projected to drop 20 percent globally and 30 percent domestically in 2024 when compared to the average of the last three years before the pandemic (2017–2019).38

Even before the decline in home entertainment sales, the advent of cord cutting, and pandemic-related work stoppages, upstart broadcast networks, digital video recorders, and new home video technologies contributed to the fragmentation of audiences and forced the adjustment of standard industry practices. The early enthusiasm for distributing content on the web proved a source of consternation for labor organizations, whose existing agreements with the studios struggled to keep pace with increasingly novel modes of access and delivery.39 These tensions erupted into industrial action in 2007/2008 by the Writers Guild of America. This time, the focus was on adjusting compensation norms to accommodate the potential financial success of internet distribution and digital downloads as well as updating collective agreements to acknowledge the labor expended on producing content for webisodes and social media, what Curtin, Jennifer Holt, and Sanson have previously called the “second shift of the digital era, putting extra demands on the time and energy of creative talent without offering additional compensation.”40 But these deals couldn’t envision at that time a much more fundamental shift in the industry’s business practices associated with the emergence and subsequent popularity of global streaming services.

Collectively, these developments gradually undid the foundation upon which these media corporations secured their global fortunes and resolved the pressure for continued growth. No longer able to engineer a form of scarcity across markets that maximized revenue through price discrimination and sequential access, they have struggled to identify how to effectively value their content in the context of anytime, anywhere access and on-demand library catalogs. Initially, the industry turned to feverish and speculative investments in the financial promises of streaming video platforms. Yet, these services operate under fundamentally different logics than any of the mass media technologies that preceded them.41 By selling subscription access to a library of content, streaming platforms are incentivized to maintain an iterative and diverse collection of titles that engages the highly differentiated needs of its subscribers. The value proposition for consumers to justify the cost of ongoing subscription fees is more idiosyncratic and immediate than a choice between the films on offer at the multiplex on a Saturday night or the television shows broadcast at 8 pm on a Wednesday.

In other words, the logics of subscription-based library access privilege a bundle of diverse content options designed to retain subscribers over time rather than the large-scale and instantaneous success of a single title that aggregates distinct revenue streams across different markets. Established metrics for success–box-office receipts, television ratings, syndication sales, or digital downloads–reflect the logics of a mass media marketplace that no longer exists, what was once characterized by less consumer choice and greater corporate control over the terms of consumption. Accordingly, attributing discrete value to individual titles is a much more diffuse exercise in the context of subscription-based library access: even the most “popular” titles lack any resale value given the current practice of exclusive and perpetual licensing arrangements.

These transformations pose significant challenges to established payment practices. The streaming era norm, for example, of paying talent higher upfront fees (i.e., “premiums”) in lieu of any contingent entitlements reflects the inability of subscription-based platforms to generate title-specific revenue from direct-to-consumer sales (e.g., box-office tickets) or resale value in additional markets (e.g., home video or syndication). Now that market competition has somewhat subsided, alongside less-than-expected market growth and persistent pressure from labor groups, streaming platforms are slowly reconsidering their approach to compensation. Netflix, for example, is reportedly considering a move away from premium payments, especially for film, to reduce high sunk costs and alleviate financial debts, introducing a bonus system based on how many “views” a title receives within a given time frame.42 In fact, this approach has been enshrined as part of a revised residual formula in the recent collective bargaining agreements that ended the 2023 strikes. Yet, the business imperatives of subscription-based streaming platforms make an odd bedfellow for payment practices designed for an industry operating under very different conditions.

By design, residual payments and contingent compensation draw on mass media logics to redistribute corporate revenue to labor. Residual payments assume US media productions will continue to dominate international trade and persist in circulation across discrete markets for decades, while contingent compensation helps align interests between management and labor in the context of incredible market uncertainty but potentially high rewards. Currently, streaming platforms do not actively engage in resell, and the usefulness of “views” as a metric becomes highly questionable in a context where popularity shares only a loose correlation to financial value. Similarly, these circumstances alter the relationship to risk and reward. While the costs of producing content have not changed (and arguably have been inflated by the ongoing competition for subscribers), subscription fees provide a much lower and singular revenue base to support an entire library compared to the traditional ways of subsidizing the high sunk costs invested into individual film and television titles, like windowing strategies, resale, global trade, and cable bundles. It’s hard to fathom how much longer streaming platforms, especially native platforms like Netflix, can sustain production costs without additional revenue. The recent introduction of advertiser-supported tiers on some subscription-based platforms is likely intended to address this challenge. For workers, suddenly, it seems, the industrial norms that once sustained a set of idiosyncratic compensation practices face unprecedented scrutiny about their effectiveness, or simply no longer apply.

Post-Growth Disruption in Dollars and Cents

The actual impact on individual livelihoods is hard to quantify. Piecing together the available data (adjusted for inflation) about film and television writers, for example, cumulative salary earnings increased from $1 billion in 1995 to $1.5 billion in 2021. Yet, the number of writers who reported earnings over that same period also increased by more than 50 percent, which undermines any material advantages to the average writer from the spending increase. Indeed, both the median and average annual salaries for television writers have remained incredibly stable. In 2001, the median salary was $108,000, and in 2014, it was $138,000, whereas the average salary was $177,000 in 1995 and $229,000 in 2021. The story is different for film writers: in 2001, the median annual salary was roughly the same as that for television writers at $105,000 but had dropped to $77,000 by 2014. The average annual salary for a film writer also has dropped from $324,000 in 1995 to $205,000 in 2021.43

Total residual payouts to Writers Guild of America (WGA) members paint a more reassuring picture. Between 2011 and 2021, total residual income increased by 48.2 percent, from $333 million to $493.6 million, an all-time high, with streaming services now accounting for 45 percent of that total. The additional residual income from streaming services also has offset the losses from other categories, like domestic syndication (−18.1 percent), basic cable (−40.8 percent), foreign sales (−14.8 percent), and home video (−71.0 percent), to account for a 30.0 percent net increase and 28.1 percent net increase, respectively, to television and theatrical residual income totals between 2015 and 2021.44

While film writers had been earning six- to seven-figure sums for film scripts since the 1980s, they likely ceded ground to their television counterparts over this more recent period because of the studios’ focus on pre-existing intellectual property and reduced theatrical output. The accelerated television production cycle in the early 2000s not only offered creative alternatives to broadcast television and franchise film adaptation but also provided more earning opportunities–at least in the aggregate–for those lucky enough to engage with work. Indeed, the conclusions we can draw from these figures are somewhat paradoxical.

On the one hand, the data suggests a level of collective stability for the profession. Putting aside increases in the cost of living, wages for television writers have remained incredibly stable, and even though film earnings have declined, average annual earnings for both film and television writers would facilitate comfortable livelihoods. On the other hand, however, the data tells us little, if anything, about the sustainability of individual careers. The figures provide no way of knowing whether the writers who report earnings year-to-year are a moderately static group or (more likely) consist of a more dynamic and fluctuating group of earners that experience significant churn because of the temporary, short-term employment relationship characteristic of the industry. These figures also do not calculate the impact of non-earning guild members (i.e., those without any work or wages to report) on annual median or average salaries. Similarly, it’s difficult to discern whether the increased earnings from residuals translate into meaningful income on a per-title basis or simply reflect the combination of increased television output and the uptick in licensing deals generated by the emergence of streaming platforms hungry for library content. It’s also critical to qualify the “Peak TV” discourse, which only refers to the total number of series produced. The actual number of episodes being produced has declined by 30 percent on broadcast television and 49 percent on cable networks, which would potentially limit the residual earning potential of individual titles when fewer episodes are available for reuse in different markets.45

In other words, there may be a substantial amount of income in circulation today, but it’s unclear how equally it’s attributed to individual titles or distributed among individual stakeholders. This interpretation aligns with arguments made by the WGA and the anecdotes from individual writers that circulated widely throughout the 2023 strike.46 The WGA notes the number of writers working only for minimum rates (i.e., with no additional premium based on experience) has increased more than 30 percent between 2013 and 2023. This shift is especially acute among writer-producers who have experienced a 23 percent decrease in median weekly pay over that same period, with nearly a quarter (up from just 2 percent) now earning only scale rates. Non-producing, often junior, staff writers also are earning less per job because the length of employment has become shorter, noting the industry’s growing preference for series with less episodes that started with cable then accelerated among streaming platforms. There were other complaints around compensation: contracting writers to produce more episodes in shorter amounts of time, employing “mini rooms” that require fewer writing staff for less pay and, again, shorter amounts of time, requesting unpaid rewrites before paying a screenwriter’s full fee, and failing to improve minimum rates to keep pace with costs of living. Writers also wanted an updated residual formula to improve earnings from streaming services given the outsized role they now play compared to legacy outlets in commissioning original content and generating passive income. Additionally, as the Scarlett Johansson case against Disney illustrates, a smaller contingent of high caliber acting and writing talent has had growing concerns about the impact shortened distribution windows and the prioritization of streaming services over theatrical distribution would have on a film’s ability to accrue enough revenue to trigger profit participation payouts.

These concerns make sense. The primary modes of compensation for talent–minimum rates (including premiums), residuals, and (at least for high caliber talent) contingent compensation–are struggling to function as they had in the recent past as employers are experimenting with different creative forms, alternative financing practices, and new distribution platforms. While the available data makes it hard to account for the impact on individual careers, the scale and sources of the industry’s different revenue streams are changing, which does pose consequences for the ways talent is compensated. The fundamental problem at this juncture is not with targeting the mechanisms through which employers look to undercut the earning potential of employees but with failing to address the fundamental adjustments to the economic base of the industry over that same period, which only accelerated as streaming services proliferated and moved more assertively into original productions from 2018. From the late 1990s through the mid-2010s, the amount of work available, the budgets to support projects, the global financial base of the industry, and the speculative cash invested into emergent streaming services make that period look like halcyon days. Asking one agent to reflect on this recent history, they acknowledged,

We never should have been making the money we were making [in the late 1990s and early 2000s]. Right now, my clients are experiencing a significant adjustment in their assumptions [about a “fair” deal]. The hardest part of my job has been trying to reset expectations.47

This shift underscores the urgency of recalibrating both industry and employee expectations to align with the current economic realities. Only by confronting these fundamental changes can sustainable solutions be developed for the future of the industry and those who make their livelihoods from it.

Conclusion: Time for More Radical Solutions

The challenges these changes present for scholars, advocates, and other industry stakeholders are impressive because they signal a likely end to the dominant logics that have defined the industry’s basic performance expectations over the past three decades. It’s inevitable that these transformations extend to how individuals are compensated for their work, especially when the future of the film and television business looks less and less likely to promise the same scale and market proliferation that normalized existing practices. Deals that ended the 2023 strikes proffered claims by the guilds about landmark agreements, especially with respect to a residual formula that includes viewership figures from streaming services for the very first time. It remains to see how well these deals payoff for individual talent over time, and perhaps most critically, how equitably they payoff for writers across different shows, formats, genres, and runtimes. In other words, any “win” claimed by labor may amount to very little material gains when the reward mechanisms are better suited to different conditions. Given the transformations afoot, it is perhaps time to imagine a much more radical solution, one that rejects “what has been done” over the past 70 years to more actively push for a form of reward that better accommodates the logics of a reconfigured industry.

For media industry studies, the broader call here is to exercise caution in who we cast as heroes and villains in our accounts of industrial change and transformation. The power dynamics inherent in any capitalist enterprise demand that we remain mindful of the social relations of production and vigilant against the ever-present tendencies toward extraction and exploitation. At the same time, the adjustments currently unfolding in the media industries–in both the United States and elsewhere–are so dramatic that they are likely to present uncomfortable realities for both management and labor in the years ahead. Our conclusions are potentially much richer if we engage with the industry’s problem without reinforcing binary frameworks or romanticized ideas of creative work, and instead foreground the contradictions, compromises, and creative possibilities that emerge when long-standing industrial logics are unsettled. This also requires a commitment to the imaginative work of rethinking entrenched logics–challenging inherited assumptions about industrial structures, value creation, and labor, and remaining open to alternative futures that are not yet fully visible within the dominant frameworks of industry discourse.

In that vein, a necessary alternative might push to rethink the industry’s boom-and-bust financial imperatives in favor of a more sustainable model of creative production–one that prioritizes long-term viability over short-term gains, values creative labor over greater margins, and resists the lure of growth metrics. Such a model must not only confront the very real limitations on the industry’s growth potential but also abandon the extractive logics that have, for too long, propped up illusions of infinite scalability and obscured the impacts of shifting business conditions. Without this shift, the industry risks cannibalizing the very creative energies on which it depends

For labor, this alternative pathway likely means employment for fewer individuals, but an industry operating according to more sustainable logics should be able to ensure prosperity for those individuals it does employ. In this context, longer-term employment, professional advancement, livable and consistent wages, and artistic possibility are priorities that place direct limitations on the financial and creative capacity of the industry. Labor organizations, rather than resisting these shifts or returning to the past, could help lead the way in shaping an industry that is leaner, fairer, and better prepared for the demands of the 21st century. It might sound like a utopic vision, but history suggests that previous shifts were no less radical departures from established practice. The past should embolden the labor movement not to accept the status quo or even incremental change but to agitate for a fundamental overhaul of the employment relationship itself.

Notes

  1. Kevin Sanson is Professor and Head of the School of Communication at the Queensland University of Technology. He is the author of Mobile Hollywood: Labor and the Geography of Production (UC Press 2024).
  2. Brent Lang, Cynthia Littleton, and Gene Maddaus, “What Scarlett Johansson’s ‘Black Widow’ Legal Battles Means for the Future of Hollywood,” Variety, https://variety.com/2021/film/features/scarlett-johansson-walt-disney-lawsuit-hollywood-future-1235042786/ ⮭
  3. Seija Rankin, “Sydney Sweeney on Fame, Hollywood Fakery and the Pressure of Paying the Bills,” The Hollywood Reporter, July 27, 2022, https://www.hollywoodreporter.com/tv/tv-features/sydney-sweeney-fame-emmys-euphoria-the-white-lotus-1235186681/ ⮭
  4. Michael Schulman, “ ‘Orange Is the New Black’ Signalled the Rot Inside the Streaming Economy,” The New Yorker, July 12, 2023, https://www.newyorker.com/culture/notes-on-hollywood/orange-is-the-new-black-signalled-the-rot-inside-the-streaming-economy ⮭
  5. Low, Elaine, “TV Production Decline: ‘A Darwin Sort of Event,’” The Ankler, 25 March 2024, https://theankler.com/p/tv-production-decline-a-darwin-sort, Andreeva, Nellie, “Actors Struggle to Find Jobs as TV Castings Dry Up,” Deadline, February 21, 2024, https://deadline.com/2024/02/hollywood-contraction-actors-jobs-tv-castings-1235829094/, Huamami, Kaitlyn, “Hollywood Crews in Crisis: ‘Everyone’s Just in Panic Mode as Jobs Decline,” Los Angeles Times, May 28, 2024, https://www.latimes.com/entertainment-arts/business/story/2024-05-28/hollywood-crew-unemployed-fewer-jobs-la-production-decline; Matt Belloni, “A War Is Coming over Hollywood Pay.” The Town with Matthew Belloni. Podcast. May 21, 2024; Harris, Mark, “How Bad Can It Get for Hollywood,” New York Times, March 1, 2024, https://www.nytimes.com/2024/03/01/opinion/oscars-hollywood-extinction-event.html. ⮭
  6. For examples of these competing approaches to industrial structures, see Karl Marx, Economic and Philosophic Manuscripts of 1844 (Dover: Mineola, 2007) and Richard Caves, American Industry: Structure, Conduct, Performance, 7th ed. (Prentice Hall, 1992). The author wishes to thank Janet Staiger for the suggestion to keep these perspectives in tension with each other. ⮭
  7. Alan Paul and Archie Kleingartner, “The Transformation of Industrial Relations in the Motion Picture and Television Industries: Talent Sector,” in Under the Stars: Essay on Labor Relations in Arts and Entertainment, ed. Lois Gray and Ronald Seeber (Cornell University Press, 1996), 162–3. ⮭
  8. Janet Staiger, “Dividing Labor for Production Control: Thomas Ince and the Rise of the Studio System,” Cinema Journal 18, no. 2 (Spring 1979). See also, David Bordwell, Janet Staiger, and Kristin Thompson, The Classical Hollywood Cinema: Film Style and Mode of Production to 1960 (Columbia University Press, 1985). ⮭
  9. Tino Balio, Grand Design: Hollywood as a Modern Business Enterprise, 1930–1939 (UC Press, 1993). ⮭
  10. Janet Staiger, “Dividing Labor for Production Control,” 23. See also, Janet Staiger, “ ‘Tame’ Authors and the Corporate Laboratory: Stories, Writers, and Scenarios in Hollywood,” Quarterly Review of Film Studies 8, no. 4 (1982): 33–45. ⮭
  11. Thomas, Schatz, Boom and Bust: American Cinema in the 1940s (UC Press, 1997) 333. Emphasis mine. ⮭
  12. Michael Storper and Susan Christopherson, “Flexible Specialization and Regional Industrial Agglomerations: The Case of the US Motion Picture Industry,” Annals of the Association of American Geographers 77, no. 1 (1987). ⮭
  13. Emily Carmen and Philip Drake, “Doing the Deal: Talent Contracts in Hollywood,” in Hollywood and the Law, ed. Paul McDonald, Emily Carmen, Eric Hoyt, and Philip Drake (BFI, 2015): 216–17. ⮭
  14. Weinstein, “Profit-Sharing Contracts.” ⮭
  15. Alan Paul and Archie Kleingartner, “Industrial Relations,” 167. See also, Kate Fortmeuller, Below the Stars: How the Labor of Working Actors and Extras Shapes Media Production, (UofTexas University Press, 2021); Jennifer Porst, Broadcasting Hollywood: The Struggle over Feature Films on Early TV (Rutgers, 2021). ⮭
  16. Notably, residual payments are distinct from royalties. The former is compensation for the right to reuse material, while the latter is income one earns from the exploitation of their intellectual property. So, despite the ease at which these forms of income are confused, residuals only facilitate a subjective sense of authorship given the limited legal entitlements creative labor hold over their work in the US context. See Matt Stahl, “Privilege and Distinction in Production Worlds: Copyright, Collective Bargaining, and Working Conditions in Media Making, in Production Studies: Cultural Studies of Media Industries, ed. Vicki Mayer, Miranda Banks, and John Thornton Caldwell (Routledge, 2009). ⮭
  17. See especially Miranda J. Banks, The Writers: A History of American Screenwriters and Their Guild (Rutgers, 2016), 138–49, Fortmueller, Below the Stars, 88–118; Jennifer Porst, Broadcasting Hollywood, 70–95. ⮭
  18. Jonathan Handel, November 21, 2018. “$2 Billion in Residuals Are Paid Annually – But How Much Gets Lost? The Hollywood Reporter, https://www.hollywoodreporter.com/business/business-news/2-billion-residuals-are-paid-annually-but-how-gets-lost-1162418/ ⮭
  19. Andrew DeWaard, “Financialized Hollywood: Institutional Investment, Venture Capital, and Private Equity in the Film and Television Industry,” JCMS: Journal of Cinema and Media Studies 59, no. 4 (2020): 54–84. See also, Michael Curtin, “Post Americana: Twenty-First Century Media Globalization, Media Industries, 7, no. 1 (2020). See also, Jennifer Holt, Empires of Entertainment: 1980–1996 (Rutgers University Press, 2011). ⮭
  20. Edward J. Epstein. The Big Picture: The New Logic of Money and Power in Hollywood (Random House, 2005). ⮭
  21. Tino Balio, Hollywood in the New Millennium (BFI, 2013); see also, Thomas Schatz, “The Studio System and Conglomerate Hollywood,” in The Contemporary Hollywood Film Industry, ed. Paul McDonald and Janet Wasko (Wiley-Blackwell, 2008). ⮭
  22. Schatz, “The Studio System and Conglomerate Hollywood,” 21. ⮭
  23. Ben Dalton, “Global Box Office Forecast to Drop 5% in 2024 to $31.5bn; North America to Suffer Biggest Hit, China Predicted to Increase Takings,” The Screen Daily, December 19, 2023, https://www.screendaily.com/news/global-box-office-forecast-predicted-to-drop-5-in-2024-to-315bn/5188893.article ⮭
  24. Carmen and Drake, “Doing the Deal,” 219. See also, See also, Schatz, “The Studio System and Conglomerate Hollywood.” ⮭
  25. McDonald, Hollywood Stardom (Wiley, 2012); See also, Schatz, “The Studio System and Conglomerate Hollywood.” ⮭
  26. Holt, Empires of Entertainment. ⮭
  27. Amanda D. Lotz, The Television Will Be Revolutionized, 2nd ed. (New York University Press, 2014), 57. ⮭
  28. Ibid., 101. ⮭
  29. Denise Marti and John Dempsey, “ ‘Sopranos’ Reruns Stir Mob Scene,” Variety, January 9, 2005, https://variety.com/2005/scene/markets-festivals/sopranos-reruns-stir-mob-scene-1117915991/. See also Lotz, TV Revolutionized, 278, n. 58. ⮭
  30. Michael Schneider, “Peak TV Tally,” Variety, January 12, 2023, https://variety.com/2023/tv/news/peak-tv-tally-599-original-scripted-series-aired-2022-1235487593/. The one exception to the year-on-year increase was a COVID-related dip in 2020. ⮭
  31. Doug Shapiro, “One Clear Casualty of the Streaming Wars: Profit,” The Mediator, October 28, 2020, https://dougshapiro.medium.com/one-clear-casualty-of-the-streaming-wars-profit-683304b3055d ⮭
  32. Josef Adalian and maria Elena Fernandez, “The Business of too Much TV,” Vulture, May 2016, https://www.vulture.com/2016/05/peak-tv-business-c-v-r.html. ⮭
  33. Ibid. ⮭
  34. Bloomberg financial data cited in Lucas Shaw, “Film and TV Profits Have Collapsed over the Last Decade,” Bloomberg, June 26, 2023, https://www.bloomberg.com/news/newsletters/2023-06-25/film-and-tv-profits-have-collapsed-over-the-last-decade ⮭
  35. WTO (2023). International Trade Statistics. accessed October 6, 2023, https://stats.wto.org/. ⮭
  36. Sarah Whitten, “The Death of DVD: Why Sales Dropped more than 86 Percent in 13 Years,” CNBC, November 8, 2019, https://www.cnbc.com/2019/11/08/the-death-of-the-dvd-why-sales-dropped-more-than-86percent-in-13-years.html ⮭
  37. Market research from PwC cited in Georg Szalai, “Cord-Cutting to Reduce Pay TV to Just 38 Percent of US Households by 2027, PwC Forecasts,” The Hollywood Reporter, June 18, 2023. https://www.hollywoodreporter.com/business/business-news/cord-cutting-streaming-avod-pwc-report-outlook-2027-1235517286/ ⮭
  38. Ben Dalton, “Global Box Office,” Screen Daily. ⮭
  39. Amanda Lotz, Television Revolutionized. ⮭
  40. Michael Curtin, Jennifer Holt, and Kevin Sanson, Distribution Revolution: Conversations about the Digital Future of Film and Television (UC Press, 2014), 3. ⮭
  41. Amanda D. Lotz, Netflix and Streaming Video: The Business of Subscriber-Funded Video on Demand (Polity, 2022). ⮭
  42. Matt Belloni, “A War Is Coming.” Netflix, for example, currently calculates “views” a total time spent watching a move or season of a TV series, divided by running time. So, if an 8-hour show attracts 80 accumulated hours of viewing within the specified window, that’s 8 “views.” ⮭
  43. These figures exclude income earned from producing and do not consider the impact of non-earning WGA members in the median or average calculations. Dates are based on data availability. For details, see: Gene Maddaus, “Is Writer Pay Up or Down?,” Variety, April 3, 2023, https://variety.com/2023/biz/news/writer-pay-up-or-down-1235559599/; Entertainment Strategy Guy, “WGA Screenwriter Earnings Likely Broke Records in 2022,” July 20, 2023, https://entertainment.substack.com/p/exclusive-wga-screenwriter-earnings; Entertainment Strategy Guy, Debunking 8 Myths about the WGA/AMPTP Negotiations, April 26, 2023, https://entertainmentstrategyguy.com/2023/04/26/entstrategyguy-ruins-everything-debunking-8-myths-about-the-wga-amptp-negotiations/. See also, WGAW, WGAW 2022 Annual Financial Report, 29 June 2022. https://www.wga.org/uploadedfiles/the-guild/annual-report/annualreport22.pdf ⮭
  44. WGAW, WGAW 2022 Annual Financial Report. ⮭
  45. Gavin Bridge, Time to Strike? A Variety Special Report (LA: Variety Intelligence Platform, March 2023). ⮭
  46. WGA, Writers Not Keeping Up, March 14, 2023. https://www.wgacontract2023.org/updates/bulletins/writers-are-not-keeping-up ⮭
  47. Personal Communication, Anonymous Talent Agent, 2023. ⮭

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