It’s a bit too rambling to excerpt and quote meaningfully but I found David Dayen’s analysis of the WGA-SAG/AFRTRA strike at The American Prospect interesting. As I understand his point it’s that reaching out to the federal government to break up Disney, Netflix, and Amazon will bring them to the bargaining table. Why those companies?
The report was intended for the eyes of the Biden administration’s antitrust enforcers. It recommends that Disney, Netflix, and Amazon be prevented from any further consolidation, and investigated for anti-competitive practices in streaming. It was a call from inside the industry to break the industry up. And the administration got the message. That may be the primary reason why the studios are backtracking.
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There are other streaming platforms, but the WGA reasonably predicts that if Disney, Amazon, and Netflix are allowed to continue their practices, those other platforms will wither away or be bought by one of the Big Three, which Wall Street analysts have already begun to demand.
The three walled gardens have essentially recreated the state of the three major networks before the fin-syn era, the WGA explains. That brings us back to the issues in the writers’ and actors’ strikes: low starting salaries, little or no residuals, the inability to move a production from one walled garden to another, no recourse when the Big Three reduce investment, and rising fees for consumers, who are essentially trapped for their entertainment dollar. “Unless antitrust agencies and lawmakers prevent future merger activity by dominant firms and step in to preserve and protect the competitive environment for other streaming services, the future of content is in peril,†the report concludes.
It reminds me of the pre-1948 situation with the Hollywood studios. From Hollywood’s beginnings movie studios had run their own theater chains until the Supreme Court ruled in United States v. Paramount Pictures. That, abetted by the unstoppable rise of television, resulted in the slow motion collapse of the Big Five studios over the next twenty years and the attendant increase in independent theaters and production.
Frankly, I’m skeptical. Disney’s annual sales are around $87 billion; Netflix around $32 billion; Amazon around $538 billion, only about $3 billion of which is streaming services. For Amazon streaming is a loss leader for its other segments. It’s hard for me to see how you justify splitting up Disney, Netflix, and Amazon without splitting up Google ($282 billion) and Apple ($384 billion), each of which in its own way is involved in stream and production, as well.
Quite to the contrary, my gut-level reaction is that the strike is a masterpiece of bad timing the participants will gain little and might lose a lot. Not only is Hollywood in competition with independents, the UK, Canada, and Australia for eyeballs but with China, India, and South Korea as well. There’s lots of content out there and the longer the strike goes on the greater the likelihood that Hollywood as we’ve known it may never return.
I wish the strikers well and don’t begrudge them a bigger slice of the pie but I think the pie may be shrinking.
