SAG Strike and WGA Strike is creating a problem in the entertainment industry. The ongoing strike between WGA,SAG-Aftra and AMPTP over better payment has shut down Hollywood productions. Disney and Sony have already shuffled their whole movie slate due to this.
Why is SAG strike happening
Here is a quick rundown reported from Variety that shows what the SAG members are actually asking for, including what is, per SAG-AFTRA president Fran Drescher, their number one priority in these negotiations.
- Revenue sharing for streaming shows
- Increases to salary minimums
- Getting consent (and money) for AI training using an actor’s likeness
Now among these points the revenue of streaming shows are in a gray area.
Why is revenue sharing for streaming shows is a problem
When a physical purchase for content happens, studios can find out how many DVD and Blu-ray disks have been sold or Video on demand has been purchased for the digital version.
It is easy to calculate what amount of revenue can be shared with actors and writers when a transaction happens. Same cannot be said for the streaming service.
In the streaming service we take a subscription for ‘X’ amount of Dollars and then choose to see hundreds of contents from that streaming service.
This subscription fee that we pay to the streaming service is an indirect fee to watch these contents but not a direct one such as DVD, Bluray or VOD.
In other words, because streaming platforms are still in its infancy, the studios still haven’t figured out how to calculate the payments for residuals.
On the other hand the streaming services are all running on a loss except Netflix who has just started having profits after decades. Streamers like Max (Formerly HBO Max), Disney+, Amazon Prime, Hulu, Peacock, Apple TV+ all are having negative balances.
Streaming platforms are not even making money on top of the lack of metrics to calculate residuals, it’s hard for studios to pay residuals for streaming service produced content.
Then comes the issue of digital piracy.
Digital Piracy And SAG Strike
With all the problems of studios and wga and sag-aftra digital piracy is an unmitigated factor.
If the studios do want to create metrics to calculate how to pay residuals a big factor will be to determine how many hours of content are getting viewed.
Digital piracy of streaming service contents is creating the problem in those cases.
By 2027, there is a projected loss of $113 billion for streaming video providers serving U.S. customers due to content theft, according to a report from research firm Parks Associates.
As we can see the number of digital piracy from streaming services is in the multiple hundred Billions.
It seems studios are losing money before they can even begin. Streaming services are literally handing HD versions of contents to pirates just as the contents release but is that the only reason?
Most of these big streaming services are not available in most countries which makes piracy the only option to view popular contents such as Marvel, Star Wars or DC shows which have fans worldwide.
The moment availability becomes an issue piracy increases. The moment contents are available for free in HD, the subscribers themselves opt out from subscribing to streaming services.
Availability of contents do decrease piracy as we have previously written on. This will also create a new revenue stream world wide.
Crunchyroll recently made itself available to newer countries with modified subscription prices based on those countries. This step was taken to ensure the audience stop pirating anime and watch them the way it should be watched.