The five-month-long strike of Hollywood Writers is nearing a happy ending. The Writers Guild of America (WGA) disclosed yesterday that it reached a tentative agreement with the Alliance of Motion Picture and Television Producers (AMPTP) and secured some major wins. A final vote on the proposal is expected between October 2 and October 9.
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The return of writers is expected to kickstart production on late-night TV shows like CBS’s “Late Show with Stephen Colbert.” Additionally, work on scripts for approved seasons of ABC’s “Abbott Elementary” and NBC’s “Law & Order” is set to commence.
Key Writers’ Agreement Provisions
The streaming companies have agreed to provide writers with information on how well shows are actually performing, such as the number of hours customers spend watching the content.
Furthermore, the writers’ union will be sharing in the success of well-performing content. They are eligible for a 50% bonus on fixed domestic and foreign royalties if any movie is watched by over 20% of a streaming service’s domestic subscribers within the first three months.
Importantly, WGA was able to convince AMPTP to hire writers in accordance with the number of episodes in a series. For instance, a six-episode TV show should have at least three writer-producers, and this requirement increases with the number of episodes.
Next, the new deal is anticipated to help writers earn higher foreign royalties by as much as 76% on the basis of the streaming service’s international subscriber base.
Another major development pertains to the use of artificial intelligence (AI) by the studios. Moving forward, studios are expected to be transparent about AI usage and must inform writers if any materials provided to them have been created by AI or contain AI-generated content.
Conclusion
While the agreement is all in favor of the writers, it is expected to pinch the pockets of streaming companies, including Netflix (NFLX), Disney (DIS), Warner Bros. Discovery (WBD), and Paramount Global. These companies have been making efforts to control costs in order to support their bottom lines.
Among the four media stocks, Warner Bros. boasts an Outperform Smart Score of nine on TipRanks. This suggests that WBD stock has the potential to beat the broader market over the long term.
