As the Writers Guild of America (WGA) continues its labour dispute with the Alliance of Motion Picture and Television Producers (AMPTP), Regenerative finance (ReFi) and its underlying philosophy provides clues as to how we might prevent future disputes from interrupting our beloved pastime.
If the strike has taught us anything, it's that writers, along with most everyone else involved in the creation of movies and television series, are seen by production studios as a resource to be extracted. The logic of our economic system, once applied, compels these studios to keep extraction costs to a minimum as a way of maximising profits. When that gap becomes large enough, when the perceived inequity becomes so egregious, the only viable means to claw back some of the lost value is strike action.
While this ebb and flow may seem like a healthy process, it paints a rather bleak picture of our economic system. To illustrate, we have a large, ever-increasing pie with an ever-increasing number of mouths to feed. The people in control of the pie server (the studios and streaming companies), however, are playing a zero-sum game. They want as much of the pie for themselves as they can get, without worrying about how much is left for everyone else.
The answer to all your questions is money.
Regenerative economics, in contrast, looks at the pie and says, "How can we not only ensure that there is enough for everyone today, but also that the pie keeps getting bigger day after day?" It's the idea that we're all better off if we get our fair share and contribute to increasing everyone's share. If people act out of their own self-interest, eventually there won't be enough to go around. Dictators rarely survive a shrinking pie. Neither will the studios.
It's the kind of problem ReFi seems destined to address with an equitable and sustainable solution to the allocation of value. But it can't just be a technological solution. There needs to be a fundamental change of philosophy as well. The parties involved must agree to a common vision for the pie.
But first, why are they striking?
It was Don Ohlmeyer who sagely pointed out that the answer to all of our questions could be traced back to the single-most important asset in our current economic system: money. The WGA strike is no exception. Money is at the heart of the three primary issues:
Residuals from streaming revenue
The key point here is that writers for broadcast television series earn significantly more than writers for streaming series. It has to do with the collective bargaining agreement signed in May 2020 which stipulated that the minimum wage would only apply to writers of broadcast television. Writers for streaming series had to negotiate with the streaming platforms directly.
Artificial intelligence (AI)
ChatGPT and the like have shown us what generative AI is capable of, so it isn't a stretch of the imagination to envision AI writing movies and TV series one day. For the studios, this eventuality couldn't come soon enough. AI-driven writing means lower costs, which means more profit. For the writers, however, it's a terrifying prospect. Best to hold it off as long as possible.
Employment rights
The WGA wants assurances that a minimum number of writers will be employed for a minimum amount of time regardless of whether they are being utilised. It also wants its members to get pension and healthcare contributions. Not outrageous asks by any criteria, but clearly more than the AMPTP is willing to concede.
Information asymmetry
Like most big tech companies, the big streaming platforms are closely guarded siloes of information. The only data shared with the public is what's required of public companies. Other data, like viewership numbers for specific shows, remain a complete mystery, much to the chagrin of viewers and writers alike. When a show gets cancelled, for example, we can only guess as to the reasons.
This is a tough environment to operate in as a writer. If you don't know how much a show makes, how are you supposed to get your fair share? And if you're never sure if a show will continue production from one season to the next, how can you feel any sort of job security?
Broadcast television has traditionally been quite different. Companies like Nielsen sprung up to track viewership across networks. This allowed the unions to negotiate in good faith because they were working from the same information. Streaming platforms would do us all a favour by taking the same approach. Because, at the end of the day, I think we can all agree that society is better when movies and TV series are being made.
All that said, if you've watched the first episode of the sixth season of Black Mirror, it's a chilling illustration of why streaming platforms may be unwilling to give an inch. Quantum computing and better artificial intelligence aren't all that far away, relatively speaking. The platforms just have to bide their time in a waiting game the writers and actors are unlikely to win.
ReFi to the rescue?
A common mischaracterisation is that Web3 technologies are, by themselves, going to solve issues like the unfair distribution of value at the heart of the WGA strike. It's as if by their implementation alone, all parties will come to a mutually beneficial agreement and get back to work like nothing happened.
What even the industry experts fail to mention is that the implementation of a technological solution must be preceded by a change in philosophy. For example, technology won't solve our air pollution problems unless we make fundamental changes to the way we live. Only once this philosophical change has taken place can Web3 technologies like blockchain and smart contracts be used to their optimal effect.
ReFi's potential to prevent future impasses between the WGA and AMPTP is grounded in this approach. On one hand, ReFi provides the technological infrastructure to enable information symmetry, fair compensation, and transparent contracts. On the other, its underlying philosophy offers a blueprint for mutually beneficial negotiations.
How might that look?
A ReFi solution to the issue of streaming residuals might look something like this:
- Data sharing - Streaming platforms can link anonymised show data to an underlying blockchain that is visible to all concerned parties
- Residual pooling - The two sides can agree on a sum to be held in a "pool" that is used to cover the residual payments. The pool can be topped up each month according to the data shared by streaming platforms.
- Residual distribution - Smart contracts can be programmed to automatically distribute residuals based on the shared data. The more popular the show, the higher the percentage of the pool gets distributed.
Technologically speaking, it's actually not that complicated. The Web3 technologies that underpin ReFi are more or less designed for this kind of solution. But without the accompanying philosophical change, such a solution would be akin to an airport that gets built but never used.
How we instil enduring philosophical change is the real trick. Regulation is usually part of the answer. Governments could mandate that streaming platforms open up their data siloes to public scrutiny, or that writers (and other people involved in the making of a show) get a guaranteed percentage of revenue.
Beyond regulation, it comes down to incentives. In this case, it means showing the streaming platforms and studios that a more equitable solution for everyone will actually result in a bigger pie. It means eschewing a scarcity mindset in favour of an abundance mindset.
With this kind of thinking in place, ReFi-inspired technological solutions can ensure the system remains equitable, while giving everyone involved the time and space to get back to making great movies and TV series.
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This article represents the opinion of the author and does not necessarily reflect the editorial stance of CARBON Copy.