| uoHollywood is on the brink of its first major labor stoppage in 15 years. The contract between the Writers Guild of America and Hollywood studios expires May 1. While these two parties have been in and out of negotiations for the last several weeks, it's hard to find anyone who believes they will reach a deal before the deadline. Inevitable is the word used most often. "We are preparing as if its going to happen," Brittani Nichols, a writer on Abbott Elementary, told me Friday evening. The impact of a strike depends in large part on how long it lasts. Late-night talk shows and soap operas would go off the air right away, while a strike would have little immediate impact on the release of scripted TV or movies. But it does halt development and production right away. So, if it drags on for a while, the stoppage will prevent broadcast networks from producing shows for the fall season — no new Abbott Elementary or NCIS in September. Labor strife in Hollywood may surprise the average TV viewer – or reader. From the outside, the last few years have seemed like a great time to work in TV. Networks are commissioning more shows than at any point in human history, and the amount of money spent to produce each episode of TV is also setting records. This surge in output has created more jobs and allowed many less-experienced writers to sell shows. Yet, just as streaming has fundamentally changed how we watch TV, it's also altered the way TV is made — and how everyone gets paid. Creative people at first welcomed some of the changes. Not knowing how many people watched your show was freeing for writers who'd spent years trying to satisfy ratings-obsessed network executives. Selling out all the rights up front gave them bigger paydays and the certainty of financial success. Netflix treated every show like it was a success. But as the Netflix way became standard practice, people started to see some flaws. Streaming services order fewer episodes per season, preferring an average of about 10 episodes over the broadcast norm of more than 20. That typically means fewer writers work on each show and those that do write earn less money. Writers get paid extra if they are the credited writer on an episode, and the average minimum salary for the writers hasn't climbed commensurate with per-episode budgets. Most shows also don't last as long, as streaming services have tended to see new shows as more effective at luring subscribers. Rare is the show that lasts more than three or four seasons. Broadcast hits like NCIS and Grey's Anatomy have hit season 20. A writer on a hit broadcast show could expect residuals — payments for when a show is rerun — to take care of them between jobs. But residuals in streaming are smaller and don't fully account for a show's success. Streaming services buy out most of the rights up front, which means there is little upside when you produce a big hit. Jason Blum has for years questioned the logic of stripping the filmmakers of participation in the upside. Having skin in the game would force people to be more conscientious about costs. The rush to produce more TV has put a lot of strain on the system. There weren't enough experienced show runners to oversee all the new shows, which meant a lot of people were forced into positions for which they weren't ready. But writers also haven't been allowed to spend as much time on set, which has resulted in them not getting experience that would help them advice in their career. All this means that while people at the very top of the system, like Shonda Rhimes and Mindy Kaling, are doing just fine, the average worker feels they have to do more work for less pay. "If your first job was a streaming job you really had no idea what you were missing out on," Nichols said. "When you get to the mid level, you assumed you would make a career out of this and be stable. But then you get there and you aren't." The writers have sketched out some of their demands and pretty much everyone agrees – even people at the studios – that they deserve to get paid more. But much as writers feel they are getting screwed by streaming services, media companies argue streaming hasn't worked out for them. Every major media company has cut costs in the last year, and most of them have fired staff. This may not be the time to tell shareholders they need to improve terms for writers. Another obstacle is that the Alliance of Motion Picture & Television Producers, which represents the studios, consists of companies with wildly different priorities. Entertainment is not core for Apple Inc. or Amazon.com Inc. They don't want a strike, but they aren't going to be the leaders in resolving the dispute. Nor are they likely to abandon Silicon Valley's resistance to data transparency and release viewership figures. They aren't under the same pressures. Traditional studios would like to avoid a strike because they need new product to keep people watching their TV networks. None of the companies that own live networks wants to lose hours of programming. But they are all under financial pressure due to the collapse of the pay-TV bundle and would love the chance to clean up their books. Studios like Warner Bros. and Universal have signed tons of rich deals with writer-producers. They also spent the pandemic buying up material being written while production was halted. If the strike lasts a couple months, they can use force majeure to cancel deals they no longer want and clean out their development slate. (This is why some folks predict a short strike.) And then there is Netflix Inc., which has a big pipeline of shows ready to go for the next several months. While co-CEO Ted Sarandos was clear that Netflix doesn't want a strike, he also assured investors that he's ready for the worst. "We have a large base of upcoming shows and films from around the world that we could probably serve our members better than most," he said earlier this month. The last writers' strike was resolved in part because another guild – the directors – agreed to a deal that undercut the writers. The DGA could very well do it again. It also helped that media moguls entered the fray. Peter Chernin, then the No. 2 executive at News Corp., was one of the folks who helped broker the peace. There is no obvious candidate this time around. Disney CEO Bob Iger is the unofficial governor of Hollywood, but he is busy restructuring his own company. NBCU CEO Jeff Shell just lost his job. Warner Bros. Discovery CEO David Zaslav is still new to Hollywood. And very few people trust Netflix. There is an argument to be made that a strike is a good thing. The last one transpired at the very inception of online video and ensured studios had to pay writers in this new medium. We're now 15 years into the streaming revolution, and the deal between the guild and the studios needs to adapt to their shared new reality. But the biggest reason to hope a strike will be either averted or brief is that this industry can't afford another prolonged work stoppage. The entertainment business is still recovering from pandemic shutdowns. The movie business is just getting back on its feet and the cost of production is just leveling off after Covid-19 protocols added as much as 20% to budgets. The last strike cost the Los Angeles economy more than $2 billion. Production has since popped up all over the US. People in Atlanta, Chicago, New Orleans, New York and New Mexico would suffer. The group that suffers the most in all of this will be the workers who don't get talked about as much. It will be the writers who just got their first jobs in a room, the caterer who relies on productions and the trucker who drives equipment around. Whether or not the strike happens, there is one thing that is inevitable: a compromise to end it. My colleague Thomas Buckley just returned to Los Angeles after a week at CinemaCon, the annual industry gathering at Caesars Palace in Las Vegas. CinemaCon's primary function is to provide Hollywood studio executives a platform to present their slate of upcoming films to the people who own the world's big screens. The spectacle of A-list celebrities and sizzle gives exhibitors an opportunity to spend a week in a pumped-oxygen parallel universe in which their businesses have vanquished the pandemic and are poised to vanquish streaming, the economics of which John Fithian, the outgoing chief executive officer of the National Association of Theater Owners, declared unsustainable for large-budget motion pictures. (This is ironic considering the current state of his biggest members, but more on that in a moment.) I asked Thomas to provide two reasons to feel good about the movie business, and one reason to be pretty concerned. The good news: The summer slate looks great Christopher Nolan introduced stunning footage from Oppenheimer; a 20-minute clip of the upcoming Mission: Impossible movie was screened to huge fanfare; a Paramount executive emerged from a hole in the ground clouded by billowing green smoke to present The Teenage Mutant Ninja Turtles; and two Warner Bros presidents were clad in matching pink suits and pink ties to showcase the summer's highly-anticipated Barbie before Margot Robbie (Barbie) and Ryan Gosling (Ken) took the stage. The staggering box office hauls of Top Gun: Maverick, Avatar: The Way of Water and The Super Mario Bros. Movie, as well as horror films including Smile, Barbarian and Black Phone, prove audiences will still show up for the right movie. The better news: Every studio (but Netflix) is all-in on theaters Apple and Amazon are each set to spend big on films to be released in cinemas, and every legacy studio emphasized their commitment to theatrical exhibition. David Zaslav, the chief executive officer of Warner Bros. Discovery, worked extra hard to woo theaters owners upset by his predecessor Jason Kilar and his experiments with more streaming-first titles. The bad news: The industry is still shrunken and indebted Things are set to get quieter in the fall, at a time when exhibitors can scarcely afford it. AMC Entertainment, the world's largest theater chain being kept afloat by Reddit users, is burning through its cash reserves. Cineworld Group, the world's second largest chain, is interviewing for new management as it exits its Chapter 11 process. Revenue from ticket sales is also tracking at about a third below pre-pandemic levels, with a full recovery not expected until at least 2024. In a frank address after removing his Ninja Turtles mask, Paramount executive Chris Aronson, who leads the studio's distribution efforts to cinemas, said exhibitors had to face the reality that revenue alone is an imperfect benchmark. Theater attendance in the critical domestic market of the US and Canada has been consistently dropping since a high in 2002 of 1.6 billion tickets. Exhibitors have made up for the shortfall by aggressively raising prices. Fithian's organization made no comment on whether those economics are unsustainable. Tech giants bounce back Almost every major tech company reported earnings this past week, and results were mixed: - Meta Platforms Inc. shares jumped after the company reported a rebound in advertising sales. The company canceled its most famous original series, Jada Pinkett-Smith's Red Table Talk.
- Snap shares sank after the company reported its first-ever quarterly decline in ad sales.
- Amazon fired staff at the same time it reported first-quarter sales of $127.4 billion (and operating income of $4.8 billion).
The No. 1 album in the US is…Morgan Wallen's One Thing at a Time. The album has spent seven consecutive weeks atop the Billboard charts. The popularity of One Thing at a Time demonstrates that music fans have largely moved on from a controversy that not long ago threatened to derail Wallen's career. It's also a reminder that country fans have started to stream. While older country stars are still selling CDs, a newer crop of acts including Wallen and Luke Combs can rival the biggest pop stars on Spotify. Read more from Ashley Carman here. Deals, deals, dealsI am way late to this, but the audiobook for Phil Knight's memoir Shoe Dog is fantastic. Having a trained actor narrate makes all the difference. | 
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