Striking writers and actors are pressing a few common issues as they seek better contracts from the media companies represented by the Alliance of Motion Picture and Television Producers. One big one: Both unions want more transparency about how many people are watching streaming series and movies and, along with that, a bigger share of streaming revenue via residuals or success-based metrics. That’s a marked change from the earlier days of the streaming boom, when freedom from the bottom-line nature of Nielsen ratings was often seen as a selling point for streaming services over broadcast or cable television outlets.
“Since streaming networks don’t release numbers, it’s fortunately quality over ratings,” showrunner Sam Esmail told The Hollywood Reporter in 2018, as he was launching the series Homecoming for Amazon Prime Video. Coming off season two of Stranger Things, creators Matt and Ross Duffer joked that they had no idea what constitutes a hit, “but Netflix does.”
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Along with putting Nielsen numbers in the rearview mirror, the early years of the streaming era also offered the promise of shows being available indefinitely: The mid-2010s was a peak time for fiercely loved but marginally rated shows being “saved” or revived (think Arrested Development on Netflix, The Mindy Project on Hulu or Community on, uh, Yahoo). Large and growing libraries at Netflix and Hulu also suggested that any number of classic shows would never be more than a couple of clicks away — and, from a business standpoint, that the people who made those shows would continue to get residual checks when streaming users watched them.
The explosion in the number of series — scripted television in the U.S. grew from 288 shows in 2012 to 532 in 2019, driven mostly by streaming — meant work for more writers and actors. That in turn made it easier to look past details such as data transparency (so did bigger up-front paydays, even if it meant getting little to nothing on the backend), as the industry rushed to embrace the streaming model, which also promised freedom from network notes and the grind of making 22 episodes a season under the traditional broadcast model.
A few Cassandras, largely in the media that covers the TV business (myself very much included), wondered how it would be possible to know whether a show was successful on streaming if there was no agreed-upon way to tell how many people watched it. Nielsen was (is?) not up to the task of that type of measurement, and when Netflix opted to make its viewer data a black box, everyone else with any kind of streaming property — from Amazon to The CW — followed suit.
The tide has most definitely turned. As one lawyer who negotiates deals with studios and streamers puts it, creators were focused on money and creative freedom promised by streaming during the 2010s — but in the past few years, slowing subscriber growth and pressure from shareholders to keep posting big quarterly results has ended the spending tear. “We let the wolf into the henhouse, and we lived to regret it,” this attorney says.
With tightening budgets came a wave of reversed series orders and dropped renewals that’s still happening, along with the outright removal of dozens of library titles from streaming services. Those “impairments,” in CFO-speak, allowed companies to write off the costs of producing those shows, but they also upended both the implicit promise to viewers of “whatever, whenever” and cut off residual payments — however tiny they might have been — to anyone who had a stake in all those disappeared shows and movies.
Even as prominent a name as Steven Soderbergh, who has made several projects for Warner Bros. Discovery’s Max streamer, said he only gets “adjectives” — as in, “We feel good about the numbers” — from the company in describing how his work has performed.
“There are two potential reasons that we’re not getting all of the information,” the filmmaker said in an interview with Defector. “One is that they’re all making a lot more money than anybody knows and that they’re willing to tell us. The other is they’re making a lot less money than anybody knows. And they don’t want Wall Street to look under the hood of this thing in any significant way because there’ll be a reckoning that will be quite unpleasant.”
The hoarding of data at the company level has also made it harder to find a cross-platform currency for streaming on which the interested parties can agree. For all the flaws in Nielsen’s ratings system for linear TV, it is at least an agreed-upon mechanism that doesn’t rely on good faith by the companies it measures.
The lack of transparency and any reliable way to objectively measure success in the streaming era has become a point of contention in both of the Hollywood strikes. The AMPTP’s latest counteroffer to writers would release quarterly reports of total viewing time for streaming series to the Writers Guild of America, “to develop proposals to restructure the current SVOD residual regime in the future” — but not, apparently, in the contract writers are trying to win now. Studios and streamers have also outright rejected SAG-AFTRA’s idea to use third-party metrics in a revenue-sharing proposal (though the actors union says it would be more than happy to have the companies open their books instead).
Another lawyer with ties to the industry notes that under the old model for television, actors and writers could participate in the success of a show through adjusted modified gross receipts. They could also use ratings to boost paydays in renegotiations. Now they might not even know whether a series they work on is successful. Meanwhile, backend deals have all but dried up for everyone except the best known creators and stars, and overall deals are seen as the path to security — but there aren’t a lot of those to go around.
As the strikes have continued, and with them calls for more transparency, a narrative has taken hold that says streamers’ unwillingness to share numbers is more about hiding failures than downplaying hits — as Soderbergh implied in his interview — for fear that share prices would plummet if people found out how few eyeballs some titles are attracting.
“This is Hollywood. No one conceals success. Overstating success is a hallmark of our business,” the first attorney tells THR. The most likely explanation for the opacity, he surmises, is that “the data is not good, and the studios are hiding it because revealing it would cause the entire house of cards to crumble.”
The streaming business has come to resemble traditional television more in the past few years, with ad-supported services as the new growth area — such free platforms as Fox’s Tubi, Amazon’s Freevee and Paramount Global’s Pluto TV have seen their usage rise by double-digit percentages during the past year. Studios and streamers also are increasingly seeking broad-appeal stories over those with small but dedicated audiences. It feels like a return to the days of linear television, even as streaming has overtaken both cable and broadcast networks in occupying more of viewers’ time.
But the transparency question lingers: A few striking writers recently have noted on social media that in several countries, including France and Germany, Netflix has signed agreements (in line with a directive from the European Union) that pay additional success-based royalties for local productions.
A Timeline of (Non)Transparency
Streamers seem to be slowly shifting away from total opacity, but to what degree?
Feb. 1, 2013
House of Cards, the first series produced exclusively for Netflix, premieres. Netflix doesn’t release any viewing data.
HBO and other premium cable outlets begin reporting selective cross-platform ratings that include on-air, delayed viewing and streaming totals.
A few third-party analytics companies begin releasing some streaming data — heavily disputed by streamers themselves — that show, among other things, Netflix’s Fuller House being a huge hit.
Nielsen, the biggest player in linear TV ratings, releases its first set of streaming data for shows including House of Cards and Marvel’s Defenders.
Netflix for the first time reveals a small amount of data — based on a standard of users watching 70 percent of a movie or 70 percent of one episode of a series — in its quarterly earnings report.
Nielsen begins releasing weekly top 10 lists for streaming titles. The Umbrella Academy tops the inaugural chart.
The Gauge, a monthly snapshot of TV use by platform from Nielsen, launches — with buy-in from Netflix and other streamers, marking a big change in their attitude toward the ratings service.
Netflix debuts its own weekly top 10 list, backdated to late June of that year. It also includes the service’s most popular shows and movies of all time, including ones prior to the launch of the weekly list.
Amazon and Nielsen strike a deal for the latter to provide ratings for Thursday Night Football on Prime Video, marking the first time a live streaming program is part of Nielsen’s national TV measurement.
This story first appeared in the Sept. 6 issue of The Hollywood Reporter magazine. Click here to subscribe.
Sept. 8, 8:50 a.m. An earlier version of this story’s “Timeline of (Non) Transparency” incorrectly stated when Netflix backdated its weekly top 10 lists. It happened at the onset of the lists.
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