2019-11-13 The Hollywood Reporter

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The Re ort

Behind the Headlines

THE HOLLYWOOD REPORTER 13 NOVEMBER 13, 2019

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Illustration by Zohar Lazar

Television

Hulu Bulks Up

FX originals power Disney’s

other streamer p. 16

↑ Moguls

Chernin’s War Chest

Exec raises $700 million

for media buys p. 24

$4.89 (+3 6 % )

ENTERCOM (ETM)

The radio company reports

strong quarterly earnings

as CEO David Field talks up

podcasting and Radio.com,

a DVR-like app for audio.

$129.21 (-8%)

ROKU (ROKU)

Wedbush reiterates its “neu-

tral” rating as the streamer’s

spending on R&D “may remain

elevated for several years”

amid international expansion.

partially funded by residuals, may

have to refight the same battles.

Those formulas, which the DGA

pioneered in 2014 and improved

on in 2017, focus on original

content and are similar across the

three above-the-line guilds.

The residual is a single payment

per year. The amount declines

year by year, but the only other

variable it depends on is the size

of the platform, measured in

terms of domestic subscribers. A

show’s viewership doesn’t matter,

which means if a show performs

well, the residuals don’t reflect

the upside. Conversely, if a show

underperforms, talent doesn’t

suffer, as long as the show keeps

being offered on the platform as

library content. And that’s the

challenge for guild negotiators:

As the number of linear residu-

als decline, grasping more of

the VOD upside without losing

the protections of the existing

formula is do or die. Crafting

A

s Disney CEO Bob Iger

kicked off the stream-

ing wars in earnest with

the launch of Disney+ on Nov. 12,

the TV industry’s pivot from

linear broadcasting to direct-to-

consumer platforms is igniting

a battle over residuals that could

see once-in-lifetime dual union

strikes in mid-2020.

The canary in the digital coal

mine? In most labor deal cycles,

the Directors Guild of America

reaches an agreement at least a

half-year in advance of its June 30

master contract expiration via

prenegotiation in the fall and for-

mal bargaining in late November

or early December. But this year,

a source close to the matter tells

THR not to expect formal talks

between the DGA and the Alliance

of Motion Picture and Television

Producers (AMPTP) until some-

time after the new year.

The stumbling block, per

multiple sources, is a union effort

As the industry enters a new era, the lack of data beyond ‘self-serving marketing’ metrics

will play a large role in Hollywood’s next big union standoffs BY JONATHAN HANDEL

to revise the existing streaming

residuals formulas, the calcu-

lations that determine what

writers, directors and actors

get paid as original or acquired

product is exploited on subscrip-

tion video-on-demand platforms

like Netflix and Disney+ or on

ad-supported platforms like

NBCUniversal’s

forthcoming

Peacock. The DGA

has been spearhead-

ing the analysis of

this issue for months,

with a source adding that SAG-

AFTRA is more in the loop in

this bargaining cycle than in

prior years. The directors’ efforts

likely will end up benefiting the

writers and actors guilds as well

through a mirroring process

called “pattern bargaining,”

while the International Alliance

of Theatrical Stage Employees

(IATSE) and Teamsters crew,

whose pension and health fund is

Lloyd Braun

Endeavor taps the former

ABC Entertainment chief to

lead its representation and

management business

and acquires a stake in Braun’s

Whalerock Industries.

Michael Paull

The Disney+ streaming

services chief presides over

technical glitches at launch,

forcing the company to release

an embarrassing statement

admitting to problems.

David Levy

The ex-Turner Broadcasting

executive lasts just two

months as CEO of the Brooklyn

Nets before parting ways with

the team Nov. 12.

Streaming TV’s ‘Black Box’

and the Coming Guild War

Nov. 4-

Iger

Richard Plepler

The former HBO CEO, who

departed the cabler in

February after a three-decade

run, is in advanced talks to

sign an exclusive production

deal with Apple TV+.