In The End, Napster Came For Us All: Why The SAG/WGA Strike Won’t End Any Time Soon

“Napster”… the name brings back lots of memories, doesn’t it?

Not only was it fun sharing music across Napster’s platform (and discovering lots of new music along the way), it felt downright righteous! While you were getting ahold of music you loved for free, at the very same time, you were sticking it to “the man”. From vinyl records to audio cassettes and 8 tracks to CDs, the retail-retail price of music was always insultingly obscene.

Who in their right mind back then walked into a record store and paid the sticker’s “suggested retail price”?

Napster was our collective revenge.

The problem never was that the artists were greedy.

The record companies and all those talentless music industry people weren’t good at making anything – other than deals that benefitted them. It has always been thus in Show Business.

These are the gate keepers and carnival barkers. They’re never the talent or the content audiences want – and pay for. They’re ticket-takers… who end up taking all the money.

File-sharing via Napster allowed the music’s lovers to cut out most of these scurvy bastards. But our reaction to the corporate greed around the artists ultimately rained hell upon most of them in the end.

Napster’s core idea – something for nothing – is alluring. But it’s deceiving. The stone cold truth is, you can’t get anything for nothing. Everything comes with a price even if you can’t see it. Give it time. You will. And if you don’t literally see it, you’ll feel it – like climate change.

Napster was both a revelation and a curse. It changed the music business down to its core.

Before Napster, in order to make money in the music business, you had to tour to support your album sales. Album sales were where the money was. But Napster destroyed album sales; fans now could get that content for free! Suddenly, artists had no choice but to give their music away for free in order to motivate people to come see them live – because that’s where the money now lived.

Rapidly evolving technology put professional moviemaking tools into everyone’s hands. The old joke around Hollywood was how everyone really wanted to be a director. Now everyone IS a director – if they want to be.

Remember when YouTube was a glorified home video site? Now they’re an entertainment publisher and distributor – as ubiquitous as Google – YouTube’s owner. My kids wouldn’t know what a “cable subscription” was. To them the idea of watching TV shows at a fixed, scheduled time is mostly absurd.

That’s why YouTube appealed to them. It’s why streaming appeals.

Napster came for feature films in the form of home video, home theaters and pay cable.

Coming for TV took longer. TV had created a system that supported lots of writers and actors – and directors – and all the craftspeople needed to make TV and movies. To understand what the strike’s really about, you have to understand the old paradigm – why it was the way it was – and why it can’t be changed, only replaced in its entirety.

It’s virtually impossible for any TV show to make any money on its first run. It simply costs too much to make it and the licensing fees and ad dollars from a single showing just won’t add up. TV shows need to run multiple times in order to turn a profit. The more times a show runs, the quicker it’ll become profitable. Some shows – Seinfeld, Friends, anything Dick Wolf – are re-run institutions.

Syndication was TV’s first big game changer – the thing that made TV so absurdly profitable for so many people. People loved shows like “MASH” so much they’d watch the show if it was on regardless of the episode running. Syndicated shows became part of some peoples’ daily schedule.

Ad dollars dictated everything. Most people watched syndicated shows during the weekday. Same time, same channel. But, because they’d likely miss a day here and there, it made zero sense for any syndicated show to follow a strict story chronology. To work successfully in syndication, shows would have to be close-ended. That means you didn’t have to see the episodes before or after; everything stood alone.

Television ad cycles run 13 weeks. If you were to strip a show five days a week, you’d need at least 65 shows (5 X 13) to have enough content to run the whole cycle without repeating any episodes. Of course, if one had more than 65 shows to run – that would be even better!

The number 65 ruled TV. It dictated the kind of shows the networks would buy and therefore what kind of shows creatives would pitch. No one was going to buy a show that ran a continuous story across its season.

So, in order to sell a show, you had to demonstrate that it had 65 variations. To help shows reach that plateau, networks would order anywhere from 22 to 28 episodes. That way, a successful show could achieve syndication in two-and-a-half seasons.

HBO (and then SHOWTIME) changed the “65” dynamic. Pay cable relied on subscribers (rather than ad dollars) to fund its budget. They had no need for their shows to reach 65 episodes. Like the BBC (financed by license fees paid by anyone owning a TV), HBO ordered short seasons. Anywhere from six to a dozen shows.

When I made “Tales From The Crypt” for HBO, our seasons ran anywhere from 12 to 15 episodes.

But the deals HBO made with the creative guilds broke away from the syndication business model. Whereas syndication paid residuals every time an episode ran, pay cable assumed the right to play episodes however many times they liked – without paying anyone who made the episode.

Pay cable wanted the creative artists to pay for the fact that people “consume” pay cable differently than regular TV. The studios argued (as they always do) “But, we don’t know if we’ll make any money in (fill in the blank with pay cable… or home video… or DVDs with bonus content… or streaming).”

The fact that they always DO make money? Forgotten! The studios demanded that the people creating the content take all the risk. The exact same thing happened with home video. It’s happening now – but even worse – with streaming.

Streaming is great for storytelling. I, frankly, love the idea that an audience can consume a story all in one, long sitting if they want to. But, let’s be real about what Netflix really is (and really isn’t). What they are is a distribution platform. That’s it. What they aren’t – content creators.

Netflix is no more than than a ticket taker taking our money and pointing to the screening room where we’ll find our content. They pay Ted Sarandos – their CEO upwards of $40 million! Ted creates zero content. The only thing he makes are deals.

Trust me on this: no one subscribes to Netflix because of Netflix’s CEO. Netflix lives and dies on content, not on its CEO – or any of its executives.

The New Yorker recently told the story of “Orange Is The New Black“, a huge, early hit for Netflix. Since it first started playing on Netflix, Orange has had 105 million viewers. That’s 105 million subscribing eyeballs (210 actual eyeballs providing all the viewers have two). How many of those eyeballs subscribed to Netflix in order to watch the show?

The original deal all the creatives made were based on a distribution and pay model (syndication) that simply didn’t apply here). In fact, the pay model didn’t reflect the creative process – or the distribution model.

Consequently, while Netflix got rich, the people who actually did the hard work of making “the show”Orange” got screwed. Netflix has the right to run shows for 52 weeks – a year ffs! – before paying anyone a residual. And the residual is more a nicety than the contractual obligation it should be.

The ticket-taker – Netflix – is taking all the money!

Like I said – creatively, streaming is very appealing. But TV’s business model hasn’t just changed, it’s fractured into multiple models. The studios would like to have just one model – where they own literally everything.

That’s where AI enters the scene.

AI is an existential threat to creative people. Computers can write template scripts: action, romance, sci-fi, horror, comedy even. Oh, sure, the first drafts will all be pedestrian and weak with dialogue that strains and sucks and shits itself. But that’s when the studios envision hiring writers – to re-write what the computers created (and that the studios own outright).

Ownership is the bottom line. For SAG, it’s ownership of one’s image and voice. The studios want the right to pay background artists once – for their likeness which they could then use forever – without paying the artist a penny more. We’ve already brought long-dead actors back to life as part of TV shows and movies. AI will make their deaths almost meaningless.

AI could keep actors alive forever – no matter how much the actors might hate it.

The studios have openly stated their animosity toward the unions. These over-paid ticket-takers don’t want to negotiate with us, they want to break us. Will they?

I’ve no idea. What I do know is this: the old system is deader than dead. There will be a new distribution and payment paradigm. Losers likely will out-number winners by a lot. Greed will see to it.

The SAG-WGA strike has no incentive to end. We really do stand at a “do or die” moment. If we cave, we will lose our way of life and our businesses. We really do have nothing to lose.

But, then, that means we have everything to gain.

And that’s why the strike will go on and on.

It’s just Napster.

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