Why TV writers just came close to almost completely shutting down Hollywood

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In the late hours on Monday night, Hollywood was holding its breath as writers and producers were trying to hammer out a deal that would keep much of the entertainment industry from shutting down.

As the timer ticked down to a midnight deadline before a strike, the Writers Guild of America - which represents the people who write scripted TV, as well as a growing number of nonfiction and reality writers - worked to come to an agreement with the group that represents the studios, the Alliance of Motion Picture and Television Producers.

What was at stake? It really isn't outlandish to say that a writers' strike would shut down Hollywood. The last time the WGA members striked from 2007 to 2008, hundreds of writers walked out of their jobs. That meant many TV series had to cut their seasons short or end production. Many new series couldn't even launch production and died on the vine. The film industry came to a relative standstill.
Back then, TV's saving grace was reality television. In fact, that writers' strike marked a big wave of nonfiction programming, the staffs of which weren't part of a union then. But guess what? The WGA unionized many nonfiction writers and story producers in the years that followed. So if a strike did happen this week, it would've been an unprecedented shutdown of the TV industry, one that would've hit variety and late-night shows instantly.

What were the writers fighting for? It's essentially the same things any union - from auto workers to educators - fight for: more money, better and affordable health care, and some job security as modern advancements in technology have affected their jobs.

Thankfully for entertainment fans everywhere, the WGA and the AMPTP were able to come to agreement that would cover the next three years. The next step, ratification by the WGA members, is a formality at this point. But Hollywood certainly slept better Monday night after news of the deal broke.

Here's why writers came so close to shutting down Hollywood:

Increased backend payments for streaming viewership.

Increased backend payments for streaming viewership.

Clearly, streaming companies have become major players in the entertainment industry over the past five years. We've seen the rise of Netflix, Amazon Prime, Hulu, and a growing number of single-network streaming services, such as HBO Now and CBS All Access.

Payments for show reruns and movies that play on traditional TV are well-covered, but residuals for streaming and other digital viewing became a big issue in this round of talks. While the public has adopted a new binge-watching culture, writers realized they deserved a bigger piece of the streaming pie.

According to the WGA, the new agreement covers "a 15% increase in Pay TV residuals, roughly $15 million in increases in streaming video residuals, and, for the first time ever, residuals for comedy-variety writers in Pay TV."

Fair pay for TV's shorter seasons.

Fair pay for TV's shorter seasons.

As TV programming has become year-round, instead of sticking to the traditional fall and spring seasons, the number of TV shows has increased, but the number of episodes in a typical season has decreased. Limited and anthology series like HBO's "Big Little Lies" and ABC's "American Crime" are examples of this.

Why is this a problem? TV writers are typically paid by the episode, so fewer episodes mean less money, including less in backend residuals. But more shows don't necessarily mean more work to make up for shorter seasons. Production schedules can overlap, making it hard for writers to find work on another show.

The new agreement would provide better protections for writers, according to the WGA:

"We also made unprecedented gains on the issue of short seasons in television, winning a definition (which has never before existed in our MBA) of 2.4 weeks of work for each episodic fee. Any work beyond that span will now require additional payment for hundreds of writer-producers."


Affordable healthcare coverage.

Affordable healthcare coverage.

Yes, healthcare is a large issue for everyone, including Hollywood writers. Since many creative jobs in the entertainment industry can be considered freelance work or fail to meet the standards for a typical full-time job, many creative people depend on their unions for health insurance.

The health-insurance plan administered by the WGA was facing insolvency, having run under a deficit for three of the past four years. The options to keep it alive included decreasing benefits, raising member payments, raising the minimum salary to qualify for coverage, or increasing the studios' contributions to the plan.

The first few options were clearly not okay for WGA members, who already complain of lesser pay and fear for their access to health care in today's political climate. So having the studios pitch in more was a central part of the contract negotiations.

WGA says the tentative agreement with the studios included "contribution increases to our Health Plan that should ensure its solvency for years to come."

To read the full WGA memo about the deal with the studios, visit its website.