Hollywood Upended as Unions Tell Writers to Fire Agents
nytimes.com
nytimes.com
I'm thinking a lot about managers and sales at the engineering firms I've worked at in the past. They get to see the numbers coming in, the salaries of everyone, and have a lot more say over who gets paid what. They've got the data which is power. The talent who actually produce the product are in the dark.
Which is why it's so important for things like unions to exist. Without a union, writers wouldn't have any way to fight back against packaging.
In what sense do Sales people own the means of production and exploit engineers? They're simply closer to the flow of money and able to take advantage of information asymmetry.
This is a different phenomenon, and a more interesting one in my opinion. It's part of the difference between those who make a thing, and those who do supporting business functions that happen to put them in an advantageous position.
However, over time the sales team gained more and more influence. Since their compensation for support contracts was seen as a given they wanted to really focus on sales.
Eventually they came up with the great idea to offer support for "free". A product with free support became fairly popular because of the price. Sales increased but support tools and staff did not because there was just no new support money. Worse yet workload skyrocketed because sales took off ... among price conscious customers who were pretty terrible users and demanded a great deal of support time.
It didn't help that the product itself was often sold as something it wasn't.
Eventually the layoffs in support started because "support just wasn't bringing in enough money to justify the head count".
The folks with visibility to the money did fine in the short term despite even undermining the company's long term income, everyone else not so much.
Nothing was better than getting everyone on a conference call with the customer (I prepped the engineering team so no surprises) and letting engineering talk to them in a situation that they're a bit less likely to use that line of reasoning.
Amazing how quickly things were done after that ;)
Yeah sometimes the folks on the ground know how it really works as opposed to those who don't see it day to day.
With all the benefits of hard working people and without stupid, greedy managers standing in their way, co-ops should be literally everywhere!
Since Amazon doesn't participate in stock buy-backs, like most tech companies do, most of the salaries are actually funded by stock holders in the dilution of their shares.
So it is still a battle between people looking for short personal profits against those who are seeking long-term sustainable profits. There is no associated extra costs for depleting farmland or practicing unsustainable farming methods so assholes will continue to abuse it as long as they make money on it.
Also read stuff by David Ellerman
I have been a member of a worker coop BTW so I do have some experience.
Maybe I'm being an idealistic hippie or whatever. I kinda feel that opaqueness around compensation is meant to keep employees under-compensated for as long as a company can afford to do so. Solution: compensate everyone well, and if you can't afford it, don't be in that business anymore.
Ultimately you can only afford to pay someone what the marginal value of their labour provides. If you pay them more it has to come from some other person in the organisation or the company loses money.
1. Not really, but I wish she was real :)
So, in short, our economy is built around a dynamic where many people have very little and are therefore essentially forced to work for those who have a lot. The precarity of those who would benefit most from being part of a co-op is largely what prevents them from being in one. This precarity is a boon to the wealthy in society, who can benefit from having people compete in the labour market. Thus, no one with the means to change the circumstances -- such that co-ops are simpler to form -- would ever want to do so as it would hurt their position.
There's no reason you have to run your company this way. IN fact making salaries public within the company should very much improve things. If they are fair then what's there to hide, and if they are unfair, why is that so? And if they look unfair but aren't, then some explanation can't hurt.
Is it how you run your company?
Typically when someone thought a salary was wrong they wouldn't complain publicly, but ask "why is the marketing VP getting so much?" And we could show salary surveys, what the VP does, etc.
This kind of attitude helps keep a company together. You know about the common attitude of engineers shitting on sales and marketing as morons or the marketing folks with contempt for the engineers who "have no imagination?" I've never had a company like that.
I've long thought that it might be educational to work as a recruiter for a few months.
That way I'd get access to what is effectively an honest, accurate salary survey, not the highly suspect self-reported numbers you see on various websites.
You can find folks on HN who have worked in that industry, and they will share this info with you.
It’s almost a red pill experience.
We thought the market was cooling down too much to support a price on the high end of the range. We were wrong. It sold in one week.
It doesn't make sense to compare this outcome to what you -- an amateur -- would have done.
As an example, suppose your house could sell for $750,000 immediately with you paying a 6% commission of $45,000. Or, suppose the same house could sell in 6 months (after a lot of showings) for $800,000 with you paying $48,000 in commission. The $50,000 extra you'd make on the sale is really big for you. But the extra $3000 the agent makes for months of extra work and waiting around is nothing. She'd rather take her $45,000 after selling it cheap after 1 week and then move on to sell another house.
Isn't that the normal dynamic?
EDIT: I've heard that you can write a listing contract so that the agent's fee is tiered. So, for example, they'd get 1% if they sold it for $500k because even a "for sale" sign written in crayon in front of the house would sell it, but then 6% on the amount between $500k and $750k, and a juicy 18% or whatever on the price above $750k. But does anybody actually do this?
The problem is that doesn't really fix it. You want them to get the $800K even though the $750K offer walks in the first month. But the $750K offer nets them $20,000. The $800K offer nets them $29,000 -- 45% more to get a ~7% higher price, but for doing 500% more work. So they still take the $750K the first month and then spend the other 5 months selling five more houses for $750K each.
In theory you could make the math severe enough work out the other way, e.g. they get 0% for the first $750K and then 50% of anything over it. But then the problem you have is valuing the base price appropriately. If you set it at $800K then they don't even bother trying to sell your house, but if you set it at $600K then they're back to being better off to sell six houses in six months for $750K each instead of one for $800K, and you end up paying them a very large commission for the privilege.
I think the thing your example overlooks is the power of referrals. The happier you are with them, the more likely you are to refer friends and family to the agent when they ask you for a trustworthy recommendation. Like any sales gig, a network of happy customers takes time to build and is where the real money is at.
The listing agent is incentivized to price your house as highly as possible while still selling it quickly.
Under most normal circumstances this aligns exactly with a seller's best interests.
FSBOs don’t usually sell as well for the simple reason that REA caravans don’t hit them. This is kind of important since we live 2000 miles away from where we were selling. We’ve seen some 1% agents and they were possibly worse than nothing (we soaked a seller with shitty agents for about $35k when we started to walk away after an inspection).
Our agent also dealt with endless bullshit (reassessment, delivering an ultimatum to an annoying tenant when my wife folded, etc) for a couple months leading up to the sale. We wanted to unload the house and NOT deal with finding a new tenant. I think this is the part people underestimate — it’s NOT just the $5k net. It’s also all the crap we didn’t have to deal with while living 2000 miles away and both working full time jobs. There are endless time sensitive documents, amendments, etc that I didn’t have to grind my teeth about.
Honestly I’m starting to wonder how many houses the friendly Internet Experts have sold. It’s a shocking amount of bullshit to navigate.
Almost Noone else in the value creation work flow gets paid on percentage.
Why then real estate agents?
The issue here is that the agents are taking a (fairly large) cut of the shows being produced as an alternative to getting paid by their clients. In the real estate analogy, it's as though your agent could decide to get paid a percentage of the buyer's income less expenses rather than a chunk of the sale price. In that scenario you would expect your agent to bring you lots of wealthy buyers who then produce low-ball offers, and so has it been in the writers guild experience.
That's the theory, but then it turns out to be a lot more profitable to get commissions for selling five houses for $400K each than to spend the same amount of time to sell one house for $550K.
Cue statistics about real estate agents selling their own homes for substantially more than they get for their clients.
But that's very different from this situation described here, where the agent serves a different and in fact diametrically opposed master.
Their incentive would be to keep the house unsold forever, and milk the client for many hours of work (regardless of the value of those hours)
So you think the 'talent' is able to be 'talent' without the sales and management? Do you know how many people (in entertainment) are where they are not solely because of talent but because of sales and marketing? Ditto for software. You think that the google guys (Larry & Serge) would be able to make it on their own strictly on their own 'talent'? All that matters is Wozniak, Jobs the 'con-nive-er' didn't matter?
And I am not saying this in a 'well without the Janitor we wouldn't..' type of way either. Sales, marketing and management is a very important part of the process.
> seem to carve out a larger slice for themselves, often in increasingly clever ways
Yet you don't think that the same cleverness leads to sales at the company and/or other benefits?
(Unless you adopt a radically unconventional definition of "fair", such as "whatever a laissez-faire market produces is fair by definition".)
Not trying to be cynical or snarky here at all but it's kind of an 'of course' moment I've had on this a long time ago.
If you're a software engineer or hacker you tend to have the best laptops, best home network, best smart phone setup, etc.
Look at how inept on tech your friends are compared to you.
They're smart at whatever they're doing. If they're a firefighter they're probably amazing but when it comes to tech they're incompetent or at least naive.
Same thing for money... if ALL you do is work with money you're going to be amazing at it....
This is why I want to work with money. Unfortunately, this is how the world is just setup.
That, of course, brings up the question of what the "right thing" is. In a society with no moral absolutes, what is the right thing? Who is to say that a greedy agent is not a good person, as compared to an honest agent?
He explains in it how agents systematically screw over writers: https://davidsimon.com/but-im-not-a-lawyer-im-an-agent/
I mean, I understand the value of lobbying and networking, I use it quite a bit in my own life, but is it really so hard for writers to connect to employers, that they need to pay someone to do it?
I generally do share the same skepticism. Does it really have to work that way? Can't just have a talent database where you can query for certain characteristics and within seconds see profiles with photos and videos of example work?
I imagine a lot of agents are retained for, "I'm a nobody who has done 2 Colgate commercials. Go campaign for me among your connections and get me to the next rung of the ladder." I appreciate that we are talking writers, not actors. But the same concepts apply.
It only makes sense a ~0.5M dollar brand/person has a 'marketing/legal' department.
The weird part is that Hollywood has this ingrained in their culture. Could someone participate without spending the cost of an agent?
It use to be you needed an agent to vouch for you to an executive high up in studios. Together they would hash out if your content would be wildly received by a large enough group of people to turn a profit.
Now you have digital equity in the form of followers to show that you personally already have entertainment equity. The old guard isn’t willing to put their money fully into this new entertainment Avenue, in part because of how entrenched they are in the profits of the current machine. Studios can make money for selling a script, premiering the movie, product placement in the movie, printing the dvds, offer subscriptions to their streaming services, running advertisements on all of that as well, and distribution of the physical dvds.
But it’s changing and I would estimate it’s about 1.5 more generations away from the younger guard upending the system completely.
My experience is that, in many, if not all fields, people are experts at their particular skill only.
Writers are good only at writing, developers are good only at developing, and so on. Making connections and finding work is a different set of skills that many don't have.
Do they need to pay someone to do it? Well, in theory, they don't need to.
But that means learning a skill they probably don't like. Many developers are introverts who don't want to spend time talking to people. My guess is that writers too prefer to work on their own.
From the studio POV, an agented writer is likely to be at least reasonably competent. From the writer POV, an agent is likely to be at least a reasonably competent negotiator and have direct industry contacts.
The idea is that the studio gets people who can do the job without having to read thousands, perhaps tens of thousands, of terrible scripts from wannabes. Agents try to talk up writer fees and include standard extras because writers have no clue what their services are worth to a studio, and many don't understand the finer points of studio contract law.
When the system works, everyone benefits. Of course it doesn't always work, and writers get screwed in all kinds of creative ways. But agenting means that on balance they still do better than they would going up against Gigantic Media MegaCorp Studio on their own.
Now, streaming has created an explosion in TV programming, and some agents are setting themselves up as production houses rather than as talent managers.
This changes the balance of power and makes agents more like an employer with a vested interest in cutting a deal than a representative with an interest in cutting a good deal for their client.
Hence the (off-screen) drama.
So agents are a filter, like tech recruiters, essentially.
Interesting concept. In the tech industry, I'd be much more okay paying an agent or agency directly to represent me than being in a union, since I'd be able to vote with my feet (by switching agencies) and my money if I feel a particular agency is not properly representing my interests.
Unfortunately, here the writers are being represented by both an agency and a union and are therefore being double-billed, so to speak.
Looks like there’s an opportunity for the Writer’s Guild, with the help of a few technologists, to create an internal peer-review system. (Ideally, where reviewers are blind to the writer’s identity.)
From the outside looking in, it seems that one of Y Combinator's core innovations (contributions) is normalizing that stuff, giving everyone the same deal. Reduces friction, increases certainty. Thereby improving the market.
Broadly speaking, writers are freelancers who enter into short-term high-value contracts for work-for-hire. Agents negotiate the contract on the writer's behalf, with the agents compensation depending on the writer's (this, in fact, is what the current dispute is about, as this has become less and less true). This ensures that the writer gets a good deal, ideally the best deal possible. Talented writers aren't necessarily talented negotiators or networks, so this division of labor works well.
Seems to me everything I just said also applies to freelance Tech Workers. But instead of Agents we get marketplaces like oDesk or TopTal where freelancers are competing against each other, often in a race to the bottom.
Rates are lower than independent consulting, but still very lucrative.
Good recruiters are rare, but they're out there.
To answer this, it's because as a group, agents have a tendency of screwing up the people they represent.
This is also the reason there are very few successful restaurant or hotel guides.
I think this is the root of the problem. Say you're a studio making a movie and you want to hire, say, 5 writers, 25 actors, 10 special effects editors, 3 stuntmen, etc. You'd prefer to get them as a package because it's easier for you and you have a better chance of them working well together.
The agencies stepped in and provided that service, but now they have an obvious conflict of interest. If they get $10 million for all of those combined it's now up to them to decide how much each of their individual clients get and, therefore, how much of that $10 million the agency keeps. They have a clear incentive to get the clients to accept less.
I don't know how much of an impact it really has. The superstar writers that can actually use an agent probably aren't being packaged. The interchangeable cogs that don't really need an agent end up with an agency that's more like a staffing firm. I think the only ones really getting screwed are those that straddle the line between superstar and cog. Their agents have an incentive to keep them in the packages while it would be better for the writer to be in the superstar category.
This is called a production company and it has existed as a concept for a long time. Amblin is Spielberg's production company, Bad Robot is JJ Abrams', Syncopy is Chris Nolan's, etc.
It's just another layer of abstraction... ok now the production company has given the studio a nice package of talent to sign a contract with, but how did the production company create that package? By signing talent, which means there's still a role for talent agency. They're just negotiating with the production company instead of a studio.
What big talent agencies tried to do was collapse those two layers--production company and talent agency--into one. They wanted to do this because production is lucrative, especially when you don't have to negotiate with talent! Because you supposedly "represent" them.
> The interchangeable cogs that don't really need an agent end up with an agency that's more like a staffing firm.
I mean, I'm sure this maps to how the big companies think about staffing, but I doubt you'd find many people in the film industry who think of themselves as "interchangeable cogs". This fundamental disagreement about value is why contract negotiations happen in the first place.
Not really. A production company actually makes the movies/show. What I am talking about is more akin to a staffing firm.
>It's just another layer of abstraction.
It's specialization, not abstraction. Agencies can be good at acquiring talent while studios can be good at producing movies.
>I mean, I'm sure this maps to how the big companies think about staffing, but I doubt you'd find many people in the film industry who think of themselves as "interchangeable cogs"
You think they would have figured it out after their last strike.
- gatekeeping. Agents help studios/producers make sure they’re only talking to people suited for projects. Every project has super specific needs in terms of actors and writers. Agents stake their reputations on putting good choices in front of the decision-makers. Hollywood has tons of ambitious people vying for opportunities. Entry-level folks have an especially tough time breaking in, without having an agent vouch for them
- gig-like nature of Hollywood. Writing a movie or a TV season only takes a few months. Writers and actors are always hustling for the next gig. Agents help bear some of the workload so that writers can focus on writing, not scheduling meetings, negotiating contracts, searching for the niche opportunities that suit them, etc.
- bespoke nature of the contracts. The split depends on a lot of factors: how famous the actors are, how accomplished the writers are, etc. That means every project requires negotiation, and it’s nice to have someone in your corner who’s a pro at that.
- difficulty of closing a deal and the low close rate. Even for accomplished writers, it’s a long road to getting something actually made, punctuated by periods of waiting. It means that there are lots of business-related decision points where agents can be helpful, and it means that writers try to keep multiple irons in the fire -contributing to more work on the business side.
- relatively large amounts of money involved. Obviously there’s a lot of money in Hollywood for talent, relatively to most industries, so there’s room for agents to carve out livings
I also wonder if a preference for secrecy plays a role? e.g. as a writer, you need information about projects to make decisions, to craft a pitch, etc., and agents help mediate the flow of information.
In the past, this has led to individual agents breaking away from an agency, and using their contacts on both sides to start something new, and more mutually beneficial. I believe Endeavour started out like this in a round about fashion. But over time, Endeavour has grown, consolidated power and has become the same poison it was once the antidote to.
The WGA's new staffing system may well make the current agency model obsolete. And if that happens, agents themselves will have to go back to their roots and rediscover what their actual value is.
[1] Note that the 'packaging deals' referenced in the article seems to confirm this notion.
Because being good in a field means your time spend in that field is valuable. Running around having meetings with people and trying to set up future work, negotiating pay ect. is time not spend in your field. It’s not that agents have some secret knowledge that artists simply cannot learn, it’s just that the time effort and network of an agent is entirely orthogonal to the art itself.
According to the WGA website (i.e., https://www.wga.org/employers/agencies/agency-code-of-conduc...):
"The Code of Conduct is a landmark agreement that realigns agency incentives with their writer-clients and eliminates the conflicts of interest inherent in agencies’ receipt of packaging fees and financial interest in production entities. Agencies signed to the Code may only represent writers for a 10% commission and may not receive packaging fees or be affiliated with a company producing or distributing motion pictures.
The Code also contains important provisions on how agencies must represent writers, provide timely information to the WGA to enforce the collective bargaining agreement and writers’ individual agreements, and promote non-discrimination and inclusion."
If interested, here is the complete 15-page WGA Code of Conduct: https://www.wga.org/uploadedfiles/employers_agents/agencies/....
This episode in particular is a good overview of what's going on and what the complaints and objectives are...
http://scriptnotes.net/393-twenty-questions-about-the-agency...
Unions really don't have much to do with this problem. It's merely an aspect of the division of labor. It's also probably a net-negative for the factor to have production stop so a worker can replace a bulb (assuming the production isn't stopped because of the bulb).
If you went in and made unauthorized changes, for sure.
> Do they demand to be paid wages lost from your usurpation of their role?
That depends. If we're talking about, say, government contracting, and the LDAP team is paid on a per-request basis, and you circumvent this, yes, they would rightfully demand to be paid what they're entitled to in the contract. Of course, in this case, it's probably two separate employers in one larger organization, but it does happen.
In the case of unions, the union has a contract to do certain things in return for certain compensation. A condition for doing it at a certain price might be that the contract is exclusive. Plenty of examples of this type of pricing in the business world.
So, not really a unique union problem.
At public companies in the US, people get paid to review your LDAP group membership requests for a simple reason: CEOs and CFOs don't want to go to jail for failing to comply with Sarbanes-Oxley.
If you're at a private company, though, and you think the change controls at your company are a net loss in value, that seems like something to discuss with your CTO.
It's basically the opposite of a union.
Are you being sarcastic? Unions fight with each other all the time like any other group with their own interests. Unions will try to get the best deal for their own people which of course inevitably means someone else getting less.
Sometimes it's literally a physical fight.
This is a textbook case of selling out one’s clients. Also, 10%!
I hope technology can democratize things somehow. Hollywood needs reformation.
If 1% of people stop consuming Hollywood, is that going to change Hollywood? No. But that 1% would be a HUGE market to an upstart/independent market. That new market would be a threat to Hollywood, and that might change Hollywood.