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The pandemic has sent Hollywood on something of a roller coaster in the past year. It's ushered in a huge surge in demand for streaming content on the one hand while shutting down film and TV production on the other. And that combination may have helped tip the scale on a Hollywood power struggle between the industry's biggest talent agencies and the Writers Guild of America. That's the union that represents film and TV writers. Stacey Vanek Smith and Alexi Horowitz-Ghazi from our daily economics podcast The Indicator From Planet Money take it from here.
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ALEXI HOROWITZ-GHAZI, BYLINE: If we were to do this screenplay-style, like, what's the world before this conflict look like?
JOHN AUGUST: It's a world in which, you know, there are studios that are hiring writers and there are agents who are helping writers get those jobs.
HOROWITZ-GHAZI: This is John August, veteran screenwriter and a member of the Writers Guild's negotiating team. He says talent agents have historically connected creative types like writers with the suits over at the studios and TV networks in exchange for a 10% commission.
STACEY VANEK SMITH, BYLINE: But in recent years, Hollywood has started moving away from that classic system. The big agencies have been paid more and more directly by the studios and TV networks instead of on commission. The big agencies had also begun to get into the business of producing their own content.
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AUGUST: Suddenly your agent is not just the person representing your side of the deal. They're also really representing the other side of the deal. And that's about as clear a conflict of interest as you could imagine.
HOROWITZ-GHAZI: So in April of 2019, after months of failed attempts to renegotiate this whole system with the agencies, some 7,000 film and TV writers with the Writers Guild fired their talent agents all at once.
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AUGUST: We're trying to remap the relationship between writers and agents in Hollywood.
VANEK SMITH: August says this was daunting at first, but the writers quickly pivoted to these informal networks that would help connect them with employers.
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AUGUST: Everyone started to realize, like, oh, agents are important, but they're not actually crucial to the whole process.
HOROWITZ-GHAZI: And then, of course, the pandemic struck, and two big things happened to Hollywood. First of all, TV and movie production ground to a halt. And second, everyone started to binge huge amounts of content.
VANEK SMITH: And this was great news for streaming services, several of which debuted in the middle of the pandemic. It was also great for writers, who were able to work from home and, in many cases, were in even more demand.
HOROWITZ-GHAZI: The big Hollywood agencies, on the other hand, were in trouble.
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AUGUST: In many cases, these big agencies were representing touring musicians and live entertainment and wrestling, and they had all these things which were shut down because of the pandemic. Writing was the only thing that was still happening.
VANEK SMITH: August says that combination of pressures eventually helped shift the power towards the writers in their negotiations.
HOROWITZ-GHAZI: In July United Talent Agency, one of the four big agencies that dominate the industry, reached a deal with the Writers Guild to mitigate conflicts of interest. It agreed to move back towards working on commission and to cap its ownership of production companies at 20%.
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AUGUST: And that sort of set the dominoes in motion.
VANEK SMITH: Two of the other big agencies made similar deals in August and December. And finally, last Friday WME - the last holdout of the Hollywood agencies - announced that it, too, had reached an agreement with the Writers Guild of America, effectively bringing the dispute to a close.
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AUGUST: Ultimately, the writers got everything they wanted. We got resolution on the two big conflicts of interest.
HOROWITZ-GHAZI: And that is what screenwriters might call a classic Hollywood ending. Alexi Horowitz-Ghazi.
VANEK SMITH: Stacey Vanek Smith, NPR News. Transcript provided by NPR, Copyright NPR.
