The Writers Guild of America West (WGA West) has recently released a 15-page antitrust report, breaking its relative silence and accusing Disney, Amazon, and Netflix of becoming “the new gatekeepers” of the entertainment industry. The report argues that recent mergers and deregulation have set the stage for a future dominated by these three companies, leaving them in control of content production, consumer viewing options, and how content is accessed.
According to the report, Disney’s series of mergers with companies like Pixar, Marvel, and Lucasfilm have not only increased prices for its streaming services but have also vertically integrated the company. This consolidation has led to creatives giving up revenue from future licensing of their TV content and has stifled output and innovation within the industry.
Netflix, once seen as a promoter of a competitive environment, is now accused of abusing its position as the largest streaming service in the world. The report alleges that Netflix is using its leverage as an employer to decrease innovative content spending and raise prices for consumers.
Amazon, leveraging its practices as a tech company, has aggressively acquired other companies and allegedly underpaid union residuals while undermining competitors with “tolls.” The report argues that Amazon’s practices in the entertainment industry mirror its approach in the tech sector.
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The WGA West has called on lawmakers and antitrust agencies like the Federal Trade Commission to take action. The union wants these agencies to prevent future consolidation, investigate signs of anti-competitive practices, and regulate and monitor streaming platforms more closely.
The WGA West supports the new merger guidelines unveiled by the FTC and Department of Justice in July. These guidelines require companies to consider the impact of proposed transactions on labor and highlight the agencies’ intention to review how mergers could affect wages and working conditions. The report cites a recent case where a federal judge blocked Paramount Global’s attempt to sell publisher Simon & Schuster due to concerns about the impact on authors.
During an event with the FTC and Department of Justice, Laura Blum-Smith, the WGA West’s director of research and public policy, blamed the strike on a wave of mergers that have given studios and streamers the power to exploit workers. Blum-Smith highlighted Disney, Amazon, and Netflix as companies that have gained power through consolidation and vertical integration, resulting in precarious working conditions, short-term employment, and lower pay for industry workers.
Ken Ziffren, a veteran entertainment attorney and Los Angeles’ film czar, predicted further consolidation in Hollywood as the global streaming platforms shrink from seven to five. Ziffren argued that fresh cash is needed to sustain the studio streamers.
The mergers and acquisitions landscape has been slowed due to rising interest rates and increased scrutiny from competition enforcers. However, the WGA West’s report brings attention to Netflix’s ability to increase subscription fees without impacting its market share. The union claims that this demonstrates Netflix’s power to raise prices and offer less content and innovation for more money.
Disney recently announced price hikes for its ad-free tiers of Disney+, Hulu, ESPN+, and Hulu with Live TV. An antitrust lawsuit has also been filed against Disney, accusing the company of anticompetitive agreements that inflate the cost of live television streamed over the Internet.
The timing of the report is significant as negotiations with the Alliance of Motion Picture and Television Producers (AMPTP) are ongoing. The report aims to highlight the diverging priorities among AMPTP member companies, with the WGA West arguing that only Disney, Amazon, and Netflix are set to become the new gatekeepers of the industry.
In conclusion, the WGA West’s report raises concerns over the increasing market power of Disney, Amazon, and Netflix. The union calls for regulation and monitoring of streaming platforms, while emphasizing the need to prevent further consolidation in the industry. As negotiations continue, the report serves as a reminder of the diverging interests among industry players and the potential consequences of continued consolidation.
