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Why are Hollywood Unions Powerful?
Glen Whitman asks a good question, Why are unions so powerful in the entertainment industry when unions are generally weak and in decline in most other sectors of the economy? (Tyler asked the same question several years ago.)
I went to the family expert, my brother the movie producer and he had this to say:
...unlike in most other unionized industries, it's the INDIVIDUAL members of the unions in the entertainment industry that the management / owners want to work with. For example, Tom Cruise is a member of SAG, (I use him as an obvious example, but every other known actor is as well) and if the studios and producers want to make a film with Mr Cruise, and we all do, we have to come to terms with SAG. Similarly, Steven Spielberg is a member of the DGA, same issue. Though writers are not household names, it's the same issue, there are specific individuals who the studios want to be writing their TV shows and screenplays. It doesn't matter if Joe or John or Mary is stacking the boxes, flipping the burgers or ringing the cash registers so management can easily hire a non-union member to do the same job, in the film business we need to work with specific individuals who happen to be union members. Thus the power of those (comparatively) few empowers them all.
Combine with a bit of Hollywood leftism and the fact that the big names don't lose much from unions and you have a very powerful cartel. About the only way to break the cartel would be to turn the big names into owners - this has been done a few times but the stars earn so much anyway that even then the incentives to deviate are small. You Tube can give is a parade of amateurs but as soon as the amateurs become stars this model suggests that they will be co-opted into the union framework. Like my brother, I don't see the power of Hollywood unions ending anytime soon.
Posted by Alex Tabarrok on November 11, 2007 at 12:39 AM in Film | Permalink
Comments
One could say much the same of professional athletes. It is interesting that in athletic strikes, issues like salary caps are often a key sticking point. One would think that these caps affect the stars the most, and that the median player would be more interested in additional positions, pensions, and the like.
Posted by: yank_in_oz at Nov 11, 2007 2:08:40 AM
I wouldn't say that Hollywood unions are ending anytime soon, but they are becoming more diminished. Between all of the so-called Reality TV (No writers needed!) and the fragmenting of audience to other sources (Internet, video games, etc.) the unions are losing some of their power.
The unscripted television show COPS aired its 700th episode tonight. It went on the air March 11, 1989, right at the end of the last Writers Guild of America strike. I've read that strike cost television 10% or more of its audience. How much audience will this work stoppage cost?
Posted by: Steven at Nov 11, 2007 3:16:09 AM
Alex, your explanation is at least incomplete. Tom Cruise and Michael Jordan need a team to do their work (actually, Michael needed at least two teams) and their bargaining power depends on the type of team they need. You should compare them with any great writer or artist that does not need a team. You should also compare their teams with other teams that do not need a Tom Cruise or a Michael Jordan.
Posted by: Edgardo at Nov 11, 2007 4:46:41 AM
Interesting article! But how is this a cartel? From your brother's description, it sounds like the writer's uild fosters competition: The guild guarantees intellectual property rights to writers (e.g. residuals on DVDs and Internet play). This creates incentives for good writers to be in the business. Then producer's choose the individual writer's they want to work with. So, there is competition among good writer's for the lucrative shows. QED.
It's a tired joke (and to some extent, true) that Hollywood entertainment is junk, but I don't think that's due to the writer's union. The reality TV I've seen are much worse than the shows that employ writers. I am not a screen writer, but I have enjoyed good writing on TV; cf. The Sopranos.
Posted by: MostlyAPragmatist at Nov 11, 2007 6:41:13 AM
"For example, Tom Cruise is a member of SAG, (I use him as an obvious example, but every other known actor is as well) and if the studios and producers want to make a film with Mr Cruise, and we all do, we have to come to terms with SAG. Similarly, Steven Spielberg is a member of the DGA, same issue. "
Doesn't this also beg the question of why Tom Cruise is a member of SAG and Steven Spielberg is a member of the DGA?
Presumably, Tom Cruise can quit SAG, the studios hire him directly, and hire a bunch of non-union labor to work around him. Voila... more money for the studios and Tom Cruise.
Unless there is something else.
Posted by: cactus at Nov 11, 2007 8:18:14 AM
Hollywood needs to try some crowdsourcing. Post some script ideas on a Wiki and let the world work on them. I'd bet the shows would be as good as existing fare and they would have a virally generated following from those and those connected to contributors.
Posted by: Tom Kelly at Nov 11, 2007 9:06:39 AM
FYI, youtube has some kind of program where the "stars" actually do become owners.
Posted by: josh at Nov 11, 2007 9:23:57 AM
Oz, Salary caps make paying players a zero sum game, more for the star means less for the average player. The absence of a cap frees up owners to pay everyone more.
Posted by: DJB at Nov 11, 2007 9:32:12 AM
Hollywood craft unions are strong because they're the main way through which workers get health insurance and other benefits. If you're, say, a movie sound technician you're likely to work for several different studios and production companies in the course of a year, never being with any one of them long enough to qualify for benefits even if you were a regular employee. As a result, the union is your employer and your benefits provider. There's little incentive for anyone to try to work outside the union structure.
Posted by: Peter at Nov 11, 2007 10:09:56 AM
Salary caps make paying players a zero sum game, more for the star means less for the average player. The absence of a cap frees up owners to pay everyone more.
MLB players earn substantially more on average than NFL players, which at least in part is due to the fact that MLB has no real salary cap, just a weak "luxury tax," while the NFL has a hard salary cap.
Posted by: Peter at Nov 11, 2007 10:17:40 AM
The reason I see for the WGA being more powerful than other unions is that the WGA represents those that think for a living versus those that just show up and do an assigned task. The later can always be threatened with bringing in a robot to do their job (which should be done more often) while the WGA person can't easily be replaced. Sure the studios can try but the end product will suck. And the difference between sucking and not sucking is multiple millions of dollars so the WGA has a lot of leverage.
Posted by: BlogReader at Nov 11, 2007 11:20:20 AM
Are the top writers actually significantly better at their craft than aspirants? Unions working in professional sports makes intuitive sense to me. In athletics there are decade-long auditions and a variety of different levels, with scouting in between to sort out the best. Even a local (for me) kid like Wes Welker who only gets the chance to walk on at OU can be spotted by a smaller school and eventually wind up a semi-star in the NFL. But I don't believe there are 50 adult Wes Welkers doing shuttle runs around pine cones in their back yards with the hope of breaking in.
But there must be 20 somewhat-serious and talented writers for every employed screenwriter. Even David Mamet wrote a small piece about butchers and garbage collectors with fully-written scripts: we are immersed in the film/TV formula from childhood and still nudge our spouses and say, "he'll end up being the bad guy!" like it is some sort of revelation.
So how hard would it be to replace the writers? Would there really be a drop in quality?
Actors and, to a lesser extent, directors put butts in seats, but there are very few writers (Charlie Kaufman, maybe?) with strong followings.
Posted by: different jeff at Nov 11, 2007 11:24:23 AM
I think the time for the end of their power is much closer than you think. The technology to replace actors and directors is not so far off any longer.
Writing is harder to replace by computer, but one commenter above (Tom Kelly) already has pointed out a solution to this.
Posted by: Yancey Ward at Nov 11, 2007 11:49:44 AM
Presumably, Tom Cruise can quit SAG, the studios hire him directly, and hire a bunch of non-union labor to work around him. Voila... more money for the studios and Tom Cruise.
Where are they going to find good non-union labor to do this? Remember, in order to get work and gain the necessary experience you have to belong to a union, and it makes absolutely no sense to quit just to work on one project. Peter's comment at 10:17:40 gives some good reasons for this.
Posted by: Bernard Yomtov at Nov 11, 2007 12:07:20 PM
I'm sort of surprised, given the advent of digital, that there haven't been more genuine low-budget indie breakouts in film. The hurdles set up for another Kevin Smith seem less daunting. Although I suppose those hurdles were probably instrumental in Smith's success: creating both a compelling back story to push Clerks with and lowering audience expectations for the level of craft, thus making the amateurish elements endearing.
I don't know my economic terms, but there must be one that describes the propensity for audiences to prefer a product backed and hyped by the established system (even if the hype is that a particular film is not part of the system). And I wonder how much Clerks was helped from the publicity of originally receiving an X rating strictly for language.
But other recent attempts to make a new Coke, like Soderbergh and Cuban's same day release of Bubble in theaters and to TV and DVD, haven't really worked. And movies do better on DVD if they were released in theaters, even if they bombed.
It'll be interesting to see what computers bring. I am surprised that Beowulf does not look better. I don't notice a big difference (having only seen trailers) between how it looks and how the Final Fantasy movie from 2001 did. My memory may well be faulty and I have heard Beowulf is impressive in Imax 3-D.
Posted by: different jeff at Nov 11, 2007 12:30:38 PM
Another possibility: if an individual worker gets money from a large number of unconnected projects, each with unpredictable revenue streams and a reputation for shady accounting, the virtues of a standard contract seem like they would be correspondingly larger. You might be able to strike a nominally better deal on your own, but you would have great difficulty ensuring that you got what the contract called for, unless you were making so much that you could hire independent auditors and accountants.
Posted by: Zach at Nov 11, 2007 12:46:20 PM
"Where are they going to find good non-union labor to do this? Remember, in order to get work and gain the necessary experience you have to belong to a union, and it makes absolutely no sense to quit just to work on one project. Peter's comment at 10:17:40 gives some good reasons for this."
Story 1. My wife was a ward-drobe consultant until a few years ago, and still has friends in the industry. She convinced me (on a lark) to "act" in an episode of a "true-life" crime show as a background character. It was not a union job (which is why I was in it) - I got about $15 for four hours of wandering around the set dressed as a cop, plus some half way decent grub. But... I talked to all the main actors and several were union members. Much of the talk centered on a (then) upcoming blockbuster which they had appeared in. Long story short - union members are not supposed to appear in non-union pictures, but they seem to do it anyway.
Story 2. Following my breakthrough role described above, I announced my retirement. A friend of my wife's, an aspiring director/screenwriter, needed someone to play a small role in a film he's making. The part was of a raving lunatic, and naturally he thought of me. Despite my protestations, my adoring fan base insisted I come back once more. Now, I have no talent or skill or desire to appear in anything again, but I understand this is how most real actors/directors/screenwriters/camera people start. That's where the experience comes from.
Posted by: cactus at Nov 11, 2007 1:07:49 PM
Unions are powerful in entertainment because it has been a bottlenecked industry. There has not been (until now) a technological change which greatly increases the numerical possibility of successful entry.
(Unions also survived the old studio system because making entertainment is not only purely creative, it is also socially creative -- and so it tends to generate an astonishing amount of interpersonal emotional connection among the below-the-line workers while a production is going on. Added to the obvious financial needs between jobs, as well as the obvious profits pouring in at the top end, this emotion is a strong propellant for union solidarity.)
The system is dissolving. What people in Hollywood do not appear to realize is that the Internet is finally going to TERMINATE Hollywood's control over distribution to viewers. Web-video will be high-definition and large format, wireless to wallscreens, within 5 years -- or much less, depending upon the next shaping of consumer demand.
This is going to be matched to an automatic advertising system that will send revenue to small-timers too, just breaking in from the antipodes.
So here we will have new distribution and revenue, all taken care of. On the production end of it, technological costs of Hollywood-style production and post-production techniques are already plummeting and will continue to do so. With current cheap computer technology, you can almost shoot "Lawrence of Arabia" in your backyard and add the camels and the sand digitally. All you need is Peter O'Toole. But there's always a hungry young actor working at the local theatre, so who knows what can happen?
For Hollywood, the ending of the high-cost technological bottleneck, in BOTH production and distribution, will end the current system.
It may endanger the unions, although NOT the people in them. In fact, the purely creative people (writers, directors, actors) are going to get together for each project and end up calling all of the shots, because the money is going to go talk directly to them.
Who is going to get hurt? The big media companies, studios, and uncreative producers (distinguishing them from the creative ones) are going to be out of business in 5 to 10 years. They think they'll be needed for advertising -- but on the internet, their names aren't bigger than anyone else's. They still have an ad voice on cable and broadcast, but that will not avail them for very long, if they don't have quality.
The WGA should NOT give in on their demands. This a transition period when the whole game is moving to the internet, and lots and lots of revenue is going to come from what the AMPTP calls "promotions."
Posted by: Lee A. Arnold at Nov 11, 2007 3:35:53 PM
DJB, you may be right if all teams are affected by the cap. If only the richest teams are bound by the cap, then lifting the cap won't mean a proportional increase for everyone. Removing a cap should skew the league's salary distribution further to the right. Weak players on poor teams won't get much of anything. Many players will make the league minimum salary no matter what the status of the cap. It seems to me that those players should be pushing for an increase in the league minimum, for additional roster spots, and for other things like better pensions.
Posted by: yank_in_oz at Nov 11, 2007 3:58:35 PM
Lee A. Arnold:
As I understand it, the writers unions are demanding jurisdiction over content produced solely for distribution over the internet. I wonder if, one day, they could call a strike against (for example) YouTube or Revver...
Posted by: Anonymous at Nov 11, 2007 5:51:06 PM
My late father-in-law was president of the Chicago chapter of the United Federation of Musicians. In the 1940s, this had a very powerful union able to shut down all recording of music for 14 months during WWII, even when FDR asked them to call off the strike for the duration of the war because it was hurting morale of our soldiers, who couldn't get new records.
But, by the late 1980s, after the flood of young musicians who didn't see music as a job but as a path to being a rock star, it's power was restricted mostly to representing elite musicians in the Chicago Symphony and Lyric Opera, much like the professional baseball players union that does lots of good for big leaguers and very little for minor leaguers.
Posted by: Steve Sailer at Nov 11, 2007 6:35:15 PM
Most of the Hollywood unions exist to prevent the situation we see in popular music, where so many people want to be rock stars that they will work practically for free for years (typically subsidized by their parents) in the hopes of becoming a superstar. The vast majority fail and get nothing out of it. In Hollywood, in contrast, once you work your way in to a union, you can actually have a reasonable career that will let you buy a house and raise a family.
Posted by: Steve Sailer at Nov 11, 2007 6:43:26 PM
The technical union members in Hollywood are expensive (e.g., guys who build sets), but the members (with the exception of the despised Teamsters) are typically very good at their jobs. They know their trades, they hustle, and they have good espirit d'corps.
This isn't Detroit in 1973 and the UAW is dragging down American competitiveness vs. the rest of the world. Hollywood is crushing the competition around the world, so what's the problem?
Posted by: Steve Sailer at Nov 11, 2007 6:51:33 PM
I believe that WGA talks broke down over content rerun for the internet, not merely content produced solely for it. This is a big deal because the studios are streaming some shows already and planning to recut others as webisodes. The AMPTP calls it all "promotional" and says the revenue stream is unsure. In fact, they are running ads with the stuff. They said nearly the same thing about cable and then DVD in previous strikes, and the writers fell for it. I don't think it's going to happen this time. What WGA ought to do, in my opinion, is authorize their members to do YouTube stuff now, ask SAG to collaborate, and go to YouTube and ask for revenue sharing right away, as a strike fund. This would scare the hell out of the studios, and give YouTube and Google the boost they need to take the web to the next level. The real problem is that consumers aren't demanding faster connections yet. Once that happens, Google will be worth enough to buy other planets.
Posted by: Lee A. Arnold at Nov 11, 2007 7:45:20 PM
This is a big huge non-issue. Movies will continue to get made because there is profit out there, and to the extent that the unions (and the studios) make stupid decisions affecting market share, independent filmmakers will arise, make names for themselves -- and the cycle will begin anew a la Matrix Revolutions, LOL.
Sounds fine by me. For all you aspiring screenwriters: let's do something with MacArthur and Castro in the same movie, shall we? That's what the people are yearning for.
Posted by: Admiral at Nov 11, 2007 10:09:37 PM
