The WGA’s Misguided Fears: Unpacking the Myths of Media Consolidation in the Streaming Era

By: Kristian Stout & Geoffrey A. Manne (Truth on The Market)

While last year’s labor disputes between the Writers Guild of America (WGA) and the Screen Actors Guild (SAG-AFTRA) with Hollywood’s major movie and television studios have been settled for months, lingering questions about competitive conditions in the industry remain.

In a recent submission to the California Law Revision Commission, which is currently reviewing California antitrust law, the Writers Guild of America West (WGAW) presented a 55-page document outlining its concerns about media-industry consolidation and alleged harms to workers. This submission followed the WGA’s earlier report, “The New Gatekeepers,” which argued that companies like Disney, Amazon, and Netflix are poised to dominate the industry and systematically harm the talent they employ. Together, these reports paint a dire picture of media-industry consolidation and alleged worker exploitation.

However, these claims fundamentally mischaracterize the current state of the streaming market and fail to appreciate the dynamic, competitive nature of this rapidly evolving industry.

An Industry in Flux

The media industry revolves around two basic activities: creating content and providing consumers access to content. Evaluating the industry’s competitiveness must start with an assessment of content volume and accessibility. By any measure, both have skyrocketed.

The WGAW’s claims of constrained supply and market domination by a few players are unsupportable in the face of today’s content explosion. This unprecedented proliferation of content is available to consumers not only in theaters and on cable networks but also across multiple online streaming platforms and digital-distribution services. The real competition question is whether more content is available to viewers, and the answer—to anyone paying attention—is an unequivocal yes.

Despite the ubiquity of these platforms, monetizing content remains a serious challenge. Media analyst Doug Shapiro explains:

No one really knows what the “steady-state” margins will be on the streaming video business, and no one knows the equilibrium point in the transition. Any precise forecast of industry profits is an educated guess, at best. But the unavoidable answer is that the total profit pie will be smaller.

The lack of profit, from which WGAW members seek a greater share of rents, is not a symptom of a malicious plot to exploit writers; it’s a product of an industry in flux. Indeed, it’s an industry with too much content, too readily accessible to users, to provide all current players positive returns on the enormous investments required to produce and distribute that content. For that reason, as The New York Times’ John Koblin notes, the amount of new television content—while still incredibly high—has recently dropped.

This drop is a result of a broader reckoning inside the entertainment industry. For years, television executives spent billions of dollars on TV series to build out their streaming services and chase subscribers. This spending has been a boon to high-profile writers and producers, who captured eight- and nine-figure deals, as well as to the actors, directors, and behind-the-scenes workers who kept the engine going.

Viewed against the industry’s recent (but unsustainable) peak, the fortunes of some creatives may be waning. But this blinkered view belies the WGAW’s myopic understanding of the market’s evolution, which has understandably focused primarily on the short-term effects on WGAW members. It not only misrepresents the current landscape but also fails to recognize the current state of the industry as a natural stage in its ongoing transformation. The challenges faced by certain parts of the supply chain do not indicate an unfavorable direction; rather, they are symptomatic of an industry undergoing significant change.