Writers Guild Wants the Government to Keep Disney, Amazon, and Netflix from Getting Any Bigger
Brian Welk
Thu, August 17, 2023
Just as the Writers Guild and the AMPTP are currently at the negotiating table trying to hash out a deal that could end a strike that’s lasted for over 100 days, the Writers Guild of America West has released a blistering new report that calls on lawmakers and antitrust agencies to regulate what it says are anti-competitive practices by Disney, Amazon, and Netflix, specifically.
Pundits and analysts have speculated for some time that, in the near future, only a handful of the many streaming services available today will survive, and consolidation could mean there are just a few media giants left standing. The WGAW’s new report from Thursday, titled “The New Gatekeepers,” believes Disney, Amazon, and Netflix will be those players. And it wants policymakers to act now in keeping them from getting any bigger.
Specifically, it says that to “protect the future of media,” lawmakers must “block further consolidation,” “proactively investigate anti-competitive practices and outcomes,” and “increase regulation and oversight in streaming.”
“Writers being forced to strike in this climate should come as a surprise to no one,” WGAW’s Research & Public Policy Director Laura Blum-Smith said in a statement. “We’re transitioning from a period of rapid investment and competition that brought about new and diverse content to a monopolistic model that will concentrate control over entertainment programming in the hands of just a few large and powerful corporations. For writers, that means fewer buyers for their work, employers who exert more leverage in individual deal negotiations, and depressed pay and working conditions.”
The report kicks off alleging the monopoly that CBS, NBC, and ABC had over TV viewers up through 1970 and how federal antitrust groups had to break up that dominance over the airwaves. But it now says Disney, Amazon, and Netflix are positioning themselves as the next gatekeepers that will soon control all media, and that Wall Street is cheering them on to further merge and squeeze out competition.
“Each is now taking anti-competitive vertical integration to an extreme, turning its streaming service into a walled garden for self-produced content — a model built for and dependent on restricting the availability of independent content from competing producers, underpaying creators, and, above all, making future consolidation the name of the industry game,” the report reads. “Each has demonstrated that it will abuse a position of dominance to disadvantage competing producers and streaming services, reduce output, creativity, and choice in content, and push down wages for creative workers. Unless antitrust agencies and lawmakers prevent future merger activity by dominant firms and step in to preserve and protect the competitive environment for other streaming services, the future of content is in peril.”
Members of the Writers Guild of America picket at The Walt Disney Studios on July 13, 2023 in Los Angeles, California. (Photo by Gilbert Flores for Variety/Variety via Getty Images)Variety via Getty Images
For its analysis of Disney, WGAW looks back at the studio’s $19 billion acquisition of ABC in 1995 as the starting point for its “anti-competitive behavior,” accusing the company of reducing output after gobbling up other studios (such as shuttering the animation house Blue Sky Studios after the Fox acquisition), and further leading the charge of companies pulling back their copyrighted content in order to bolster their own streamers. The report argues that writers and independent producers don’t have a choice to walk away from poor terms as a result of Disney’s vertical integration, especially if they want to work on any of Disney’s tentpole IP properties. It also cites recent price hikes for Disney+ and an analyst report that projects Disney will have 42 percent of all streaming subscribers by 2025.
For those reasons, the WGAW suspects Disney could seek to acquire another competing studio or other major IP. Though for what it’s worth, Disney CEO Bob Iger recently said that ABC and some of its other linear TV businesses are “non-core,” leading to speculation that networks like that or even ESPN could be spun off or sold and that Disney would get smaller, not bigger. Iger was even asked on the most recent earnings call whether Disney itself could be wholly acquired by a tech giant like Apple.
In the case of Amazon, the WGAW didn’t give Jeff Bezos’ company a pass just because it’s new to the media game. It says the company’s “exploitative practices” over pricing, acquisitions, and “abusing” its position between competitors and customers are part of the company’s playbook, including for media.
The guild certainly didn’t like Amazon’s $8.5 billion acquisition of MGM and says Amazon has never produced a show or movie for a service other than itself. But the control it has over its Fire TV interfaces and its ability to extract fees makes it a literal gatekeeper over which services can show their content. The guild cites a media report circa when HBO Max first launched about how new subscribers to the streamer slowed because, for months, it wasn’t available on Amazon devices.
NEW YORK, NEW YORK – MAY 10: Members of the Writers Guild of America (WGA) East hold signs as they walk in the picket line outside of HBO and Amazon’s offices on May 10, 2023 in New York City. (Photo by Spencer Platt/Getty Images)Getty Images
Finally, Netflix, it says has gone from upstart innovator to “powerful incumbent focused on raising prices, vertically integrating, and exerting its dominance over workers.” It says that though it once had a habit of rescuing canceled shows from other networks, that habit has slowed, and seemingly popular shows canceled on Netflix almost never have the same luxury to go elsewhere. It cites the WGAW’s own challenge against Netflix that demanded the streamer pay out $42 million in underpaid residuals, as well as refer to the ongoing fight over data transparency. And it doesn’t approve of Wall Street’s urging to further raise prices and cut costs.
“No longer committed to competitive innovation, the company will slash programming and underpay workers, abusing its dominant position to offer consumers less content—and less innovative content—for more money,” the report says.
The report concludes by saying that there is no regulatory oversight for streaming the way there is for broadcast TV networks, meaning that while Disney couldn’t buy the Fox network in its acquisition, there’s nothing stopping the company from buying out Comcast’s share of Hulu and merging it with Disney+, as Disney seems poised to do. And it also says that Sony, Paramount, and Warner Bros. Discovery are likely not going to remain major competitors for long.
“Paramount is disadvantaged by a comparative lack of scale, Sony by a lack of vertical integration, and Warner Bros. Discovery appears to be already withdrawing from its investment in HBO Max,” the report claims.
Among the guild’s recommendations are that antitrust groups block further acquisitions by Disney, Amazon, and Netflix, including any mergers, that it should investigate competitive practices by the companies, and sweeping new rules need to be put in place around streaming to “level the playing field.”
Brian Welk
Thu, August 17, 2023
Just as the Writers Guild and the AMPTP are currently at the negotiating table trying to hash out a deal that could end a strike that’s lasted for over 100 days, the Writers Guild of America West has released a blistering new report that calls on lawmakers and antitrust agencies to regulate what it says are anti-competitive practices by Disney, Amazon, and Netflix, specifically.
Pundits and analysts have speculated for some time that, in the near future, only a handful of the many streaming services available today will survive, and consolidation could mean there are just a few media giants left standing. The WGAW’s new report from Thursday, titled “The New Gatekeepers,” believes Disney, Amazon, and Netflix will be those players. And it wants policymakers to act now in keeping them from getting any bigger.
Specifically, it says that to “protect the future of media,” lawmakers must “block further consolidation,” “proactively investigate anti-competitive practices and outcomes,” and “increase regulation and oversight in streaming.”
“Writers being forced to strike in this climate should come as a surprise to no one,” WGAW’s Research & Public Policy Director Laura Blum-Smith said in a statement. “We’re transitioning from a period of rapid investment and competition that brought about new and diverse content to a monopolistic model that will concentrate control over entertainment programming in the hands of just a few large and powerful corporations. For writers, that means fewer buyers for their work, employers who exert more leverage in individual deal negotiations, and depressed pay and working conditions.”
The report kicks off alleging the monopoly that CBS, NBC, and ABC had over TV viewers up through 1970 and how federal antitrust groups had to break up that dominance over the airwaves. But it now says Disney, Amazon, and Netflix are positioning themselves as the next gatekeepers that will soon control all media, and that Wall Street is cheering them on to further merge and squeeze out competition.
“Each is now taking anti-competitive vertical integration to an extreme, turning its streaming service into a walled garden for self-produced content — a model built for and dependent on restricting the availability of independent content from competing producers, underpaying creators, and, above all, making future consolidation the name of the industry game,” the report reads. “Each has demonstrated that it will abuse a position of dominance to disadvantage competing producers and streaming services, reduce output, creativity, and choice in content, and push down wages for creative workers. Unless antitrust agencies and lawmakers prevent future merger activity by dominant firms and step in to preserve and protect the competitive environment for other streaming services, the future of content is in peril.”
Members of the Writers Guild of America picket at The Walt Disney Studios on July 13, 2023 in Los Angeles, California. (Photo by Gilbert Flores for Variety/Variety via Getty Images)Variety via Getty Images
For its analysis of Disney, WGAW looks back at the studio’s $19 billion acquisition of ABC in 1995 as the starting point for its “anti-competitive behavior,” accusing the company of reducing output after gobbling up other studios (such as shuttering the animation house Blue Sky Studios after the Fox acquisition), and further leading the charge of companies pulling back their copyrighted content in order to bolster their own streamers. The report argues that writers and independent producers don’t have a choice to walk away from poor terms as a result of Disney’s vertical integration, especially if they want to work on any of Disney’s tentpole IP properties. It also cites recent price hikes for Disney+ and an analyst report that projects Disney will have 42 percent of all streaming subscribers by 2025.
For those reasons, the WGAW suspects Disney could seek to acquire another competing studio or other major IP. Though for what it’s worth, Disney CEO Bob Iger recently said that ABC and some of its other linear TV businesses are “non-core,” leading to speculation that networks like that or even ESPN could be spun off or sold and that Disney would get smaller, not bigger. Iger was even asked on the most recent earnings call whether Disney itself could be wholly acquired by a tech giant like Apple.
In the case of Amazon, the WGAW didn’t give Jeff Bezos’ company a pass just because it’s new to the media game. It says the company’s “exploitative practices” over pricing, acquisitions, and “abusing” its position between competitors and customers are part of the company’s playbook, including for media.
The guild certainly didn’t like Amazon’s $8.5 billion acquisition of MGM and says Amazon has never produced a show or movie for a service other than itself. But the control it has over its Fire TV interfaces and its ability to extract fees makes it a literal gatekeeper over which services can show their content. The guild cites a media report circa when HBO Max first launched about how new subscribers to the streamer slowed because, for months, it wasn’t available on Amazon devices.
NEW YORK, NEW YORK – MAY 10: Members of the Writers Guild of America (WGA) East hold signs as they walk in the picket line outside of HBO and Amazon’s offices on May 10, 2023 in New York City. (Photo by Spencer Platt/Getty Images)Getty Images
Finally, Netflix, it says has gone from upstart innovator to “powerful incumbent focused on raising prices, vertically integrating, and exerting its dominance over workers.” It says that though it once had a habit of rescuing canceled shows from other networks, that habit has slowed, and seemingly popular shows canceled on Netflix almost never have the same luxury to go elsewhere. It cites the WGAW’s own challenge against Netflix that demanded the streamer pay out $42 million in underpaid residuals, as well as refer to the ongoing fight over data transparency. And it doesn’t approve of Wall Street’s urging to further raise prices and cut costs.
“No longer committed to competitive innovation, the company will slash programming and underpay workers, abusing its dominant position to offer consumers less content—and less innovative content—for more money,” the report says.
The report concludes by saying that there is no regulatory oversight for streaming the way there is for broadcast TV networks, meaning that while Disney couldn’t buy the Fox network in its acquisition, there’s nothing stopping the company from buying out Comcast’s share of Hulu and merging it with Disney+, as Disney seems poised to do. And it also says that Sony, Paramount, and Warner Bros. Discovery are likely not going to remain major competitors for long.
“Paramount is disadvantaged by a comparative lack of scale, Sony by a lack of vertical integration, and Warner Bros. Discovery appears to be already withdrawing from its investment in HBO Max,” the report claims.
Among the guild’s recommendations are that antitrust groups block further acquisitions by Disney, Amazon, and Netflix, including any mergers, that it should investigate competitive practices by the companies, and sweeping new rules need to be put in place around streaming to “level the playing field.”
Alexandra Alter
Thu, August 17, 2023
An Amazon Fulfillment center on Staten Island in New York, May 15, 2019.
(Hiroko Masuike/The New York Times)
With mounting signs that the Federal Trade Commission is preparing to file a lawsuit against Amazon for violating antitrust laws, a group of booksellers, authors and antitrust activists are urging the government to investigate the company’s domination of the book market.
On Wednesday, the Open Markets Institute, an antitrust think tank, along with the Authors Guild and the American Booksellers Association, sent a letter to the Justice Department and the Federal Trade Commission, calling on the government to curb Amazon’s “monopoly in its role as a seller of books to the public.”
The groups are pressing the Justice Department to investigate not only Amazon’s size as a bookseller, but also its sway over the book market — especially its ability to promote certain titles on its site and bury others, said Barry Lynn, the executive director of the Open Markets Institute, a research and advocacy group focused on strengthening anti-monopoly policies.
Sign up for The Morning newsletter from the New York Times
“What we have is a situation in which the power of a single dominant corporation is warping, in the aggregate, the type of books that we’re reading,” Lynn said in an interview. “This kind of power concentrated in a democracy is not acceptable.”
The letter, addressed to Lina Khan, the chair of the Federal Trade Commission, and Jonathan Kanter, who leads the Justice Department’s Antitrust Division, comes as the FTC appears to be closing in on its decision to bring an antitrust case against Amazon. Amazon representatives are expected to meet this week with members of the commission to discuss the possible suit, a sign that legal action may be imminent.
Amazon did not immediately respond to a request for comment.
It is still unclear whether the government’s case will scrutinize Amazon’s role as a bookseller as part of its investigation of the company. While Amazon got its start nearly 30 years ago as a scrappy online bookstore, it has since mushroomed into a retail giant that has gained a foothold in other industries, with its expansion into cloud computing and its purchase of the grocery chain Whole Foods and the movie studio Metro-Goldwyn-Mayer.
Even as books have become a smaller slice of the company, Amazon has become an overwhelming force in the book market. It accounts for at least 40% of physical books sold in the U.S., and more than 80% of e-books sold, according to an analysis released by WordsRated, a research data and analytics group. With its purchase of Audible in 2008, Amazon has also become one of the largest audiobook producers and retailers.
The effects of the site’s rise have been profound, Open Markets Institute and the other groups argued, contributing to a steep decline in the number of physical bookstores across the United States, and leaving publishers and authors beholden to the site.
Amazon also has influenced which books readers are exposed to and buy, and has made it more challenging for lesser-known authors to gain exposure on the site, while blockbuster authors and celebrities whose books are likely to sell well are prominently featured.
Some antitrust experts are skeptical that Amazon’s role as a bookseller merits government scrutiny. Erik Gordon, a professor of business at the University of Michigan who studies antitrust, said that while the company’s dominance in the book world might be an element of an overall antitrust suit, the FTC will likely focus elsewhere.
“There’s not a great case against Amazon with respect to their book-selling practices,” he said. “Many publishers and authors are making more money than they would have without Amazon.”
Amazon has already been a target of the Biden administration’s stringent regulatory efforts, as it has sought to rein in tech giants like Amazon, Google and Meta.
In June, the FTC brought a separate case against Amazon that argued the company had manipulated users into signing up for its Prime membership program and made it hard for them to get out of it.
The Justice Department has also shown an interest in preventing the consolidation in the book market. Last year, a judge sided with the Biden administration in an antitrust case and blocked Penguin Random House from acquiring its smaller rival Simon & Schuster.
After the deal collapsed, some in the industry saw Amazon as the next logical antitrust target.
Allison Hill, chief executive of the American Booksellers Association, said that she was hopeful that the government was taking a serious look at Amazon’s role in the book world.
“Amazon has been unchecked for so long that our fight for a level playing field has become moot,” she said. “Amazon owns the playing field.”
c.2023 The New York Times Company
With mounting signs that the Federal Trade Commission is preparing to file a lawsuit against Amazon for violating antitrust laws, a group of booksellers, authors and antitrust activists are urging the government to investigate the company’s domination of the book market.
On Wednesday, the Open Markets Institute, an antitrust think tank, along with the Authors Guild and the American Booksellers Association, sent a letter to the Justice Department and the Federal Trade Commission, calling on the government to curb Amazon’s “monopoly in its role as a seller of books to the public.”
The groups are pressing the Justice Department to investigate not only Amazon’s size as a bookseller, but also its sway over the book market — especially its ability to promote certain titles on its site and bury others, said Barry Lynn, the executive director of the Open Markets Institute, a research and advocacy group focused on strengthening anti-monopoly policies.
Sign up for The Morning newsletter from the New York Times
“What we have is a situation in which the power of a single dominant corporation is warping, in the aggregate, the type of books that we’re reading,” Lynn said in an interview. “This kind of power concentrated in a democracy is not acceptable.”
The letter, addressed to Lina Khan, the chair of the Federal Trade Commission, and Jonathan Kanter, who leads the Justice Department’s Antitrust Division, comes as the FTC appears to be closing in on its decision to bring an antitrust case against Amazon. Amazon representatives are expected to meet this week with members of the commission to discuss the possible suit, a sign that legal action may be imminent.
Amazon did not immediately respond to a request for comment.
It is still unclear whether the government’s case will scrutinize Amazon’s role as a bookseller as part of its investigation of the company. While Amazon got its start nearly 30 years ago as a scrappy online bookstore, it has since mushroomed into a retail giant that has gained a foothold in other industries, with its expansion into cloud computing and its purchase of the grocery chain Whole Foods and the movie studio Metro-Goldwyn-Mayer.
Even as books have become a smaller slice of the company, Amazon has become an overwhelming force in the book market. It accounts for at least 40% of physical books sold in the U.S., and more than 80% of e-books sold, according to an analysis released by WordsRated, a research data and analytics group. With its purchase of Audible in 2008, Amazon has also become one of the largest audiobook producers and retailers.
The effects of the site’s rise have been profound, Open Markets Institute and the other groups argued, contributing to a steep decline in the number of physical bookstores across the United States, and leaving publishers and authors beholden to the site.
Amazon also has influenced which books readers are exposed to and buy, and has made it more challenging for lesser-known authors to gain exposure on the site, while blockbuster authors and celebrities whose books are likely to sell well are prominently featured.
Some antitrust experts are skeptical that Amazon’s role as a bookseller merits government scrutiny. Erik Gordon, a professor of business at the University of Michigan who studies antitrust, said that while the company’s dominance in the book world might be an element of an overall antitrust suit, the FTC will likely focus elsewhere.
“There’s not a great case against Amazon with respect to their book-selling practices,” he said. “Many publishers and authors are making more money than they would have without Amazon.”
Amazon has already been a target of the Biden administration’s stringent regulatory efforts, as it has sought to rein in tech giants like Amazon, Google and Meta.
In June, the FTC brought a separate case against Amazon that argued the company had manipulated users into signing up for its Prime membership program and made it hard for them to get out of it.
The Justice Department has also shown an interest in preventing the consolidation in the book market. Last year, a judge sided with the Biden administration in an antitrust case and blocked Penguin Random House from acquiring its smaller rival Simon & Schuster.
After the deal collapsed, some in the industry saw Amazon as the next logical antitrust target.
Allison Hill, chief executive of the American Booksellers Association, said that she was hopeful that the government was taking a serious look at Amazon’s role in the book world.
“Amazon has been unchecked for so long that our fight for a level playing field has become moot,” she said. “Amazon owns the playing field.”
c.2023 The New York Times Company
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