Hollywood Strike Signals ‘Broken’ Media Market, FTC’s Khan Says

The Federal Trade Commission is closely monitoring the Hollywood strikes and policies of streaming services, which have raised concerns that “something is broken in the market,” Chair Lina Khan said.

(Bloomberg) — The Federal Trade Commission is closely monitoring the Hollywood strikes and policies of streaming services, which have raised concerns that “something is broken in the market,” Chair Lina Khan said. 

“We’ve been following what’s happening in Hollywood and the strike,” Khan said in an interview with the podcast The Ankler that aired Wednesday. “Increasingly, we see some of the red flags that suggest the market structure is not actually serving the creators or the ultimate viewers.”

The Writers Guild of America, which represents some 11,500 members nationally, went on strike May 2, seeking higher pay and other changes to a contract they said hadn’t kept pace with the rise of streaming and other technologies. The strike, coupled with one by screen actors that began in July, has largely shut down production of new films and scripted TV shows.

Khan said the writer’s union has been “very active” in sharing its concerns with the FTC. Khan also spoke with picketers outside talk show ABC’s The View in New York last month.

“When you have somebody with a good idea and a viable business built around that good idea, but the market is not rewarding that good idea, it suggests that something is broken in the market and that there may be a competition problem,” Khan said, without indicating any particular actions the FTC would take.

Khan said she had heard complaints that in the streaming era, content creators don’t have access to data about who watches their shows, like they did in the past with broadcast TV ratings. Writers and actors have been asking for more data about what consumers are watching online, and a greater share of revenue from streaming.

In the past, producers and writers had “publicly accountable metrics” that helped determine their compensation and what types of projects they should work on, she said.

In the interview, Khan cited previous regulation of the entertainment industry, such as the Paramount Consent Decrees, which prevented movie studios from owning theaters. “That created a healthier ecosystem than a situation where you have a handful of gatekeepers,” Khan said.

Several striking actors spoke at the FTC’s bimonthly open meeting on July 20, including Desperate Housewives actor Justine Bateman. 

The strike by the writers has already run longer than the union’s previous work stoppage in 2007. Large media companies like Netflix Inc. and Warner Bros. Discovery Inc. have been reporting stronger-than-expected profits as the twin strikes grind on.

The studios have vast libraries, including newly completed films and TV shows, and will rake in billions of dollars in extra cash before longer-term damage from the strikes becomes evident. Similarly, many members of the striking Writers Guild of America and Screen Actors Guild have other jobs outside of Hollywood and face little pressure to compromise.

The FTC shares responsibility for antitrust enforcement with the Justice Department. While the DOJ frequently reviews mergers involving broadcast companies, such as Comcast Corp.’s acquisition of NBC Universal, the FTC has been involved in more recent streaming deals, for example, reviewing Amazon.com Inc.’s acquisition of MGM Studios. 

The Alliance of Motion Picture & Television Producers, which represents big media companies such as Warner Bros. Discovery and Paramount Global, made a new offer to striking screenwriters earlier this week.

–With assistance from Christopher Palmeri.

(Updates with additional details beginning in fourth paragraph.)

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