On the Trappings of Tinseltown / by Nicolas Bejarano

Challenges that Face The AFM/Los Angeles in the Next Decade

Los Angeles is home to the largest entertainment conglomerate in the world. Between LA and Silicon Valley, California leads the sector from both its technological developments and its content creators. Due to this fact, it is unsurprising that the Greater LA chapters of the American Federation of Musicians cater to the musicians whose incomes are tied to the entertainment industry. Despite the many careers tied to the industry, the musicians whose livelihoods depend on movies are a minority of the musician population in the city. The American Federation of Musicians (AFM) Local 47 (the LA Chapter), has been embroiled in negotiations in the hopes of securing a more lucrative contract that reflects a market where DVD sales and theatre releases have been all but absorbed by streaming platforms.

These negotiations have made me think about the long-term viability of the commercial part of the Los Angeles music industry as we face the decade ahead. The analysis I offer is not intended to criticize the AFM, but rather offer an opinion of the challenges that face the industry. I wish the musicians whose livelihoods are tied to the AFM and its contracts with the media conglomerates from the Alliance of Motion Picture and Television Producers Association nothing but luck. While I do not believe that any union will be able to halt the changes that are already underway, I wish them luck in their attempt to protect their livelihoods in the only way they know how.

As I see it, the industry has changed and the main challenges facing Los Angeles’ AFM chapter I will discuss here are: changing fashions in the scoring of movies and TV shows, the current unprofitability of the streaming model, the expansion of expertise to previously inactive foreign markets, a loss in musicians’ loyalty to unions that don’t cater to the careers of a majority of their constituents, and finally the emerging viability of tools like AI and sound libraries.

 

Fashions Changed, Less Movies and TV Shows Use Orchestras

Before moving to California, I often heard Tom Stevens and others talk about the decline in studio work since the late 80s. According to these Hollywood vets, back in the 70s, in any given week 20 full-size orchestras were required at the different studios to provide the soundtracks for movies and TV shows. This means that during any given week up to 80 trumpet players might receive a call to record at a studio. The number of violinists receiving this call was many orders of magnitude larger.

While movie studios offered the best contracts for both working musicians and composers, this reality extended to those musicians recording the soundtracks for sitcoms, dramas, and most TV shows since the advent of the medium. Hollywood’s incessant need for music fueled a massive music industry and made many musicians enjoy revenues unlike those of any freelance musician in the world. Those days of wine and roses were long over by the time I arrived in LA some ten years ago, but they are still within living memory. There is a stark contrast in the wealth accumulated by musicians who were active between 1950–2000 and those whose careers have been mostly active in the last two decades because in that time the popularity of large orchestral scores has declined.

It is hard to imagine a scenario where a studio would commission a large-scale orchestral score for a family comedy in 2024. It is equally inconceivable that they should engage the leading movie composer in the industry for the task. But this was just what Chris Columbus did in 1990 when he tasked John Williams to score Home Alone. Three years later he would engage legendary film composer Howard Shore to score another comedy, Mrs. Doubtfire. These were not revolutionary choices by a daring director or a privilege awarded to him by a studio, this was simply the norm in the industry until that point.

The decline in large musical scores is even starker in television. The orchestral music for hit shows like Seinfeld, Friends, or Big Bang Theory was much reduced when compared to shows produced even a decade or two earlier, and unrecognizable from the lush scores that were the norm in the 50s, 60s, and 70s. As an example, we will contrast the theme songs from hit shows in every decade leading to 2024.

 Even the Simpsons stopped having regular recording sessions in 2017 due to the costs associated with employing a now outdated 35-piece orchestra. Whether musicians and directors feel that music is a crucial component of what makes movies and TV shows special, it is clear that this sentiment is either not shared or not obvious to consumers and producers alike.

 

 Unprofitable Streaming Threatens the Studios Themselves

I am not privy to the negotiations currently underway between the AFM Local 47 and the media conglomerates that make up the Alliance of Motion Picture and Television Producers Association, but I do have some thoughts about the main points the AFM shared on its website. These comments come not as an affront to the negotiations themselves, but simply to highlight some market realities that seem to escape the spirit of the AFM’s communications. As they inform the reader the AFM is attempting to come to terms with the streaming model by negotiating four main issues which have resulted in a significant decline in revenue for Los Angeles studio musicians. The four issues in question are:

·      Residual payments for made-for-streaming content

·      AI protection

·      Increased industry wages

·      Improved working conditions

 

The AFM website states:

Recording musicians performing on soundtracks are making (75%) less on content premiering on streaming platforms. These musicians…are not being compensated accordingly for streaming media…the entertainment industry has fundamentally shifted. Content now premieres primarily on streaming platforms rather than in movie theaters and on [sic] network television.

This shift has resulted in considerably less residual income for musicians, threatening our livelihoods. In essence, the talent bringing scores to life is being commoditized without a fair share of the considerable profits made by companies such as Disney, Paramount, Universal, and Warner Bros. This practice is neither fair nor sustainable.

I sympathize with the shifting conditions facing Hollywood and in turn, the musicians whose careers are linked to that specific segment of the creative economy. The AFM, however, is mistaken if they believe that musicians alone are suffering the dramatic financial impacts created by the advent of streaming technologies. The financial viability of the streaming model was constructed around a unique set of conditions brought on by a global shutdown. At that moment—and with the advantage of immense captive audiences—every studio put all their eggs in the basket of a model that did not show a clear path to profitability. After many negative quarters, it is clear that streaming platforms have thus far been a financial failure for most Hollywood Studios. The losses of the once plump residual compensation contracts that the AFM laments, are but a reflection of parallel situations being experienced by major studios in every single aspect of content creation. The revenue models of old have proven incompatible with a subscription model. As one analyst in an article for the Hollywood Reporter noted “Life is tough for media networks when ad spending falls,” and as direct-to-consumer platforms are mostly built on a model that departs from ad revenue, it is no surprise that life has been tough for all of Hollywood since Netflix crashed the party in 2007.

The value of ads for television and movies has also come into question with the birth of independent internet content creators. The contractual demands of big studios are significantly more strenuous than the ones offered by internet content creators. Coca-Cola can—for example—pay Disney 20 million dollars to include their latest product in their programming or their streaming service. This fee is determined by the tremendous costs that burden Disney. In other words, the 20 million will be necessary to cover many salaries and departments. On the other hand, Coca-Cola can pay a single creator like Joe Rogan or Kim Kardashian 2 million for the same service and often reach more consumers. Rogan or Kardashian are happy to take less for their services because their production costs and other related expenses are relatively insignificant when compared to those of a studio. The ecosystem that funded television is also therefore a more competitive environment than it once was.

 Despite the bullish attitudes of media conglomerate CEOs, the news has become more dire for streaming platforms. The Wall Street Journal reported in January 2024 that “one-quarter of US subscribers to major streaming services…have canceled at least three of them over the past two years…Two years ago, that number stood at 15%.” The initial excitement for projected revenues from streaming services was built on the back of a model where a single company—Netflix—was cornering the entire market and could offer the consumer a significantly cheaper and more convenient alternative to cable, which also did away with the pesky ads that interrupted viewing. It is not even clear now whether streaming platforms represent a good value for money compared to cable when individuals must subscribe to multiple services to satiate their eclectic tastes. To make matters worse the price of individual subscriptions has sometimes doubled in the last 3 years.

 The trends in streaming’s profitability should not discourage the AFM from seeking contracts that reflect the new realities of the industry, but since the dust hasn’t yet settled on whether the model as a whole is profitable it is advisable not to rush to promote an adversarial tone when confronting studios which are facing extinction if their streaming services continue to prove unprofitable. The AFM is demanding a share of the profits from streaming, which except for Netflix remains inexistent. A pertinent example of the massive losses streaming services have represented for studios is Disney+ since the company has mostly remained loyal to the recording artists in Los Angeles. Since its launch, the Disney service has lost the company nearly 10 billion dollars, and the only remotely profitable part of their business is in ESPN, where music amounts to jingles.

 The quick transition of blockbuster films from theatre to streaming may also point to the fact that studios like Disney have been unable to reliably produce revenue-generating films in the post-COVID world. In 2023 it is estimated that Disney lost close to  1 billion dollars at the box office. The company was forced to lay off 3.2% of its workforce, with more likely to follow as the company seeks to cut 2 billion in costs in 2024. These streaming releases are in sharp contrast with the vast revenue generated by movies like Oppenheimer or Barbie, which remained exclusively in theatres for months, and initially hit streaming services with a rental cost. For the most part, the assumption that LA musicians are being robbed of vast profits is in many cases contrary to the revenue potential of disastrously unpopular films.

 

 International Markets Favor Competition

 The relative success of the SAG-AFTRA negotiations is also making Local 47 overestimate their long-term position in the industry as a whole. When faced with the need to generate content for English-speaking consumers, movie studios are limited in their production markets. Although many countries speak English, it is truly only in 5 countries—USA, UK, Canada, Australia, and New Zealand—where a studio could reliably create content. As such this limits a studio’s ability to circumvent the collective bargaining demands of a union like SAG-AFTRA. Moreover, star power still plays a central role in the success of any film or TV show, and an actor like Leonardo DiCaprio or Margot Robbie cannot simply be replaced in a project by unknown talented stand-ins. Such is not the case for music recording for soundtracks.

 It was probably the case for decades that the specialized musicians in Los Angeles were impossible to emulate in any major city. As early as the late 1970s however, London showed the viability of working outside the LA bubble and opened a market where musicians demanded larger upfront payments from studios in exchange for reduced residuals. This has been a continuous trend since the 1970s, and now Eastern Europe is open for business armed with highly trained musicians who are happy to work for contracts that would incense Los Angeles studio professionals. Unlike the case with DiCaprio or Margot Robbie, it turns out the average media consumer is wholly unaware (and uncaring) of the identity of orchestral musicians performing the soundtracks to their favorite movies and shows. Additionally, while the limitations present in generating English-speaking content will limit a studio’s options when outsourcing work, music knows almost no bounds in 2024. Orchestrally trained musicians can be found on every continent, and the contracts that might seem insulting to a US citizen will make even Europeans salivate, not to mention how much more attractive they would seem to musicians in Latin America, Africa, or Asia. This is also true for recording engineers and producers who can now be found in every continent.

 As a final note, studio time used to be insanely expensive before the digital age. Not only was the cost of tape significant, but the expertise required for cutting an album was expensive and localized in only a few cities worldwide. This is no longer the case. Digital technologies permit endless takes, and editing software is portable and available everywhere. Expertise comes at little cost to people willing to seek knowledge on YouTube or online forums. Thanks to this shift, the importance of having musicians who can lay down tracks in a single take becomes a commodity instead of a necessity. This means that LA musicians can easily price themselves out of an industry where extreme accuracy is no longer the most valued commodity.

 

 Union Protections Favor a Small Number of Musicians Making Loyalty Unlikely

 The AFM’s negotiation leverage woes don’t only face international challenges. The Local 47 has strongly prioritized the protection of studio musicians, which makes sense considering they remain the city’s top earners. In 2024, however, only a minority of LA’s musicians have ever been called for a soundtrack studio session, and even fewer live off those calls entirely. As such the wealthiest minority of the musicians that make up the AFM are relying on the long-term solidarity of musicians whose income would be unaffected entirely by the resolution of their conflicts with the media conglomerates that make up the Alliance of Motion Picture and Television Producers Association. The majority of LA musicians would be directly unaffected by the departure of studio work from the city altogether. The median income for a Los Angeles musician is roughly $50,000, while most studio musicians often double this number (not to mention the humongous pension payouts many musicians active in bygone plump years are receiving yearly). This financial divide not only decreases the solidarity among musicians towards those benefiting from lucrative studio contracts but also increases the chances that parallel non-union opportunities find willing participants who see little benefit in belonging to the AFM.

 The Local 47 is also unlikely to have endless national solidarity from the rest of the country’s chapters long-term. Cities like Nashville—which has already earned the moniker Soundtrack City—have long benefited from Los Angeles’ Local 47’s proclivity for impractical contracts. Many American cities would welcome an opportunity to lure studios by accepting conditions like those that dominate Nashville or London. In a quest to force video game companies to pay a “fair share” of their considerable profits, LA lost profits from that industry altogether. As Steve Schnur explained in an article for the Associated Press, “Now…90 to 95% of EA’s scores are being recorded in Nashville, with the rest recorded in London.”

 It is not evident whether Local 47 learned its lesson from the loss of video game revenue which has made Nashville musicians prosper in their own right, but it should cause them pause should they choose to continuously engage the movie studios with a similar strategy.

 

 AI & Improving Sound Libraries

 The AFM’s woes caused by streaming models in 2024, however, pale in comparison to the impacts the industry is bound to experience as AI technologies improve. The unveiling of Chat GPT was the precursor to a cataclysmic disruption to creative industries which is advancing at a speed that was hitherto believed to be decades in the future. Based on the capabilities of GPT 3.5 and the subsequent advances achieved in GPT 4, we can all imagine tools that will render many jobs in the creative economy irrelevant overnight. I can envisage versions of Sibelius, Ableton, or Logic with features that will replace talented orchestrators or editors within the decade. Soon we will be able to prompt such programs to, for example, “write a cue in the style of Miles Davis for a film noir scene,” with astounding results. As if this weren’t troubling enough, it is a safe bet that sound libraries, midi instruments, and orchestration tools will rival live performers within the decade.

 It is not clear from the AFM’s website what they are seeking from studios when it comes to AI protections, but ultimately this is a pointless task of Sisyphean proportions. To my understanding, the protections the AFM seeks are aimed at protecting LA musicians from having their sound and likeness used without their consent through AI. This is laudable, although I predict that while they might keep their likeness private, musicians in other parts of the world will be happy to contribute to the generating of sound libraries and recordings devoid of these protections. I can predict this with almost 100% confidence because there has not been a union, monopoly, guild, or interest group in history that has ever contained the advent of new trends and technologies. Delays to impending impacts cannot ever halt them. Furthermore, innovations and disruptions to a sector rarely come from within the parameters of said guilds. The protectionism inherent in these structures makes them vulnerable to changes that are futile to resist. If LA can force studios to refrain from using AI technologies broadly, it will fail to do so in other markets which will undoubtedly become more competitive and eventually render LA obsolete.

 People have already compiled lists of sound libraries being used to complement the hours of music required for video games, and it is not unimaginable to think that these electronic orchestras will one day replace a bulk of the musicians used in most jingles, games, TV Show cues, or low-budget movies. It is an open secret that many of the musicians who provide sounds for these libraries are AFM Local 47 members participating in so-called “dark dates” unsanctioned by the union. The hypocrisy of this escapes nobody, but like contraband, it is the natural economic result of extreme protectionism.

 The decline of industries with the advent of new technologies resisted by guilds or unions is a story as old as time. By the time the German piano guilds which had rejected the innovations of a young Steinway attempted to compete with his American-made pianos, he had already cornered the market. By the time Eastman Kodak embraced the digital landscape, the once titanic company was a few years from bankruptcy. By the time record labels decided to stop fighting Napster and iTunes, it was too late to negotiate appropriate contracts in a medium they had failed to understand. Surely anyone could come up with myriad examples in any field. It is typically the norm that protectionism only briefly delays the inevitable, and surely renders its proponents unable to face the very competitors they refused to learn about or take seriously.

 

 My Optimistic Predictions Inside the Doom

 Although I value Platonic philosophy, I also believe that its central preoccupation with halting entropy by seeking paradigms that attempt to halt and revert change is both misguided and pointless. My main predictions that the AFM Local 47’s initiatives will at best slow down the inevitable are not presented here with glee. My outlook on the Los Angeles music scene might seem grim…because they are. Los Angeles remains one of the most vibrant cities in the West’s long artistic history, but artistic ecosystems in cities rarely last forever. New York lacks the vibrancy it had in the 1920s or from the late sixties to the late seventies. Paris now is not what it was in the years between the two world wars. Florence and Venice are charming, but not alive in the same way as they were in the Renaissance. Such is the nature of entropy and artistic scenes often become victims of their success, but this does not always doom these cities. The echoes of cultural achievement can sustain a region for centuries so long as pride in an outstanding output can be constantly fed.

 It is the knowledge that great things continue to pop up in unlikely places throughout history that makes me bullish about the future of the arts. The very factors that threaten the survival of the Los Angeles music scene also point to phenomenal opportunities for other cities. The decentralization of the recording industry has already made it possible for artists around the globe to develop within their nations while reaching audiences in every continent. Artists can set up home studios for the cost of a good microphone and recording software. There has been an explosion of self-taught musicians thanks to the internet, and while their knowledge of music theory is extremely lacking in many cases, this has at times led to unique expressions that are difficulted by the conformity of scholastic training.

 I predict that a great many jobs in the creative economy will disappear within my lifetime, replaced by electronic tools that will replicate tasks with remarkable ease. Orchestrators, copyists, jingle composers, audio engineers, assistants, and a large chunk of music studio performers will lose their jobs. Not unlike carriage builders, horseshoe makers, sail makers, and boat tarring teams, many once essential careers will become anachronistic and unnecessary. Within the recording industry, the once lucrative careers enjoyed by the experts in charge of cutting tape have already become an oddity. Despite the disappearance of many jobs, I predict that true creative minds will find in emerging technologies and open global markets the tools that feed their insatiable production.

 Using the movie music industry as an example, one can find cause to be optimistic. Composers like Hans Zimmer employ small armies of talented musicians to execute their concepts. This type of infrastructure has been impossible to recreate for up-and-coming talents until now. Within the decade, however, AI tools will give a young composer access to the same arsenal for a yearly fee that would fail to cover the salary of a single human employee. This invaluable access to productivity tools hitherto only available to big media conglomerates will allow for an explosion of creativity fueled by otherwise untappable potential. Additionally, movie producers and directors will continue to rely on the expertise of the creative people prompting the AI tools. As an LA-based film composer told me recently, “Film directors are often paralyzed by uncertainty when it comes to their work, the bulk of a composer’s job is to interpret a director’s work and score it accordingly.” AI tools are just that, tools. But they will for the foreseeable future continue to rely on skilled, creative artists to give them the appropriate prompts to create. Hans Zimmer’s many employees might be replaced by a computer, but he certainly will not.

 If the introduction of the pianoforte expanded the access to music in every home, I can see a scenario where an ever-expanding community of amateur and professional creators will thirst for live concerts, groundbreaking art, and experiential gatherings. After all, amateurs are often the most interested consumers of professional products. It is their surface knowledge of the difficulty behind a process that fuels their appreciation for the astonishing creativity behind meaningful works of art.