Written by Olivia Knapp
Beginning on May 2nd, the Writers Guild of America went on strike, and the Screen Actors Guild joined them on July 14th, 2023. While the screenwriter’s strike eventually ended after 148 days, actors are still on strike. The strike results from years of economic turmoil following the emerging popularity of streaming platforms that make entertainment much more easily accessible to American consumers. Many consumers’ decisions to “cut the cable” and switch to streaming platforms marks the most revolutionary change in the entertainment industry since the mid-1900s when TV programs solely played at theaters became available at home. Top streaming services earn a staggering $30 billion yearly, and the annual CEO salary for these top services has surged to roughly $1 billion (Chan and Cole, 2023). However, writers and actors have not been experiencing the same surge in their paychecks. Approximately 87% of the Screen Actors Guild earns a yearly salary of less than $26,000, which does not even qualify them for health insurance through the union (Ivanova, 2023). Given the vast contrast in earnings, a strike eventually emerged as writers and actors found it more challenging to maintain living standards off their earnings in the unprecedented streaming era.
The strike has cost the entertainment industry roughly $5 billion nationwide, but writers and actors may have been in a worse economic position without this setback (Peter and McIntosh, 2023). The two main concerns of the Writers Guild of America preceding the renewal of a three-year contract with Hollywood studios were the potential impact of Artificial Intelligence and the general decrease in salaries and residual payments.
Some streaming platforms have discussed using Artificial Intelligence to boost their profits even more by replacing actors and writers or decreasing their responsibility in film production. Filmmakers have already started using AI to make actors look younger, remove expletives, and formulate recommendations for viewers. However, some streaming platforms have considered the possibility of having an actor come in on one occasion, then using AI to screen them and reproduce the rest of the images needed for the film, leaving that actor with only a day’s worth of acting and pay. AI has the potential to reduce actors’ pay since it could be used to create a preliminary script that would later be edited by humans (Coyle, 2023). The union understands that AI does not have the same capabilities as screenwriters as of now, but writers are worried that AI’s capabilities may improve in the future, which could significantly change the film industry landscape.
While Artificial intelligence is the newest technological advance affecting the entertainment industry, the relatively recent boom in streaming also poses threats to those working in film. When broadcast television was Americans’ main outlet for film and entertainment, writers and actors were compensated with residuals from reruns of shows and movies they were in or wrote. Freelance work stems from the creative nature of the film industry, and a steady income through residuals made it possible for less popular actors and writers to be financially comfortable between jobs. However, writers and actors can no longer maintain the same standard of living from residuals because determining residuals via streaming services is much less transparent than with broadcast television, where the concrete number of viewers of a rerun of a show or movie is known. With streaming platforms, actors and writers are paid a large sum upfront but don’t reap the benefits of royalties (DePillis, 2023). Popular broadcast television shows like Friends have continually made money with residuals, but successful shows and films only available on streaming services don’t experience the same reality.
The issue of decreased residuals is one of many aspects of the strike that centers the focus of its economic impact on writers and actors, especially in Los Angeles. Twenty percent of Los Angeles’ income comes from entertainment adjacent roles. However, the strike has a broader reach than just the main or most obvious individuals affected. Other film hubs, like Atlanta and New York City, were also impacted. The strike’s geographical impact spread outside of these major cities to states like Montana, where the famous series Yellowstone was being filmed (Wilson, 2023). These economic areas reflect the strike’s even more significant effect: its trickle-down impact on film-related professions.
The trickle-down effect of the strike on other professions impacts both rural and densely populated cities. A film set typically has a 300-person crew—caterers, carpenters, hair, makeup, wardrobe, set designers, designers, and personal assistants—who were also put out of work due to the strike (Feldman, 2023). Beyond the industry professionals needed on set, restaurants, florists, and dry cleaners near studios lost a large customer base during the strike. While actors and writers went, or are still going without, nearly five months of stable, or any, income, they will reap the financial benefits of the agreement achieved from the strike. Yet, professions other than writers and actors impacted by the strike will not see a pay increase from the agreement settled on between the WGA and Hollywood studios.
On September 27th, the Writers Guild of America and the Alliance of Motion Picture and Television Producers reached an agreement in which the screenwriters were granted most of the improvements they were fighting for. While these improvements may not be as extreme as the writers hoped, the two sides compromised. Writers will now be better informed on the success of their shows on streaming services. Royalties have increased overall and are subject to an even greater increase if a movie or show does well (Liu, 2023). In order to protect job security against the dangerous possibilities of AI, studios are now required to hire a minimum number of writers for each project (Flint and Krouse, 2023). In even more recent news, the actors’ strike finally came to an end on November 9th. The specifics of the tentative agreement have not yet been disclosed, but the contract addresses similar issues as the WGA’s contract. The regulations enacted to ease writers about AI and streaming marks both actors’ and writers’ “win” over Hollywood studios and streaming services.
While the SAG-AFTRA and WGA’s win against Hollywood studios marks an increased standard of living for writers, American consumers may pay the price of their success. Despite the pause in filming for many of America’s favorite shows, including Billions, Stranger Things, and The Handmaid’s Tale, the economic burden from streaming, which once fell on actors and writers, may be placed on the consumers. Although costs for compensating writers and actors for their work have increased, streaming services will maintain the same budget. Tangible fees paid monthly or yearly by consumers for streaming services may increase to offset higher labor costs. Consumers may also experience a lesser viewing experience, with increased ads to boost streaming platforms’ revenue. Additionally, consumers may notice less content available since streaming services will have less money to invest in shows and movies (Feldman, 2023). Consumers may not be happy with slightly increased costs to compensate for the effects of the strike, but writers and actors will be much better off in the long run. Although the economic burden must land somewhere, the strike reflects the changing landscape across many industries due to the emergence of new technology.
References
Chan, W., & Cole, T. (2023, May 3). Hairdressers, camerapeople, caterers: the ‘scary’ ripple effect of the Hollywood writers’ strike. The Guardian. https://www.theguardian.com/film/2023/may/02/hollywood-writers-strike-industry-effects
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DePillis, L. (2023, September 1). Impact of Hollywood Strikes on Jobs Goes Beyond the Strikers. The New York Times. https://www.nytimes.com/2023/09/01/business/economy/hollywood-strikes-jobs-report.html
Did Hollywood Writers Get Their Happy Ending? (2023, September 27). The New York Times. Retrieved November 7, 2023, from https://www.nytimes.com/2023/09/27/podcasts/the-daily/writers-strike.html?showTranscript=1
Feldman, D. (2019, March 9). The Hollywood Strike Could Exceed $3 Billion In Economic Fallout. Here’s Why. Forbes. https://www.forbes.com/sites/danafeldman/2023/07/13/how-the-actors-and-writers-strike-will-impact-consumers/?sh=38a6a94c5263
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Ivanova, I. (2023, July 19). Why are Hollywood actors on strike? CBS News. https://www.cbsnews.com/news/sag-aftra-strike-hollywood-union-actors/
Liu, J. (2023, August 9). Hollywood strikes have already had a $3 billion impact on California’s economy, experts say: It’s causing ‘a lot of hardship’. CNBC. https://www.cnbc.com/2023/08/09/hollywood-strikes-have-had-3-billion-impact-on-california-economy-so-far.html
Peter, L., & McIntosh, S. (2023, September 25). Hollywood writers in deal to end US studio strike. BBC. Retrieved November 7, 2023, from https://www.bbc.com/news/world-us-canada-66909250
Wilson, T. (2023, August 10). Hollywood strikes’ economic impacts are hitting far beyond LA. NPR. https://www.npr.org/2023/08/10/1192698109/hollywood-strikes-economic-impacts-are-hitting-far-beyond-la
Writers’ strike 2023: Historic strike ends, impacts Hollywood. (2023, October 19). Los Angeles Times. https://www.latimes.com/entertainment-arts/business/story/2023-05-01/writers-strike-what-to-know-wga-guild-hollywood-productions