Now that strikes have ended, the impact on Hollywood is colossal

For the audience, the aftermath is just starting. But for the industry, it has been devastating. Multiple professions crucial to film production and many businesses dependent on cinema found themselves unemployed. The loss of over 45,000 jobs is estimated to have caused a $7 billion setback. Not to mention the long-term damage from this forced halt, which is difficult to quantify and attributed to the arrogance of the Alliance of Motion Picture and Television Producers (AMPTP), representing traditional studios and now Netflix, Amazon Studios, and Apple TV.

When the contracts regulating the working conditions of WGA (Writers Guild of America) and SAG-AFTRA (Screen Actors Guild‐American Federation of Television and Radio Artists) members expired in the spring, the AMPTP proposed new, unacceptable regulations in an industry disrupted by powerful streaming platforms. The challenge was the questioning of the decades-long existing system and the end of royalties that sustained the majority of Hollywood. Writers went on strike in May, seeking serious financial and working condition improvements, including a minimum number of writers per project and protections against salary reductions or increased working hours. SAG-AFTRA was demanding a significant increase in residual payments related to the success of streaming content, with the number of views estimated by a third-party company. Another demand was the increase in salaries to counter inflation, improvements in health and retirement plans, and guarantees regarding the use of artificial intelligence, which is a major concern. Today, technology raises deep concerns among actors about how their image and appearance could be used. Accustomed to relinquishing rights to their voices and physical likeness as characters in video games or theme park animations, they want to prevent this on a large scale with Artificial Intelligence. “The studios and streamers have implemented massive unilateral changes in our industry’s business model while at the same time insisting on keeping our contracts frozen in amber,” National Executive Director and chief negotiator Duncan Crabtree-Ireland said in a statement. “The studios and streamers have underestimated our members’ resolve, as they are about to discover fully.” The studios, facing pressure from Wall Street to cut costs while heavily investing in streaming, had already laid off hundreds of employees, citing financial difficulties, using the same justification as the unions.

Today, the functioning of the AMPTP resembles that of Silicon Valley tech giants, who are not particularly fond of regulations and are even less accustomed to dealings with entertainment unions. As a result, discussions were cut short. An analysis of the organization indicates that studio profits went from $5 billion in 2000 to $28 billion in 2021 (a decrease from $30 billion in 2019). Spending on original content for streaming is expected to reach $19 billion this year, nearly four times the 2019 level. “It’s not for writers to pay for the poor decision-making of companies who decide to pursue expensive mergers or take on large amounts of debt,” said the WGA’s chief negotiator, Ellen Stutzman. “We must negotiate a contract that will live on for decades.”

“It’s not for writers to pay for the poor decision-making of companies who decide to pursue expensive mergers or take on large amounts of debt,” said the WGA’s chief negotiator, Ellen Stutzman. “Those are short-term things that will change, and we have to negotiate a contract that will live on for decades.”

SAG-AFTRA (Screen Actors Guild‐American Federation of Television and Radio Artists) was demanding a significant increase in residual payments related to the success of streaming content, with the number of views estimated by a third-party company. Another demand was the increase in salaries to counter inflation, improvements in health and retirement plans, and guarantees regarding the use of artificial intelligence, which is a major concern. Today, technology raises deep concerns among actors about how their image and appearance could be used. Accustomed to relinquishing rights to their voices and physical likeness as characters in video games or theme park animations, they want to prevent this on a large scale with Artificial Intelligence. “The studios and streamers have implemented massive unilateral changes in our industry’s business model while at the same time insisting on keeping our contracts frozen in amber,” National Executive Director and chief negotiator Duncan Crabtree-Ireland said in a statement.

‘The studios and streamers have implemented massive unilateral changes in our industry’s business model while at the same time insisting on keeping our contracts frozen in amber,’ National Executive Director and chief negotiator Duncan Crabtree-Ireland said in a statement. ‘The studios and streamers have underestimated our members’ resolve, as they are about to fully discover.’

Faced with this rigidity, and for the first time since the 1960s, actors joined writers in July. A common strike that interrupted ongoing productions and brought Hollywood to a complete standstill, preventing actors from shooting and promoting finished films. This led to several major delays for highly anticipated blockbusters such as Dune: Part II, Challengers, and Ghostbusters: Afterlife. Only the films Barbie and Oppenheimer were able to proceed, with actors appearing on TV shows before the summer. A severe blow to the economy of an entire region, leaving over 100,000 people unemployed; a range of affected professions suffered, from directors to cameramen, technical teams to set decorators and costume designers, hairstylists, makeup artists, editors, special effects specialists, composers, and art directors, as well as cooks, drivers, security personnel, and thousands of assistants. This also includes local businesses providing services to the industry, such as costume or set rental companies, public relations officers, poster and trailer creators, and the events industry.

While the WGA (Writers Guild of America) reached an agreement in late September, actors were still at an impasse in early November. Resentment towards top executives with colossal salaries ($50 million for Ted Sarandos, CEO of Netflix, or $27 million for Disney's Bob Iger), minimally involved in crisis management, intensified. To save the ongoing TV season, next year's films, and the cinema business already affected by the pandemic, four top executives - Bob Iger, Ted Sarandos, Donna Langley of NBCUniversal Studio, and David Zaslav of Warner Bros. Discovery - joined the president of the AMPTP in negotiations and gave the union an ultimatum. It was only a few minutes before the deadline, on November 8, that an agreement was reached, providing the first protection for actors against artificial intelligence and a historic salary increase (most minimum salaries will increase by 7%). The agreement also includes a "streaming participation bonus," as well as increases in retirement and health contributions. The union stated that the contract was worth over a billion dollars in total. A relief that the city's mayor, Karen Bass, immediately expressed: "Today’s tentative agreement is going to impact nearly every part of our economy. Now, we must lean in on local production to ensure that our entertainment industry rebounds stronger than ever and our economy is able to get back on its feet."

‘Today’s tentative agreement is going to impact nearly every part of our economy,’ Bass said. ‘Now, we must lean in on local production to ensure that our entertainment industry rebounds stronger than ever and our economy is able to get back on its feet.’

However, the restart will be challenging. Projects need to be sorted, teams assembled, talent recruited, and things set in motion, even as many local businesses have been severely affected and are now operating with reduced staff. Some estimate an industry recovery by 2026 or even 2027, and it may suffer from higher labor costs that could impact spending decisions and lead to further reductions in projects and production budgets.

After Barbie, Oppenheimer, and Taylor Swift, will The Color Purple (with Taraji P. Henson and Halle Bailey), Renaissance, Beyoncé's film, and Wonka (with Timothée Chalamet) save Hollywood?"