Business

It’s not the first time that technology has upended Hollywood’s business model–but the WGA-SAG strikes could be the last chance for artists to get justice


In Hollywood, where movies and culture mix, a drama is unfolding that’s not from a script, but from the actions of actors and writers themselves. The Writers Guild of America(WGA) and Screen Actors Guild (SAG) strikes against the film studios are really about an age-old issue in American entertainment­: the disruptive role of new technologies as they periodically upend the established order. The history of film and the film industry has been shaped by the introduction of new technologies, from sound and color to television and video. Today, it’s streaming and artificial intelligence.

In each case, the industry was wary of these innovations. Television and video were both seen as existential threats. And in truth, they were. However, the players who realized that innovations could be employed to create revenue streams beyond the box office saw profits well beyond any that had existed before. 

Once again, we find the entertainment sector in the throes of technology-driven radical change.

For the actors and writers, these issues are fairly straightforward. While streaming companies technically pay residuals to actors and writers, the payments are significantly lower than those generated by films released theatrically or broadcast TV series, given the opaque system used by streamers to allocate revenue to individual films or TV series.

Additionally, the streamers’ preference to limit series episodes to no more than 10 per season significantly reduces residuals for the actors and writers. The specter of AI further raises the question of actors losing control of their likenesses and being replaced by AI-generated characters. Writers may need to share credit with–or lose jobs to–AI-generated scripts. The complication of the recent court ruling that artworks generated entirely by artificial intelligence cannot be copyrighted is easily overcome. Hollywood will merely combine humans into the writing and filmmaking process. 

These strikes also reveal a larger issue: the unfairness that’s been around for a long time. Hollywood isn’t just about glitz and glamour. It’s about the hard work of writers and actors who make it all happen. Now, the industry has a chance to change things for the better–and treat its workers fairly.  

The strikes are revealing how little performers and writers get paid compared to studio executives, many of whom continue to get paid eight and nine-figure salaries even in the face of slumping box office revenues.

Movies start with the ideas of writers who create stories that become our favorite movies and TV programs. But these writers don’t always get paid fairly, especially when their work is shown on streaming platforms. The WGA strikes have revealed the fact that writers can earn as little as three figures for a year’s worth of their work on streaming sites like Netflix.

Actors are striking too, fighting for better pay and better working conditions. This isn’t the first time it has happened. In 2000, actors stood up for their rights–and won.

Who will prevail this time? The strikes are by now imposing real economic pain on actors and writers. But the studios are also feeling the pain. Films scheduled for release in late 2023 and the summer of 2024, the peak periods for the release of high-profile (and expensive) films, are now in jeopardy of missing those release dates, resulting in a significant loss of revenues at a time when the box office was already slipping. All of this suggests that a settlement is near.

Will the artists completely prevail? History tells us that they will not. The strikes will likely conclude with concessions made for higher wages and some remedial promises to actors and writers, but the actual danger is real. Technology is unrelenting. The possibility of unpaid workers (AI) is just too potentially profitable to abandon. Every Hollywood strike that concluded was a win-win for the parties in a way, but the basic inequity never changes. Studios (and now the biggest streamers) will always have the upper hand because they have the deepest pockets and control the industry: They control the money.

In a world where streaming and technology have the potential to change everything, the WGA and SAG strikes are a wake-up call. They are telling those who run the industry to fix things, not just for now but also for the future. We all love movies, and the people who create and make them should be respected and paid fairly. These strikes are like a major plot point, a chance for Hollywood to make things right and show that it values its workers–all of whom create the magic of movies. 

Stephen R. Greenwald has been professionally involved in the motion picture and related industries for over 40 years as an attorney, film financier, corporate executive, producer, and consultant, including as CEO of three public companies in the film business. Greenwald is Of Counsel at the law firm Garson, Segal, Steinmetz, Fladgate LLP.

Paula Landry is a writer, producer, and film business and media consultant who is interested in disruptive business models. Landry crafts feature films and episodic content, business plans, budgets and schedules, as well as branded content for Fortune 500 companies and non-profits. Landry is the president of IdeaBlizzard Productions and author of Scheduling and Budgeting Your Film: A Panic-Free Guide and Applying Entrepreneurship to the Arts: How Artists, Creatives, and Performers Can Use Start-up Principles to Build Careers and Generate Income.

They are the co-authors of The Business of Film: A Practical Introduction.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.


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