When streaming really took off a couple of years ago, all of the newbies (studios) saw how many monthly subscribers the tech-based firms were racking up and knew that they knew content better than a bunch of engineers/programmers. At the same time, households had a new freedom from their expensive pay-TV bundle, and they signed up in droves—for everything. Then, fiscal, physical, and mental reality set in, and folks faced the cold, hard reality that too much of a good thing is too much and that a few ads weren’t all that bad. So, balance and sanity are returning.
The Hollywood strikes were painful, for some more than others
“Well, that’s how it is at the retirement home. Company wants to get rid of us old heads. They give all the jobs to you new guys,” —Frank, Unstoppable, 20th Century Fox, 2010
You had to see it coming. The studio and streamer bosses walking away from the “discussions” with the actors’ representatives because the negotiations were “no longer moving forward.”
After nearly 200 days of combined walkouts, they’d heard the same complaints from directors, writers, and actors, that a “living wage” was needed for all of their people, and studios can use their AI technology, just not in their part of the business. And there’s already a litany of similar complaints/demands being prepared by the other nearly 20 union/guild groups that represent the folks who work on films and shows around the country. They’re not alone.
More than 450,000 workers have participated in 312 strikes in the US this year, according to Cornell University’s Labor Action Tracker. That’s more than twice the number of walkouts compared to last year.
For most Americans, financial progress slowed to a crawl over the past decade, with income and wealth inequity soaring. Workers across industries—healthcare, education, services, entertainment—barely made it through the global shutdown of 2019/2020. Higher prices have not kept pace with inflation, falling 2% over the past two years. It has become a major concern for people’s standard of living. Indeed, it costs more to produce and deliver products and services, but it also costs people more to live.
In addition, the top 1% has pulled away from everyone else, even as the entertainment industry was undergoing a seismic shift as it adjusted to meet consumer needs/demands. Movie theater ticket sales managed to increase to about 825.2 million tickets—a slight increase over 2022 but still well below the industry’s peak in 2002. At the same time, pay-TV has slowed its decline, yet the bundle is becoming less important to the home-viewing public. And while pay-TV has experienced a significant drop in paid subscribers, millions of folks continue to rely on it for specific shows, sports, and news. To retain viewership and profits, studios and networks have shifted from scripted shows to less-expensive unscripted reality, game, and competition/contest programming.
Home entertainment has changed dramatically with the rapid growth of streaming services that initially focused on constantly growing their subscriber numbers to show Wall Street they were growing despite a constant flow of red ink. The studio/network reinvention to tech-focused organizations marked a change in the long-standing usage residuals model that creators, producers, writers, and actors (and studios) had used for years to provide professionals with long-term residual income. With an estimated 85% of US households having at least one video streaming subscription, the market is expected to reach $825 billion this year, according to PwC. At the same time, the industry faces consolidation as streamers shift their attention to ARPU (average revenue per user), churn, and profitability.
That means fees will go up for SVOD, and they’ll “work” to guide you to their ad-supported service. Churn? There’s not a d*** thing they can do about it. It’s stuck at 35% for the time being.
The Hollywood executive pay (set by Wall Street/shareholders) mirrored that of corporate America, even as the organizations struggle to be profitable, with wages rising to about 399-to-1, according to recent Economic Policy Institute reports. Their earnings were slightly higher than those of the average Hollywood writer, which remained virtually flat. Film and show writers receive a “decent” paycheck while they’re writing, editing, enhancing, and revising scripts. But it’s the residual payments that tide them over between gigs. Unfortunately, studios/streamers arbitrarily add/subtract shows from their viewing mix, and when they’re “retired,” residuals disappear. In addition, ChatGPT and other AI tools have moved into the writers room, which means fewer and shorter gigs for people.
The median pay for the 11,500 union member screenwriters dropped 14% when adjusted for inflation over the past five years. Studios have also pressed to have fewer writers involved in each project.
In addition to pay increases, WGA wanted to establish guardrails on the use of AI technology, which was strongly being considered by industry executives and managers around the world. At almost the same time, the 171,000-plus actors were seeking a realignment of their residual pay that would pave the way for a more reliable income for members and a stronger professional safety net.
According to the US Bureau of Labor Statistics, the average salary for an actor last year was $27.73 per hour. Most are hired for day work and seldom work a 40-hour week throughout the year. But residuals—the money that tides them over until the next gig—have slowly disappeared. So, unless you’re a one percenter or were able to snag a spot in a series, life’s a hustle.
In addition, and perhaps of greater concern to actors, was AMPTP’s AI proposal that would allow studios to capture voice and image copies of actors, which could potentially marginalize vulnerable performers—background actors—and allow studios to use digital images of the actors, while providing minor project compensation. The idea shouldn’t have come as a surprise to creatives across the board because the industry warned about its use and its potential ramifications years ago when 2001: A Space Odyssey played on the big screen.
Barry Diller, former Hollywood studio chief, suggested a quick solution to the actors’ strike: “The one idea I had is to say, as a good-faith measure, both the executives and the most-paid actors should take a 25% pay cut to try and narrow the difference between those who get highly paid and those that don’t.”
Okay, so that suggestion went unanswered by studios and streamers. Discussions between the two parties continued for better residual contracts until they reached a stalemate and were suspended by studio/streamer management because they were “no longer moving forward in a productive direction.” The dual strikes have cost studios, Los Angeles, California, and the US an estimated $60 billion.
For their part, the one percenters—who probably make more than the top 20 CEOs—joined forces to offer at least a partial solution. To get the two parties back to the bargaining table, A-list actors including Ben Affleck, Jennifer Aniston, George Clooney, and others suggested a dues/streaming residuals reformulation plan, which they estimated would immediately provide a commitment of $50 million to the actors’ health and welfare funds.
Fran Drescher, SAG-AFTRA president, promptly rejected the idea, saying, “I don’t need to emulate male energy to be an effective leader.” However, the offer and perhaps the mounting industry losses did encourage Disney’s Bob Iger to call SAG-AFTRA Executive Director Duncan Crabtree-Ireland for the actors’ union and studios to return to the bargaining table and hammer out a new three-year contract that is equitable to all parties.
The renewed discussions resulted in major changes in revenue sharing for the majority of actors who are not stars and who struggled to make the minimum of $26,470 per year required to qualify for the union’s health plan. The agreement included long-sought-after, success-based streaming bonuses on select shows/movies and a scaled fee on streaming subscribers over the life of the contract. It also included special financial recognition for background performers. At the same time, they substantially enhanced and reinforced the guidelines in the use of AI for an actor’s image/voice in an effort to salvage the 2024 movie and broadcast season.
While AI technology is still in its infancy, both sides worked to define how the captured information could/would be used in the future to provide protection and compensation to the professionals for their likeness and voice. To deliver increased protection to actors’ present and future income, both parties have reinforced, strengthened, and detailed the AI guardrails, including a designated day rate and specified agreement on the usage of the image/voice including written consent on added image usage and compensation. The agreement has finally been signed, affecting not only the directors, writers, and actors, but also the thousands of casting directors, costume personnel, lighting professionals, camera operators, makeup artists, set professionals, and others who are integral members of the content creation teams.
The thousands of men/women who carry out all the tasks required in getting a film/show produced have been idle during the strikes. As a result, they’ve found it difficult to make ends meet and hope they can get back to work soon to recover from the lack of income. Many have moved on to steadier jobs outside the industry. Looking ahead, many of the below-the-line crew contracts will be up for renewal next year, but the pattern and groundwork were established this year and should be faster and easier to get approved by all parties. We can hope…. Unfortunately, there’s no way to compensate the tens of thousands of nonunion—and union—workers who left the industry and the communities.
Many of them have moved on to more stable work environments, even though they reluctantly agreed with Will in Unstoppable when he said, “Well, that’s too bad. I was just starting to like this job.” Despite all of the glamour that is spread around and about the film/show industry, it’s still a tough/rough business that chews up and spits out lots of folks. But for those with the talent, technical/professional expertise, and focused determination, it’s still a helluva way to make a living.