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Hollywood Strike: A Battle for Residuals and AI Rights

Hollywood studios are now facing a significant setback as they confront their first dual work stoppage in 63 years. The ongoing strike by approximately 11,500 writers has resulted in the halting of numerous productions across the United States and abroad. Late-night television talk shows are airing reruns, the fall TV season has been disrupted, and work on big-budget movies has come to a standstill.

This major strike in Hollywood was initiated by the US actors’ union, SAG-AFTRA, after failed negotiations with the Alliance of Motion Picture and Television Producers (AMPTP). This strike has garnered significant attention due to the involvement of A-list actors and the crucial issues at stake. Let’s delve deeper into the details of this strike and its implications for the industry.

Who is on Strike?

SAG-AFTRA, officially known as the Screen Actors Guild-American Federation of Television and Radio Artists, is demanding greater residuals and increased base pay for actors from streaming services. The strike encompasses tens of thousands of actors, including those who receive significantly lower pay for minor roles compared to A-list colleagues.

The union represents around 160,000 members, consisting of actors in film and TV, video game performers, radio presenters, models, and YouTube influencers. Notably, prominent actors such as Meryl Streep, Jennifer Lawrence, Charlize Theron, Joaquin Phoenix, and George Clooney have lent their support, emphasizing the significance of this movement. 

This strike follows the recent Writers Guild of America (WGA) strike, which saw TV and movie writers leaving their writers’ rooms to participate in picket lines. The Screen Actors Guild is now pushing for a new contract with the AMPTP, leading to the initiation of the strike after failed negotiations.

The current strike by both the writers’ and actors’ unions in Hollywood marks the first time since 1960 that these two unions have simultaneously taken to the picket lines. During that previous strike, actor Ronald Reagan, who would later become US president, led the protests. The writers have already been on strike for 11 weeks, and the length of Hollywood strikes in the past has varied greatly, ranging from a few months to just over three hours.

What Are The Demands and Challenges?

The main points of contention include residuals for streaming services and the rights of actors in relation to artificial intelligence (AI).  Residuals, which involve payments to performers for repeat showings of films or TV shows, are a vital component of their income. Traditionally, residuals were paid for repeats on terrestrial TV channels, but streaming services have introduced new complexities to this arrangement.

Sag-Aftra negotiators are seeking residuals based on viewership levels on streaming platforms, but the studios, including major streamers, like Netflix, Amazon, and Disney, are reluctant to disclose this information. This lack of transparency poses challenges in determining fair compensation for actors.

The issue of AI usage in the industry has also been a point of contention. The AMPTP proposed a contentious plan related to AI, suggesting that background performers’ scans and likenesses should be owned by their respective companies without consent or compensation. Sag-Aftra swiftly dismissed this proposal, highlighting the need for comprehensive rights and protections for actors in the face of AI’s potential impact. 

The Alliance of Motion Picture and Television Producers (AMPTP) expressed disappointment with the strike, highlighting the financial hardship it will cause for the industry and the countless people who depend on it.

Bob Iger, CEO of Disney, expressed his concerns about the strike, stating that both the writers’ and actors’ unions have unrealistic expectations. He emphasized the timing of the strike, which comes at a challenging period for the entertainment industry as it recovers from the COVID-19 pandemic. The additional disruption caused by the strike exacerbates the industry’s struggles with ongoing changes to its business model.

How Does Streaming Affect The Industry?

The rise of streaming platforms has revolutionized the entertainment industry, disrupting traditional means of distribution and revenue generation. Streaming services have shifted the focus from mid-budget movies and linear TV series to subscription-based models. However, the absence of clear viewership data for streaming content has made it difficult to establish fair residual rates. This issue becomes increasingly critical as streaming platforms attract larger audiences and potential residuals grow significantly.

What Are The Implications Of The Strike?

The ongoing strike has sent shockwaves through Hollywood, serving as a significant moment for the industry. Sag-Aftra’s determination to fight for fair residuals and protect actors’ rights in the age of AI demonstrates the growing concerns regarding the changing landscape of entertainment. The resolution of this strike will not only shape the future of compensation models for actors but also set precedents for the industry’s engagement with streaming services and emerging technologies.

The strike poses significant challenges for films in production, making a substantial portion of work impossible to continue. Even completed films may face obstacles as actors become unavailable for re-shoots and other essential aspects of the filmmaking process. TV shows that are currently filming will also experience significant disruptions, although there may be some cases where side deals are negotiated to allow work to proceed.

The financial impact of a Hollywood strike is significant and difficult to quantify due to the vast number of businesses tied to the entertainment industry, ranging from accounting to catering to transportation. In the previous writers’ strike 15 years ago, which lasted 100 days, the estimated financial loss was over $2 billion, averaging around $20 million per day. Adjusted for inflation, this amounts to close to $30 million per day in California alone.

When Will The Hollywood Strike End?

The duration of the strike remains uncertain, as it largely depends on the progress made in negotiations between  SAG-AFTRA and the AMPTP. Both parties must find common ground on residual payments, AI rights, and other crucial aspects to reach a favourable agreement. Until then, the strike will continue to disrupt film and television productions, potentially causing delays in upcoming releases. The return of actors to the screen will hinge on the resolution of the strike and the subsequent resumption of production activities.

SAG-AFTRA president Fran Drescher expressed openness to continuing negotiations with the studios during a press conference, stating that it is up to the studios to engage in meaningful discussions that honour the work of the unions. However, industry analysts predict that these strikes will likely persist until the fall, as both sides consider the issues at stake as existential and hold deep-seated bitterness. As negotiations continue, the outcome of this strike will shape the future of the industry and set a precedent for how Hollywood adapts to the evolving landscape of entertainment.