Hollywood Strike: Here’s why actor and writer unions are protesting; know its impact on films and financial losses

In an unprecedented show of solidarity, Hollywood's two major unions, the Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) and the Writers Guild of America (WGA) have jointly gone on strike for the first time since 1960. The joint strike has resulted in actors, writers and other technical crew members to stop working across the $132 billion-worth movie making industry. 

Following failed negotiations with the Alliance of Motion Picture and Television Producers (AMPTP), which is the body that represents major studios like Disney, Netflix, and Amazon, the decision for the joint strike was taken by both SAG-AFTRA and WGA. The unions expressed disappointment at the responses from the studios, labeling them as insulting and disrespectful.

While the writers’ strike started on May 2, 2023, SAG-AFTRA members joined the picket lines on July 15, after the contract between SAG-AFTRA and AMPTP ran out on June 30. In terms of union consensus, 98 per cent of the union members agreed to strike. 

The Core Issues: Pay, streaming, and use of AI

The current Hollywood strike primarily seeks to address issues related to pay, residuals, streaming, and the future use of Artificial Intelligence (AI) in filmmaking. The primary demands from the unions include improved wages, better working conditions, increased benefits, and transparent practices from streaming services. 

The actors and writers are also demanding clarification and assurance on the use of AI in future productions, an issue that adds a distinct modern twist to this labour dispute. With generative AI already capable of generating scripts, the WGA has asked studios to not allow scripts solely written by AI, not to use AI models, and finally not to pay writers less if they use the aid of AI to write scripts. 

On the other hand, SAG-AFTRA was also protesting against some dystopian proposals from Hollywood studios over use of AI. Hollywood studios had initially offered a contract to SAG which allowed studios to own the digital likeness of actors in perpetuity. If the point had been accepted, it could have led to studios using VFX, and new AI use-cases like deep fakes, to generate the digital likeness of actors who had retired or even died. 

The unions perceive the studios' prioritisation of Wall Street and greed as detrimental to their members' welfare. They have criticised this focus as putting the studios on the wrong side of history. The dissatisfaction of actors and writers is especially poignant in the era of streaming, where the unions argue that their members are not receiving fair compensation from these new platforms.

“We are the victims here. We are being victimised by a very greedy entity. I am shocked by the way the people that we have been in business with are treating us. I cannot believe it quite frankly, how far apart we are on so many things. How they plead poverty, that they’re losing money left and right, when giving hundreds of millions of dollars to their CEOs,” said SAG-AFTRA president Fran Drescher. 

Big stars join the strike

Several high-profile Hollywood figures have publicly aligned themselves with the ongoing strike. This commitment from leading actors and writers signifies the seriousness of the issues at hand, and the willingness of even the industry's biggest names to put their work on hold in support of fair pay and working conditions.

Prominent actors openly expressing their support to strike added considerable weight to the movement prompting widespread media coverage and public discussion.

Well-known Hollywood stars like Jennifer Lawrence, Ron Perlman, John Cussack, Viola Davis, and many others have come out publicly in support of the strike. In an interesting moment, the cast of Christopher Nolan’s ‘Oppenheimer’ walked out of the red carpet premiere of the movie as the news of the strike broke. This included stars like Cillian Murphy, Emily Blunt, Matt Damon, Florence Pugh, Robert Downey Jr, Kenneth Branagh and Rami Malek. 

Impact on work in hollywood and financial losses

The joint strike by the actors and writers unions has brought much of Hollywood's bustling activity to a standstill. With the cessation of numerous film and TV productions, the usually dynamic industry is experiencing an unfamiliar pause. Several Hollywood blockbusters like the sequels for Avatar, Mission Impossible, Deadpool and more have been impacted. 

Actors are also restricted from promoting past projects and participating in Emmy Award campaigning, among other activities. Similarly, writers are abstaining from their usual tasks, amplifying the impact on ongoing and future projects. This has meant that events like the San Diego Comic Con, scheduled to be held from July 20 to July 23 will see a reduced panel. 

The Hollywood strike's financial impact is significant, with halted film and TV productions causing a ripple effect throughout the entertainment industry. This disruption stands to cause considerable financial loss, particularly when considering the high cost of maintaining production infrastructure without generating new content. Analysts estimate that the strike is a potential $3 billion hit to the economy. 

Moreover, the loss extends beyond the immediate industry. The halted productions are likely causing economic stress to related businesses, including local economies that rely on the entertainment industry.  The WGA strike was estimated to cost approximately $30 million a day to the city of Los Angeles. 

Reaction of hollywood executives

The response from Hollywood executives has been mixed. Some executives have expressed disappointment at the unions’ decision to go on a strike, with claims that the action will exacerbate financial hardships caused by the changing media landscape. For example, Disney's CEO, Bob Iger, labeled the unions’ expectations as unrealistic.

However, the Alliance of Motion Picture and Television Producers (AMPTP) that represents major Hollywood studios maintains that they have made substantial offers to address the unions' concerns, suggesting a disconnect between the studios' perceived generosity and the unions' assessment of these offers.

Reports indicate that the AMPTP is going to be playing hard ball in terms of negotiations. Senior industry executives will be looking to draw out the strike till October so that union members will be more amenable to their contracts.  

With inputs from agencies