The Writers Strike: Don't Expect a Return to the Status Quo

To examine the political dynamics and issues driving the strike Media Financial Management Association MFM sponsored a Town Hall Webinar on August 29 featuring Jonathan Handel a Los Angelesbased entertainment attorney and journalistThe Writers Guild of America WGA representing over 11000 screenwriters went on strike on May 2 2023 and was joined on July 14 by the 160000member Screen Actors Guild American Federation of Television and Radio Artists SAGAFTRA On the other side is the Alliance of Motion Picture and Television Producers AMPTP which represents movie and television producers ranging from legacy studios like Paramount Universal Disney and Warner Brothers broadcast networks like ABC and FOX and newer disruptive streaming services like Netflix Amazon and Apple TVThe writers according to Handel are exhibiting a high level of resolve due both to industry factors and a sense of leverage The first is a resurgence of labor activism that was fueled by the erosion of unions over the past 20 years the Me Too and Black Lives Matter movements and the marginalization of many labor categories in the wake of the COVID pandemicThe rise of big tech and growing inequity in the corporate world the average CEO salary as a multiple of the average worker has swelled from 20x to 400x in the last 20 years fueled further resentment and resulted in unionization at companies like Amazon and Starbucks Consequently the strike is motivated by working and middleclass writers and actors not bigname stars whose livelihoods have been most damaged by inflation This issue is compounded by the fear of artificial Intelligence and its capability to further erode the demand for original writingIn short the writers39 strike is fueled on the Writers Guild side by a tremendous amount of fear and doubt On top of that because there is a dual strike with SAGAFTRA the writers have unprecedented leverage providing additional incentive to dig inOn the production side there is a similar level of fear but for different reasons among legacy companies but not streamers like Amazon or Netflix Despite some massive summer hits cinema box office revenues are still down 20 from preCOVID levels and are unlikely to recover increases in ticket price are not balancing declines in attendanceThe cablesatellitebroadcasting audience characterized as the quotlinearquot audience has fallen below 50 of households for the first time Compounding the problem the linear audience that remains is aging out of the 1849yearold demographic that national advertisers value mostLegacy companies are logically seeking to migrate to streaming but this strategy is fraught with barriers Handel notes that Netflix has a multitude of advantages 1 it had a head start as a streamer 2 it had existing businesstoconsumer relationships as a result of its original DVDbymail service and 3 it was treated as a tech company by investors at a time when the market was willing to pay for growth opportunities In today39s environment not only do the legacy companies39 investable profits pale in comparison to Netflix but they also pay much higher interest rates today than Netflix did in its early stageAs a result of these factors investors expect the legacy AMPTP members to exhibit extremely disciplined fiscal practices which in turn exerts great pressure on the writers AMPTP can argue that its offer of 1 billion over three years is the most generous ever but assuming the equivalent of 11 companies this sum works out to 30 million per year less than the average CEO earns at those companies The Writers Guild argues that this still leaves them behind recent inflationThe strike from a high level seems like a clash of the titans in which all the parties except possibly the streamers face existential threats from audience fragmentation technological change demographic shifts and economic pressure Historically we have never seen such profound changes in filmed entertainmentNuts and bolts issues are being negotiated in the context of this inhospitable environment The Writer39s Guild is resisting the disbanding of writers39 rooms after production they argue that the quotminiroomsquot advocated by the studios disrupt content and deprive new writers of experience On wages the Writers Guild is asking for a 6 increase compared to 5 offered by the studios SAGAFTRA has moderated its demand from 15 to 10Residuals are also a source of contention under the current regime residuals are based on subscribers not viewership so a hit program receives the same residuals as a flop Not surprisingly the guilds are requesting some type of override for successful programs Artificial intelligence is a new frontier that must balance the studios39 need for innovation and economy against the writers39 and actors39 fears that they will be marginalizedEven in the unlikely event the disputes are resolved today production won39t be able to get underway until 2024 and there are no signs that this scenario is likelyWhen asked if the 2023 Writers Strike would do nothing but leave all the parties diminished and hobbled Handel tapped his math computer and quantum background prior to becoming an attorney explaining that quotthe glass can be amp190 empty and amp190 fullquot The media ecosystem has shown remarkable creativity and resilience over the years but it should be clear that the one that emerges from the strike will be dramatically different from the one that preceded itThis article was written by John S Sanders a principal at Bond ampamp PecaroClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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The Writers Strike: Don't Expect a Return to the Status Quo

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The Writers Strike: Don't Expect a Return to the Status Quo

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