How the SAG-AFTRA strike is costing Hollywood billions of Dollars
The Issue
If you have been keeping up with the US news publications over the last few weeks, you would already know that on July 14, 2023, the American actors’ union, SAG-AFTRA, officially went on strike over a labor dispute with the Alliance of Motion Picture and Television Producers (AMPTP). It is important to note that the actors’ union has walked out along with the writers’ union, the Writers Guild of America, who have been negotiating a new collective bargaining agreement for well over two months by this point in time, making it the first occasion since 1960 that both the actors’ and the writers’ union have gone on strike collectively. With this said, AMPTP is now missing two core employment sectors in the movie-filming industry, halting all taping operations for an undisclosed period. What caused such an outrage among the American actors’ and writers’ unions in Hollywood? The answer to this question lies in the inability of all of the involved parties to agree to a new deal, disagreements over streaming service compensations, regulation of self-taped auditions, and finally, the studios’ implementation of Artificial Intelligence (AI) on set for scanning actors’ faces as a means of generating stunts digitally.
Financial impacts on Hollywood’s movie/TV studios
Before getting into the sophisticated figures, which consist of the devastating losses these strikes have equated to, it is essential to mention the significance of AMPTP in this dispute. AMPTP is a trade association representing over 350 television and film-producing firms in labor dispute negotiations. To put into perspective just how devastating this is to Hollywood’s movie-making elites, well over 300 companies have fallen victim to overwhelmingly high losses in potential profits due to this labor dispute. Now, let’s get into the more exciting part, where we will discuss how big of an extent these companies have been devastated. With the announcement of the strike earlier this month, 35 productions have officially been shut down or put on hold, leading to a reported $600,000 weekly loss in potential revenues. Some of the more notable productions among this extensive list include the second season of “Last of Us,” the third season of “Euphoria,” the fourth season of “Emily in Paris,” the fifth season of “Stranger Things,” the sequel to “Spider-Man: No Way Home,” and the second edition of “Dune” to name a few. The Box-Office value for the preceding installments of “Dune” and “Spider-Man” exceeded an estimated $2.3 billion.
Meanwhile, the television shows mentioned above have a combined estimate of over 100 million streams in the preceding seasons of the respective shows. Given the usual trend of the newer edition of a film/TV series amassing a bigger audience than the previous one, coupled with Hollywood’s PR teams’ incredible ability to successfully market their highly anticipated productions, the profits in Box-Office sales would experience exponential growth, which makes the aftermath of this occasion all the more devastating from the economic standpoint for all of Hollywood. As for Hollywood’s top TV shows, such as those mentioned above, streaming platforms such as HBO and Netflix pay studios that produce an estimated annual 14 billion dollars for the official licensing. With the uncertainty surrounding these labor strikes, those licensing contracts with TV show studios have also been temporarily paused upon ratifying a new collective bargaining agreement between the unions and the AMPTP, further adding to the crippling film/TV industry revenue losses. Moreover, all of the productions mentioned previously were set to come out this year or within a year, which is a clear indication that the longer the labor dispute between the AMPTP and the writers and actors’ unions goes on, the bigger the short-term losses get for Hollywood's leading film and television making companies unless a deal can be struck shortly. As for the share value of major TV and film-making companies, an estimated $10 billion loss in potential revenue was reported by multiple sources on the second day of the writers’ strike almost three months ago now, with this figure growing considerably since.
What is next?
It is no secret that the best-case scenario for all agents affected by the labor dispute, including movie/TV series fans, would be a favorable deal being reached in the foreseeable future. If not, Hollywood will continue losing billions of dollars in potential revenue due to premier delays and the inability to generate profits through Box-Office sales. Actors and writers who are less known worldwide will have to look for other gigs to fill the void of a frozen primary income, and the general public will not be able to see anything in the cinemas as a basic form of entertainment. In conclusion, there are no winners in the ongoing situation. Not yet, at least. If the actors manage to bargain more favorable terms for themselves, they are absolutely at a win. The actors’ union has clarified that they are seeking a more significant percentage in returns from streaming service platforms they may appear on. As an outsider looking at their possible side of the argument, can you blame them? Hollywood and the movie industry are one large financial “pie” that everyone involved in any shape or form will try to get a piece of while they can. Regardless of the outcome, this situation is one to watch out for.
Written by Arsen Ashlayev | Proofread by Yasmin Uzykanova
