Officials with the Writers Guild of America (WGA) have accepted an invitation by a group representing major film and television studios, broadcasters and streaming platforms to meet on Friday, according to numerous media reports.
The meeting would be the first time the WGA and the Alliance of Motion Picture and Television Producers (AMPTP) have held discussions since at least early May, when more than 11,000 union-backed writers began a prolonged work stoppage after a collective bargaining agreement between the two groups lapsed.
There is no promise that the meeting on Friday will lead to an agreement, or even a restart in negotiations. But a message sent to WGA members by a union official confirmed the group's chief negotiator, Ellen Stutzman, will sit down with AMPTP President Carol Lombardini, and officials at AMPTP have said they want to work out a mutually beneficial deal, according to Reuters.
The strike started on May 2, and caused an immediate disruption in the production of daily and weekly shows that are broadcast by major networks and offered to streaming services. Programs like Comedy Central's "The Daily Show" and NBC's "Saturday Night Live," which rely heavily on comedic writing based around current events, took an indefinite hiatus.
Shows and films with fully-written scripts were allowed to continue production once the strike began, only for those programs and movies to face the same disruption weeks later after the Screen Actors Guild - American Federation of Television and Radio Artists (SAG/AFTRA) announced it was striking as well.
Both strikes center around common themes, including better pay and benefits, as well as a re-working of residuals to account for a shift in viewer habits toward streaming services. Historically, writers and actors have earned less in residuals from shows on streaming services compared to those aired on broadcast and cable networks.
Writers and actors also want key concessions over Hollywood's use of artificial intelligence (AI) tools — writers want to know their work opportunities and standards won't be undermined if Hollywood incorporates more AI tools into their productions; actors don't want film and TV studios to use so-called "digital doubles" unless they are willing to compensate actors whose likeness is captured by AI programs.
The last time writers and actors performed a joint work stoppage was 1960. VHS tapes were 16 years away from being invented. There was no Fox network. Computers spanned the entire length of a small office. AT&T was still selling telegraph service.
The strikes of yesteryear largely centered around better income, including residual payments. SAG (which didn't merge with AFTRA until 2012) picketed for about five weeks, while WGA held firm for nearly five months. Both sides won key concessions on residual payments, though they were also forced to drop a few demands in the process.
In retrospect, the issues facing writers and actors then seem less complicated than today's sticking points, which largely center around emerging technology that few could have dreamed up six decades ago. While ChatGPT and other machine-learning tools have shown business executives and consumers the potential of AI-powered products, it has caused a chilling effect among professional content creators who feel their livelihoods are now at stake.
Streaming has also been a major disruptive force, particularly in television. In the past, broadcast and cable networks approved scripts in January, with the goal of having a few pilots ready to show to prospective advertisers during the upfronts. If all went well, a few series would be picked up, and both writers and actors would know by the late spring or early summer if they were committed to a show.
That, for the most part, doesn't happen anymore. Netflix and Amazon, which operate the two biggest global streaming services by subscriber count, produce new shows whenever they want, and debut new series and seasons throughout the calendar year. The broadcast networks — ABC, CBS, Fox and NBC — have their own streaming services, and have started to launch their own shows using the same strategy. For writers and actors, the random production and distribution scheduling means they often have to risk committing — or not committing — to different projects because they aren't sure when, or even if, a series will be approved.
Series that are approved tend to have shorter seasons, with the average series running 10 to 12 episodes per year. That is substantially different from the 20-plus episodes that used to run on network television; writers complain the shorter seasons mean less upfront and residual revenue.
Film writers and actors face similar problems. In the past, scriptwriters and actors could rely on movie studios to approve projects during various cycles. While summer blockbusters are still a thing, the film cycle has been disrupted by streaming, too, with services debuting — and re-using — theatrical films on a regular basis.
Theatrical debuts used to make or break a bank account for an actor. While some films still generate enough buzz to put people in the seats, fewer people are going to cinemas these days (cost is one reason, as is a desire to watch movies at home, according to a survey reported last year by Forbes).
Increasingly, people are turning away from broadcast networks and movie theaters in favor of streaming services — apps like Netflix, Prime Video and Disney+ offer thousands of content options, the flexibility to watch on dozens of different devices and are priced relatively affordably (to the point where around 50% of consumers are paying for services they don't even use).
While streaming services may be good for consumers, writers and actors say their situation is different. WGA members are entitled to a minimum salary for their work, but the overall payout tends to be less if the show or film is for a streaming service (one writer said she recently received a residual check from Apple for just $8). Actors have a similar predicament, with upfront and residual payments substantially lower for shows on streaming services compared to traditional television broadcasts.
The situation is also precarious for major media firms, nearly all of whom have faced challenges in the business of streaming. Of the four major broadcast network owners, three — Comcast's NBC Universal, Disney and Paramount Global — operate premium streaming services that have attracted tens of millions of users, but have yet to turn a profit.
In early May, Disney reported its streaming business lost $659 million during the first three months of the year, while Paramount said its streaming business resulted in a financial loss of $511 million. Both companies report their second quarter earnings next week. Last month, Comcast said its streaming service, Peacock, lost $651 million during its most-recent financial quarter; the company predicts its streaming business will incur a year-round loss of $3 billion by the end of 2023.
The broadcast networks are not alone: On Thursday, Warner Bros Discovery affirmed that its streaming business lost $3 million during the three-month period that ended June 30, despite reaching nearly 100 million subscribers who brought in $2.73 billion in streaming-related revenue.
Part of that loss is of the industry's own making — major media companies spent too much money producing content in pursuit of popular titles for their streaming services, and wound up with more duds than hits. And some of it isn't: The global health pandemic forced a similar work stoppage for two years that, from which the industry is still trying to bounce back.
In the minds of media executives, a dual strike only exacerbates the problem. "This is the worst time in the world to add to that disruption," Disney CEO Bob Iger said during a television interview last month.
"We managed, as an industry, to negotiate a very good deal with the directors guild that reflects the value that the directors contribute to this great business," Iger continued. "We wanted to do the same thing with the writers, and we’d like to do the same thing with the actors. There’s a level of expectation that they have that is just not realistic, and they are adding to the set of the challenges that this business is already facing. That is, quite frankly, very disruptive."
One way the strikes have been disruptive is to the fall television schedule across the networks. While broadcasters churn out fewer hits for linear television, they still commit to compiling a fall line-up — and, at least this year, the networks are leaning heavy on reality shows, news, sports and re-runs.
Streaming services are seeing less of an impact in terms of content, though that could change if the strikes continue for several months. On a conference call with investors last month, Comcast President Michael Cavanagh said Peacock was mostly insulated from the effects of the strike for the rest of this year, but that a longer strike "could have an effect as you look into 2024 and beyond — and that would be for ourselves and others."
Impact to advertising
Advertising, though, is another story. Since May, executives in Hollywood and on Madison Avenue alike have expressed concern that a lack of fresh content from the fall months onward could result in marketers pulling back on ad dollars, despite upfront commitments. Marketing budgets are already tight due to various macroeconomic conditions, including fears of a looming recession, and the dual strikes only compounds the problem for traditional media companies who rely on that revenue.
While a growing share of ad dollars is shifting from traditional television to connected TV, the situation still isn't great for companies like Disney and Paramount who operate ad-supported versions of their streaming services. Some experts think one or more prolonged strikes that affects content production could ultimately convince streaming subscribers to ditch their service — which would result in less exposure for connected TV ads.
"If you’re totally dependent on new content being delivered — of which there are quite a few streamers that are — and that drives the bulk of your viewership, we would expect to see more subscriber churn, we expect to see flat, if not declines, in total viewership," Kelly Mets, the managing director for Omnicom Media Group, told the website Marketing Brew.
Studios and distributors don't want that to happen.
"We remain committed to reaching a fair deal as soon as possible so we can get back to doing what we do best, which is making great content together," Cavanagh said.