As the entertainment industry struggles to adjust to seismic shifts brought on by the global streaming TV boom, thousands of writers for film and television will begin a strike on Tuesday, causing chaos in Hollywood.
After failing to strike an agreement for greater compensation with companies including Walt Disney Co (DIS.N) and Netflix Inc (NFLX.O), the Writers Guild of America (WGA) declared its first work stoppage in 15 years. The previous strike cost California's economy more than $2 billion and lasted 100 days.
"The companies' behavior has created a gig economy inside a union workforce, and their immovable stance in this negotiation has betrayed a commitment to further devaluing the profession of writing," the WGA said in a statement on its website.
About 11,500 writers are represented by the Guild in cities like New York, Los Angeles, and elsewhere.
It was planned for protesters to begin picketing outside Hollywood studios on Tuesday afternoon.
The studios' representative, the Alliance of Motion Picture and Television Producers (AMPTP), stated late on Monday that it had made "generous increases in compensation" to writers but that the two parties had been unable to agree.
The economic environment for media companies is challenging. Wall Street is pressuring conglomerates to turn streaming services profitable after they spent billions on programming to draw customers.
As traditional TV viewership declines and advertisers shift their business elsewhere, the growth of streaming has resulted in a decline in television ad income. In addition, the prospect of a recession in the biggest economy in the world looms.
The last WGA strike, which occurred in 2007 and 2008, cost the California economy an estimated $2.1 billion as a result of production ceasing and spending reductions by unemployed writers, performers, and producers, Reuters reported.
Producers were prepared to increase their offers of higher pay and residuals, the AMPTP said, but were "unwilling to do so because of the magnitude of other proposals still on the table that the Guild continues to insist upon."
The primary sticking points, the group said, were proposals that "would require a company to staff a show with a certain number of writers for a specified period of time, whether needed or not."
The WGA countered that the studios' responses to its proposals "have been wholly insufficient, given the existential crisis writers are facing."
"The companies have broken this business. They have taken so much from the very people, the writers, who have made them wealthy," the Guild mentioned.
In part because of the shorter seasons and lower residual payouts, writers claim that the surge in streaming TV has negatively impacted their financial situation.
According to Guild figures, half of TV series writers now earn less than the federal minimum wage, up from one-third in the 2013–14 season.
The median pay for scribes at the higher writer/producer level has fallen 4% over the last decade.
An additional topic on the negotiation table is artificial intelligence. The WGA wants protections to stop studios from generating new scripts using AI from previously written scripts. Additionally, writers want to make sure they are not asked to rewrite AI-generated script drafts.
There will be occasional interruptions to TV programming while the disputes are being settled.
The creation of late-night programs like "Jimmy Kimmel Live" and "The Tonight Show with Jimmy Fallon," which employ teams of writers to create topical gags, is anticipated to cease immediately.
This implies that neither the streaming sites where new episodes are typically made available the following day, nor the usual TV time slots, will have new episodes.
In the future, the strike can cause the autumn TV season to be postponed. It usually begins in May or June to write for fall productions. The networks will gradually fill their schedules with unscripted reality shows, news magazines, and reruns if the work stoppage lasts a long time.
Due to its focus on the world and access to production facilities outside of the United States, Netflix might be protected from any immediate impacts.
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