Why the Hollywood Writers and Actor’s Strike is Important for America

On July 13th, Hollywood’s actor’s union (SAG-AFTRA) unanimously voted to strike after talks with film studios failed to negotiate a settlement involving residuals and the use of AI in the entertainment industry. This follows on the heels of the existing Writers Guild of America (WGA) strike and sets the stage (no pun intended) for actors to join writers on the picket lines as early as next week.

The last time Hollywood faced two strikes at once was back in 1960 when Screen Actors Guild and WGA members walked off the job in a struggle over residuals from movies sold to TV networks.

Now, both unions are battling over a similar transition, but it’s not over movies being sold to TV networks, it’s now residuals from streaming services offered on such platforms as NetFlix, Disney+, and Amazon (which are represented by the trade association Alliance of Motion Picture and Television Producers).

Writers and actors are also worried about the emergence of AI in both the screenwriting and film spheres. The WGA says writers want more AI regulation and are asking for studios to ban the use of AI to write or rewrite screenplays. They also don’t want their work to be used in the development of AI. 

We’re all familiar with streaming platforms, and since its inception, streaming has created a plethora of series and films, meaning more jobs for writers and anyone employed in the film industry. However, WGA members say they’re making much a lot less money (just 46% of the pay that writers on broadcast TV series make) and working longer hours to catch up with the demands for content.

Traditionally screenwriters and writers have depended on back-end payments, syndication, and international licensing, but these sources of revenue have been phased out by streaming. About 50% of writers are being paid minimum rates, and with studios showing record profits from streaming services, the WGA has had enough.

According to the WGA’s math, streaming industry profits have skyrocketed from $5 billion in 2000 to $28-$30 billion from 2017-2021. Also, customer spending on streaming content grew from $5 billion in 2019 to $19 billion in 2023(dominated by Netflix which reported $6 billion in operating profits in 2021 and $5.6 billion in 2022).

At an “Oppenheimer” promotional event, actor Matt Damon stated: “You have to make $26,000 a year to qualify for your health insurance and there are a lot of people who get across that threshold through their residual payments.” He also added, “There’s money being made and it needs to be allocated in a way that takes care of people who are on the margins.” Incidentally, the Oppenheimer actors all showed solidarity and walked out of the movie’s premiere as soon as the strike started.

Studios are always under pressure from Wall Street to turn a profit, and with the streaming boom, it’s become an issue causing many studios and production companies to cut spending rather than try to attract new customers. Walt Disney Co., for example, is slashing 7,000 jobs, Nelflix has paused growth and Warner Bros. Discovery is also cutting costs to relieve its $49.5 billion debt.

We are all very aware that in a free market economy, Wall Street calls the shots, and loves it when companies cut jobs and salaries to appease stockholders.

This strike is about fair wages and jobs, and many writers and actors are getting increasingly worried about AI. Hollywood studios say that the use of AI raises questions for everyone, but state that the current agreement with WGA already defines writers as people. But the WGA and SAG-AFTRA aren’t so sure. During a recent earnings call, Disney CEO Bob Iger told investors that AI development presents opportunities and benefits to the company.

There is no doubt that a program that can write scripts doesn’t need a paycheck, and it would be a financial boon to studios to use AI.

The issue here is profits, profits for studios, and those holding the purse strings in Hollywood. We know full well that the free market system in America is designed to protect corporations and guarantee them big profits.

What the WGA and SAG-AFTRA strikes mean for America is that unionization is the only safeguard to ensure fair pay, reduce wage gaps, ensure job safety, decent benefits, retirement plan protections, social security protections, and job safety. 

Unions are democratically organized, corporations are not, and that’s why unions are integral to a functional democracy. A Department of Labor study showed that unions boost political participation among members and non-union members, and this participation is converted into an active voice for pro-worker policies in Washington. 

The writers and actor strike isn’t just about Hollywood, it’s about strengthening democracy.