The two central bones of contention in the current Writers Guild of America strike against the Alliance of Motion Picture and Television Producers are technology-driven: the rise of streaming and the looming unknown role that artificial intelligence will play in the creative process. SAG-AFTRA could go on strike over similar concerns.
Technological innovations have been at the heart of several strikes in Hollywood history, resulting in some of the longest weeks of strikes. The question now is whether the current strike, which has lasted two months, will be more difficult to resolve than previous industrial action.
When coaxial cable first connected New York and Washington, DC in 1946 and network television emerged in the post-war era, few other than MCA’s Lew Wasserman were savvy enough to understand the value of reusable content like old movies. In 1960 everyone else was hip. That year there were two strikes, one after the other SAG (43 days) and the other from WGA (153 Days) on the new economic realities of television: residuals and payments for reruns of shows and screenings of films originally produced for theatrical release. Guilds were looking for a Payment structure for productions and compensation for members who worked on films before the advent of television.
Twenty years later there were two more long strikes: SAG/AFTRA shouldered signs for three months beginning in the summer of 1980; The following spring, the WGA stamped on sidewalks for three more months. The issues at stake were payments and balances in the booming home video and pay-tv markets. Both were fledgling technologies that were evolving fast enough to require compensation policies. In the early 1980s, studios fought hard against the sale of home video equipment in legal battles that lasted into the late 20th century supreme court. They failed to halt VCR sales and the home video rental market boomed, sparking decades of struggles over surplus stocks.
Pay TV, including cable and satellite, was a growing business. Cable’s audience and corresponding revenues did not match those of its older sister company, broadcast television. But lower production costs and the mathematical magic that allowed cable channels to increase ratings by counting more than one airing of an episode versus a station’s single airing helped level the playing field. By the turn of the century, cable ratings exceeded those of traditional networks. Despite business reasons for Hollywood and Wall Street to differentiate the platforms, there was no significant difference for the audience. Despite the HBO tagline, it was all just TV for most viewers.
Then Netflix famously used the new technology of the internet to turn the content and distribution system upside down. Their subscription-based model for on-demand movies and shows combined both the home video rental market and pay-TV. Netflix was a David beating two Goliaths: First it came for Blockbuster, then it came for premium cable. Netflix didn’t even define itself as part of the Hollywood establishment; It was a disruptor in Silicon Valley. It wasn’t show business, it was “digital”. Like any major centralized system, Hollywood studios were slow to respond to the coming revolution.
Streaming was not yet dominant when the WGA went on strike for 14 weeks in 2007-08. The big names on the AMPTP side were former moguls like Les Moonves and Harvey Weinstein, not Netflix’s Reed Hastings or Amazon’s Jeff Bezos. Also of contention was the continuing problem of home video backlog in the DVD market. The term “new media” was still used to describe content ranging from webisodes to YouTube videos to streaming. New media in 2007 was what AI is today: a shark fin circling in the water.
When streaming-exclusive original shows came out in 2013, they were produced under industry agreements of 2008. As a subscription-based digital offering, Netflix (which Amazon and Apple+ would soon join) paid authors less than broadcast and cable due to lower residual balances. With the low interest rates of the time, money was cheap and more content could be produced to feed hungry viewers. Since there were no ads to sell, there was no need to report reviews that might be subject to public scrutiny. The outside measures of success were critic ratings and growing subscribers, which kept Wall Street investors happy. Everyone got richer… except for the writers and other lesser-known talents.
Three Hollywood truisms: First, show business is not an altruistic endeavor; It’s a profitable venture for everyone involved. Second, new technologies will open up new possibilities for the production and distribution of content. And third, content production relies on talent.
We see this with the streaming revolution: it caused a seismic shift in media consolidations that spawned a range of competitive offerings from familiar faces: Disney+ and Hulu, Peacock, MAX, Paramount+. Now viewers have many options and platforms to choose from alongside what we can ironically call “traditional” streamers. That means more competition for attention and profits; Ads, promos and reviews, that means…don’t touch the watch face folks! The bold little digital streaming has become something nobody expected: television.
Hollywood has proven to be an adaptable place. During the labor disputes, the main purpose remained the same: the production and distribution of entertainment content. Streaming and AI technology have fueled another uncertain transition, and a stable and profitable new normal is yet to be seen. But to produce content, you always need creators.
Like a starlet in a 1930s musical or a hero in a 1950s western, Hollywood always manages to bounce back from failure and get back to business. And the best way to get everyone back in business? Pay content creators accordingly.
Jordan Beck is a television executive, brand marketing strategist, and author with over 20 years of industry experience.