By Sean Higgins, Competitive Enterprise Institute
The current strike by Hollywood writers and actors is a reactionary, rear-guard effort against changes in technology. The members of the WGA (Writers Guild of America) and SAG-AFTRA (Screen Actors Guild-American Federation of Television and Radio Artists) are doing what unions often do in these circumstances: fulminating against the changes and accusing management of being simply greedy.
History is not on their side. As the industrial unions found when they fought automation, technological changes simply cannot be undone.
SAG-AFTRA President Fran Drescher claimed on Friday that actors were being “dwindled and marginalized” by these changes.
“The entire business model has been changed by streaming, digital, [and] AI. This is a moment of history that is a moment of truth,” she declared.
The switch from traditional television broadcasting and cinema-going methods of distributing a film or series to computerized streaming services has been hugely disruptive to actors and writers, whose contracts are mostly based on the old distribution.
Streaming series tend to be shorter. A typical season of broadcast television series comprises about two-dozen episodes. One season of a streaming series is typically half that. Traditional television relies almost exclusively on advertising for revenue. The more episodes you air, the more advertising you can sell. For the studios, striking the right balance on that was tough, since each additional episode is also an additional expense. But if you’re a traditional TV station you have to put something on the air, so the TV networks usually err on the side of volume.
Streaming and cable services get most of their money from viewers signing up rather than from ads. Streaming services therefore don’t need to stretch out the seasons. They can produce a minimum number of episodes needed and pocket what they would otherwise spend to produce additional episodes. That’s why the model is so appealing to the big entertainment companies. Actors and writers usually get paid by the episode, so shorter seasons means less work for them.
The theater industry’s decline, which was accelerated by the Covid-19 pandemic, has created the fear that soon all distribution will be streaming. The latest Mission: Impossible film opens with a brief clip of star Tom Cruise and director Christopher McQuarrie talking directly to the audience and thanking them for seeing the film in a theater. The clip inadvertently reveals how even the biggest players on the creative side in Hollywood are disturbed by this technological shift.
Another issue is how popular a streamed series is, because most people don’t know. TV series’ popularity is tracked by Nelsen ratings. The major studios release the box office numbers for theatrical releases. Streamed series provide no reliable source of public data to track how popular they are. Studios usually don’t release the numbers. That puts the actors and writers of those shows in a difficult position when to comes to negotiating pay. Even if the series they’re working on is successful, they won’t necessarily be able to use that as leverage to demand more.
Other issues relating to technology involve establishing standards for use of AI, which holds out the possibility that Hollywood may someday do away with actors altogether. The actors and writers can negotiate for better pay and more residuals (that’s likely what ultimately happens here) but the automation and efficiency being promoted by streamlining, digital, and AI are here for good.
Show business was long assumed to be resistant to the type of automation that cost factory worker jobs. Machines cannot do what actors and writers can do. The unions are realizing that may no longer be the case.
Sean Higgins is a research fellow at the Competitive Enterprise Institute specializing in labor and employment issues.