Hollywood entertainment industry faces unprecedented crisis

Hollywood faces unprecedented crisis

At exactly 4:00 a.m. on July 14 (US time), the Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) and the Writers Guild of America announced a strike because they could not find common ground with the Alliance of American Motion Picture and Television Producers (AMPTP) to sign an agreement between the two sides.

SAG-AFTRA leaders call for strike. Photo: Reuters.

According to IGN, the most important reason for SAG-AFTRA's protest is: Hollywood studios want to use AI to copy actors' faces for long-term purposes, such as changing or recreating that actor's likeness across multiple projects.

SAG-AFTRA said it is not seeking to ban AI, but wants to ensure that any use of an actor's image is with that person's consent and is properly compensated.

Facing a wave of protests, Variety said, AMPTP affirmed that it had offered the highest percentage increase in minimum wages in the past 35 years, while increasing benefits and proposing a groundbreaking AI proposal to protect actors' likenesses on digital platforms from illegal use.

“Instead of continuing negotiations, SAG-AFTRA is making things worse for thousands of people who depend on this industry,” said a representative of AMPTP.

Meanwhile, Disney CEO Bob Iger said the expectations of actors and writers were "unrealistic", while the strike led to many consequences.

This is the first time Hollywood has seen an industry-wide double strike since 1960 and the first actors' strike since 1980.

The Writers Guild of America, a part of the US entertainment industry, went on strike in front of Netflix's office. Photo: Reuters.

The SAG-AFTRA strike comes two months after a sustained strike by the Writers Guild of America in May, which forced a slew of long-running television shows and new Hollywood films to halt production.

In May, screenwriters protested over concerns about working conditions and the challenges of using artificial intelligence (AI) in the film industry.

This time, according to the NYTimes, the main cause of the strike is mainly related to wages. The rise of movie platforms as well as the challenges of the post-Covid-19 period are putting great pressure on the entire American film industry.

Specifically, film studios are suffering financial problems, while actors and writers are looking for higher salaries, along with guarantees on working conditions in the face of rapidly changing times.

Both actors and writers are demanding increased royalties from streaming services. Series produced by streaming platforms typically have much fewer episodes than TV series.

Previously, for a popular TV series, actors and writers were paid a fee each time an episode was re-aired. However, the emergence of online streaming platforms has changed this system and caused losses for them.

The Unpredictable Future of the Film Industry

The Shine said the strike could halt all production in Hollywood. Fox has not yet announced the broadcast schedule for the Emmy Awards this year due to the impact, and could be postponed to September or early next year.

Actors' representatives are asking Hollywood bosses to increase base salaries and share profits. Photo: Reuters.

Disney CEO Bob Iger warned that the strike would have “a very serious impact on the entire American entertainment industry.” “This is the worst time in the world to have this disruption,” Iger told CNBC.

Meanwhile, the NYTimes said that the strikes could disrupt the Hollywood entertainment industry, directly threatening box office numbers and revenue in 2024.

According to the latest statistics, both of Hollywood's traditional businesses, box office revenue and television subscriptions, are in serious decline.

2023 is a turning point for the recovery of cinemas after the Covid-19 pandemic. However, ticket sales in the US and Canada are still down 21% compared to the same period in 2019.

Statistics from auditing firm PwC show signs of a declining industry when the number of movie tickets globally could reach 7.2 billion by 2027. Meanwhile, the total number of ticket buyers to theaters in 2019 was 7.9 billion.

In television, PwC predicts fewer than 50 million households will be paying for cable or satellite TV by 2027. That number was as high as 100 million in 2016.

However, Mr. Michael Nathanson - communications expert at SVB MoffettNathanson said that, objectively speaking, the strike can bring both positive and negative impacts.

According to Mr. Michael, if the double strike only lasts for a month or two, companies can see this as an opportunity to save costs - which they would otherwise have to pay to maintain the entire crew. During this time, the company can carry out pre-production steps such as choosing the script, setting... to be ready to start production when everything is ready.

If actors don’t return to work in the fall, it will have a direct impact on media contracts. Especially when Netflix and other streaming platforms have the upper hand over traditional companies, “lucrative” advertising contracts could also be lost.

Actors and writers join the strike in Hollywood. Photo: CNN.

However, at this point, no one knows how long the Hollywood strikes will last. The future of the Hollywood film industry remains uncertain.

American screenwriters have been on the streets for more than 70 days in protest, with no signs of stopping. The last time actors staged a major strike was in 1980, when it lasted more than three months.

Meanwhile, the most recent writers' strike was in 2007, lasting 100 days, costing the state of California more than $2 billion.