The strike threatened more setbacks for Hollywood in the summer of box office failure
SAG-AFTRA President Fran Drescher (center) and Chief Negotiator Duncan Crabtree-Ireland (left) picket Hollywood studios outside Netflix.
For Hollywood, 2023 will be remembered as a brutal summer, a different type of dead reckoning. That's because the mountain of bad news piled up, highlighting the reinvention of the entertainment industry, which added to uncertainty and triggered an outbreak of labor unrest.
The double strike of the guild representing writers and now actors — the first since Ronald Reagan became president of the Screen Actors Guild in 1960 — reflects a technological shift toward streaming, diluting traditional television, disrupting business models and the workers who rely on them.
Add to that consumers who are increasingly accustomed to watching movies at home, combined with the lingering effects of the Covid pandemic, resulting in a box office disappointment.
This summer, studios have suffered show-off setbacks including "The Flash" (distributed by Warner Bros., like CNN, a subsidiary discovered by Warner Bros.), Disney's "Indiana Jones and the Dial of Destiny" and the Pixar movie "Elements." Even Tom Cruise, who seems to have saved the theater industry with the resounding success of Top Gun: Maverick, may not be immune, though the jury still doesn't know how many people will accept an invitation to watch "Mission Impossible – Dead Reckoning, Part I" on the big screen.
Harrison Ford and Phoebe Waller-Bridge in Indiana Jones and the Dial of Destiny.
The disruption can also be seen on television, where, as Variety reports, the upfront market — during which the network has received billions of dollars in advertising promises — has been disappointing, fueling the ongoing struggles of linear broadcast and cable networks.
As more consumers cut back on a la carte option on cable or satellite subscriptions, even sports giant ESPN has slashed its roster of live streaming talent.
As for streaming, once seen as the savior of the entertainment industry, especially during the pandemic, it continues to be challenged by profits due to billions of dollars invested in programming. As a result, some streaming services have been reducing their rosters of available material (so long, "peak TV"), which may reduce consumer motivation to subscribe.
A key question is whether streaming will be reduced by "cannibalizing" existing forms of distribution at least as much as it is increased. Tony Gilroy, the writer and producer behind the Emmy-nominated "Star Wars" series "Andor," told Indiewire that the commercial side of streaming is "twisted and twisted to almost ruin this amazing industry."
"This business model has changed," SAG chief negotiator Duncan Crabtree-Ireland said at a press conference, "but these companies just want to lock our members into a contract that doesn't reflect that change."
Streaming has disrupted the entertainment industry.
From their perspective, they weren't wrong when studios and streamers said the business was making a major shift, prompting Disney CEO Bob Iger to say guild contract requirements aren't "realistic" in the current climate. However, Iger made the remarks at his annual conference at Sun Valley, where wealthy media moguls gathered to discuss their business, fueling hostility among picket figures.
Another problem studios face is that many of their movies and TV shows are too expensive to form a very fragmented market, a formula that can't be reversed overnight. Escalating budgets add pressure and potential losses to underperforming blockbusters like Indiana Jones and The Flash, which need to earn huge sums of money to break even. Executives worry that the new guild contract will only add math problems.
The asterisk — which is a big asterisk — is that the guild knows little about the economic details of the streaming business, and those details aren't widely shared. Actors and writers who once counted on surplus payments could see TV ratings and box office records. Today, the streaming world is far less transparent, which is one of the reasons some have dubbed the "Netflix strike."
The SAG-AFTRA actor went on strike Friday when he joined the Authors Guild of America (WGA) on a picket line outside Netflix's offices in Los Angeles.
All of these factors, and the uncertainty that comes with it, help explain why both sides seem so deeply trapped, recognizing the gravity of what is at stake is a reason to endure both short-term and potentially long-term sacrifices — as actor-director and producer George Clooney puts it, as "inflection point" for the industry.
Because the project is made well in advance, consumers won't see the broader consequences of these strikes for some time. But their evolving habits — and interest in new technologies, like Apple's expensive virtual reality headsets — are other unknowns in the equation, including people's willingness to pay more for entertainment, no matter where and how they watch.
Think of this as another variable as to whether this reckoning will start flipping the scoundrels of the Hollywood summer, or simply point to the cold winter that is coming.
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