Hollywood Strike: What is Actors Strike About? Why are Hollywood Actors on Strike?

A pall of unease hangs over Hollywood. For months, fraught negotiations between the Writers Guild of America (WGA) and major studios represented by the Alliance of Motion Picture and Television Producers (AMPTP) have stalled.
October 15, 2023
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The WGA strike has officially crossed the 100-day mark. Screen Actors Guild (SAG) members now hold the pickets too. Creations languish on studio shelves as sets stay dark.

This standoff marks Hollywood’s longest labor war since 1988 — and with no resolution in sight. It shines a light on an industry in flux, as unions battle media titans over adequate pay and AI content regulations.

At its crux? A fight for the soul of creativity.

What is the “actors strike” about?

There are multiple layers to the story. Let’s unwrap them one by one.

Streaming’s Tectonic Rise

With the advent of OTT media, the entertainment sector has adapted to the “touch-of-a-button experience.”

This business is changing now,” says Dawn Prestwich, who has written TV dramas such as “Chicago Hope.”

And it’s true. OTT platforms’ tectonic rise has upended Hollywood's economics. Residuals — once reliable income for creatives (especially from reruns) — have all but dissolved.

With streamers like Netflix coming to the fore, compensation has switched from a per-licensing residual fee (including syndication, broadcast overseas, DVD sales, etc.) to a fixed residual. The new model has gutted people’s incomes.

Mark Proksch, who starred in The Office as “Nate Nickerson,” revealed that he earns more in residuals from 19 episodes of The Office than from 4 seasons of “What We Do in the Shadows”

His co-star, Kristen Schaal from What We Do in the Shadows, says “The residuals on streaming are almost non-existent, if at all.”

“If it’s a streamer, you get paid for the day, even if it’s a hit show. That’s not how people can make a living, and they shouldn’t have to,” she told TheWrap.

For A-listers like Mandy Moore, streaming checks for shows like “This Is Us” amount to pocket change — as low as a penny!

How do residuals work in streaming?

“In streaming, the companies have not agreed to pay residuals at the same level as broadcast, or the same reward-for-success as they have traditionally paid in broadcast,” says Charles Slocum, assistant executive director at the WGA West, as reported by Deadline.

He explains that “if you write for a streamer, you get two residual payments – one for domestic streaming and one for foreign streaming. It’s a set amount of money. If it’s a big hit, you do not get paid more residuals in streaming, whereas in the broadcast model, you do because of its success. That’s the sense that residuals were slashed – they have not agreed to a success factor when a program is made for streaming.”

Without meaningful residuals, creatives now depend on upfront compensation. Yet, media empires also squeeze these rates relentlessly.

Then, there’s the increasing use of “mini rooms,” where a small number of writers are hired just for pre-production.

Nina Sanchez-Witzel, the creator of the new Netflix show Survival of the Thickest, said Netflix refused her request to keep the full writing team beyond pre-production. She was forced into round-the-clock rewrites with just one other writer.

“It was completely unsustainable. I'll never do that again,” she says.

Mini rooms epitomize the unstable overwork creatives endure while executives prosper. They also reveal the greed-driven psychology of big tech companies to rake in the maximum moolah.

“These companies blew up a successful business model that the public enjoyed, that was immensely profitable, and they replaced it with a mishmash that we have now,” says Adam Conover from “Adam Ruins Everything.”

Crying Poor? The Stark Difference Between Working Artists and Studio Executives

The push for fiscal discipline contrasts jarringly with extravagant studio executive pay.

Per public filings, Disney’s Bob Chapek made $32 million in 2021. Warner’s David Zaslav? A gobsmacking $246.7 million.

Despite mass layoffs at Warner Bros. Discovery, Zaslav pocketed nearly $500 million from 2018–2022. This year, Disney CEO Bob Iger has an annual earning potential of $27 million.

With conglomerate revenues soaring, the studio heads still insist that unions are uncompromising and picked the “worst time” for their demands. The latter is not being “realistic” about negotiations, they claim.

When you contrast it with creatives losing their homes and fighting to pay their bills, this claim clearly rings hollow.

Taxpayers Bankroll Studio Profits

Studios are not only enjoying the merits of transformative technologies. They also have a secret benefactor who has their: “You,” the taxpayers.

Yes, taxpayer money remains the hidden financial backbone propping up studio profits, via state production subsidies.

California recently boosted its cap to $330 million in credits annually to lure productions, while New York solidified the industry's most generous benefits - from $420 million to $700 million in tax credits each year.

The notion “studios can’t afford” a raise is laughable, to say the least. It’s also not surprising to see millions being splurged on overpaid CEOs.

But forget raise, creatives are struggling to maintain their wages. The Writers Guild of America reports median pay for writer-producers has dropped 23% in the past decade. Half now earn the WGA’s bare minimum.

For the Screen Actors Guild, things are even more dire: around 87% make under $26,000 a year from acting — too little to qualify for the union's health insurance.

The Looming Specter of AI: Replacing Actual Jobs

Even in the midst of a growing pushback against AI, studios are heavily investing in artificial intelligence and automation.

Artificial Intelligence in creative work doesn’t merely push creatives to the wall but also evokes existential crisis in them.

AI replacing jobs

SAG-AFTRA's national executive director and chief negotiator, Duncan Crabtree-Ireland earlier claimed that according to studios, “background performers should be able to be scanned, get one day’s pay, and their companies should own that scan, their image, their likeness and should be able to use it for the rest of eternity on any project they want." SAG seeks strict protections around consent, ethics, and limiting AI exploitation.

Though AMPTP claims that the contract doesn’t mention the use of such digital replicas in perpetuity, and creatives will consent to and negotiate for other projects, it still doesn’t take away the fact that people will only be paid for a day – and not get additional work for the changes later, as they’d conventionally do.

And, let’s not forget. Soon, studios may not need human writers, composers, or actors at all! Generative AI may be the ultimate go-to solution for everything.

"We're Fighting for the Survival of Our Profession," the SAG-AFTRA announcement reads.

The Alarming Ambitions of Unconstrained AI

Entertainment companies aggressively pursue leveraging AI in ways many in the creative community find alarming and unethical.

It’s not clear how the studios plan to utilize AI technology. But with job postings featuring pay packages as high as $900,000, things may be more ambitious than they seem.

Carly Turro from television series like “Homeland,” says, "If it wasn't a big deal to plan on utilizing AI to replace actors, it would be a no-brainer to put in the contract and let us sleep with some peace of mind."

"The fact that they won’t do that is terrifying when you think about the future of art and entertainment as a career."

It is a no-brainer that studios may increasingly utilize AI technologies like generative adversarial networks (GANs) to synthesize new content, music, and performances without ongoing human creative input. If so, things may never go back to normal for creatives.

And, a few years ago this may have sounded like a dystopian, sci-fi sensationalism. Today, everyone is aware of generative AI – and how fast the field is growing. The deep fakes doing rounds nowadays are keeping digital video forensics experts on their toes. They admit that the detailing is unlike what it has ever been. Tools like Midjourney can already create life-like images of popular personalities and settings.

With rising computational power and efficient AI models, the cat-and-mouse game of deep fake and AI replication may reach a different level altogether.

Even today, when video-based generative AI is in its infancy, we’re seeing the tell-tale signs of the future. Have a look at this short film created entirely by AI.

Soon, advanced systems may realistically generate scripts, songs, scores, and believable acting with disconcerting accuracy.

Projections on the scale of displacement vary. But, AI researchers including OpenAI’s CEO Sam Altman believe there won’t be many jobs going forward. Sam is also quite loud about regulating the space, which other AI experts also claim should be fast-tracked.

"A lot of people working on AI pretend that it's only going to be good; it's only going to be a supplement; no one is ever going to be replaced," Altman told The Atlantic. "Jobs are definitely going to go away, full stop."

The Struggle for Oversight and Control

Creatives demand reasonable constraints on AI usage to protect media arts professionals.

They aim to close loopholes enabling unrestrained AI generation and replication. There must be mandatory approval for any AI usage of a creator’s work, music, or likeness, coupled with fair compensation.

Simply put, creators want ethical guardrails and oversight. After all, they have a right to maintain control over their own creations.

Executives are already making advances in AI despite ongoing scrutiny. Without limitations built into contracts and regulations, creatives believe that studios will recklessly adopt AI, treating human imagination and talent as commodities, interchangeable and disposable.

The Brewing Battle Over AI Rights

Fundamentally, Hollywood strikes are a referendum on who controls the nascent power of AI creativity.

Studios aggressively lobby for lax regulations to maximize corporate usage and profits. Creatives demand guardrails to prevent exploitation by algorithms and maintain artistic stewardship over their craft.

Without reasonable rights and protections, creatives fear being robbed of their livelihoods as algorithms usurp authorship.

But thoughtfully implemented, AI collaboration could also unlock new possibilities. Even OpenAI CEO Sam Altman believes that we wouldn’t want to return to the pre-AI world.

However, the transition is not going to be easy. You can already smell the bad blood.

“A Really Cold Christmas”

In July, a studio source told Deadline the AMPTP’s strategy was to prolong negotiations until “union members start losing their apartments and losing their houses.” Another insider callously labeled it a “cruel but necessary evil.”

Though the AMPTP disavowed the comment, unions argue it reflects the studios' intentional delays despite knowing workers' livelihoods hang in the balance.

With studios leveraging profits to crush union demands, creatives stake their futures on this labor standoff. They reject a dystopian entertainment landscape where algorithms exploit and replace storytellers.

Success here could shift power dynamics and usher in a more ethical media era. As audiences, we must stand in solidarity with the creatives who inspire and move us. This opening act is far from over.

What This Means for Content Creators

These brewing battles hold crucial implications for content creators of all scales in the age of ascending AI.

The growing capability for videos, scripts, and music to be scraped for AI training highlights the need for strategic stewardship of creative work.

The fact that public online videos can potentially be utilized to develop systems that may one day displace artists is highly problematic. The ruthlessness and lack of ethics demonstrated by big tech and entertainment studios should alert individual creators to be more cautious.

As a creator, you must be selective about what content you share publicly moving forward. Posting everything openly online could empower your own obsolescence. You must privatize as much content as possible and maintain control.

As debates rage around compensation, ethics, and AI in Hollywood, the wise course for creators is learning lessons about safeguarding one's digital footprint and asserting creative rights. The big tech companies aren’t forgiving when they want to have things their way.

The stakes are high, as swiftly evolving technologies risk progress without purpose if uncontrolled.

There is a fragile window to establish oversight as AI emerges. Content creators must lead the vanguard advocating for ethical progress, not technocratic excess.

Much uncertainty still swirls, but the principles of this watershed Hollywood dispute apply to artists everywhere.

Our collective response will shape the future of entertainment.

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Marcello Violini
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