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Hollywood's existential crisis


During the pandemic, if you were to ask most people what got them through, some version of ‘watching my programs’ would be near the top of most people’s lists. And for a lot of the world, most of those programs were the work of writers, actors and crew who had been working in Hollywood. (Personally I also watched a metric ton of British TV, and anything I could get my hands on starring Aaron Pedersen.)

A few of their names you might know — particularly the names of some of the actors;  a few are paid extraordinary sums. But most are freelancers you’ve never heard of and never will, living job to job, relying upon unions (or partners) to guarantee them health insurance and fight for proper salaries and benefits.

But while we were all relying on these creators to help us, they had for some years been finding themselves pushed more and more into a financial corner by the very studios that were counting on them to provide the content that everyone was praising.

In May the Writers’ Guild (of which I am a member) went on strike, after the bargaining organization that represents all of the major studios walked away from negotiations. Last month the Screen Actors Guild experienced the same, and have now joined the writers on strike. Mostly the press has covered what has been dubbed ‘artificial intelligence’ as the heart of the crisis, but in fact many of the issues are much less fantastic and more familiar. Executives with rapacious appetites have been chasing higher profits at the expense of their employees (and common sense), and their writers and actors are finally fighting back.




In February of 2013, Netflix launched its first big show, House of Cards, an American remake of the brilliant British series about a scheming politician who works his way up the political ladder by ruthlessly manipulating and betraying everyone in his way.  

The show was a massive hit. It immediately put Netflix on the map as a major player in the TV world. It also established the idea of streaming services as not only viable distribution models but a force to be reckoned with.

Predictably, that led to an explosion of streaming services over the last ten years. Pretty much every cable and network channel has its own streamer, if not multiple services, most of them built originally upon Netflix’s ad-free subscription model. 


'Meanwhile, the writers and actors find themselves confronted with an existential threat. If they don’t get agreements in place on things like residuals or the use of machine learning, they will find themselves soon unable to make a living in their own industry.'


Over the years, some have wondered, how exactly is all of this sustainable? But, as is the case with most financial bubbles, they begin in a giddy sense of possibility and FOMO. We’ll figure the money part out as we go. We just have to get in here. And doesn’t our site look cool?

But the questions weren’t just about the overall sustainability of a streaming ecosystem. Netflix was producing tons of original content around the world, an expensive endeavour, and yet its only source of income, beyond investor dollars, was monthly membership fees. The sales pitch seemed to be, with 8 billion people on the planet the potential for growth was virtually limitless. But was that really going to work, for any of them?

The answer was, No. According to one study, the only streamers to have ever made money are Netflix and Hulu, and that was just last year—during which Netflix also reported a net loss of almost a million subscribers. After an incredible surge from nothing to 164.2 million subscribers in its first three years, Disney+ has lost 7 million over the last 6 months (many of them from its Indian brand Disney+ Hotstar). Amazon Prime has over 200 million members, and doubled its subscriber base between 2018-2021. But nearly 75% of that membership is in the United States, and in the last 2 years the service has lost nearly 2 million members here. (Also many who are members use it for things other than watching films and TV show, like its free shipping.)

In the last year, studios have shut down active productions, cut back staff dramatically, even removed recently-produced content from their sites, often citing the carry-on effects of the pandemic. In truth the streamers’ ‘success’ has been built on cutbacks to the creative team from the beginning. In the last decade writers have found themselves contending with lower salaries, shorter series runs, much smaller staffs or even no writing staff at all, and no money to allow younger writers to be on set, learning how to run the next generation of shows. 

Actors and writers have also been dealing with the collapse of residuals. Though the word sounds like something small and incidental, a leftover of some kind, in fact ‘residuals’ are an essential component of the Hollywood system. In the pre-streaming world, any time a movie or show was aired, those involved with its creation earned money. In an industry where you’re never sure where the next job is going to come from, those payments are often the lifeline that actors and writers rely on until they book the next thing.

Because of the nature of streaming, where there are no set air times and everyone watches what they want whenever they want, studios have turned residuals into a joke. Actors have recently taken to posting their residuals checks online; even cast members on enormously popular current shows like Abbott Elementary are getting residual checks for 5 cents.

For most actors, who are not the megastars making millions of dollars, the end of residuals combined with salaries that have not kept up with inflation has meant the periods between jobs can be very, very difficult.  

And even as the studios insist they are fully invested in their human talent, Disney just launched its big new show with opening credits created entirely by a machine learning program. (They were terrible.) Netflix has posted a job for an ‘AI product manager,‘ with a salary of $900,000. Other companies are doing much the same. For some years now studios have been using ‘intelligent’ computer programs to decide which scripts to make.




Writers and actors live by an important adage: ‘What’s the note behind the note?’ When you’re dealing with studio executives giving you notes on a script or performance, you’re often not dealing with someone who ‘speaks’ the language of your art. As a result they may offer critiques that seem random or completely off-base. But our job as writers and performers is to try and understand what’s underneath their feedback, what they’re really getting at. Making a movie or a TV show is an act of radical collaboration, and a big part of that lies in everyone putting aside their own egos so that the work may truly thrive.

Looking at the action of Hollywood executives toward their creatives over the last decade, what’s the note behind the note? What are they telling us? Certainly not that our work is valued, or our humanity.

You can hear the pain of that sense of betrayal in SAG-AFTRA president Fran Drescher as she announced her union’s strike: ‘I am shocked by the way the people we have been in business with are treating us,’ she said in her press conference. ‘I cannot believe it, quite frankly, how far apart we are on so many things. How they plead poverty, that they’re losing money left and right when giving hundreds of millions of dollars to their CEOs. It is disgusting. Shame on them.’ There’s outrage there, for sure, but also tremendous grief. (And it’s a grief I suspect is widely shared among the lower-level studio executives who work with writers and actors to develop and maintain great shows. They, too, find themselves trapped in this crazy system and are being used more and more as cannon fodder.)

Despite their talk of hard times, Disney’s revenue for 2022 was almost 83 billion dollars. Netflix’s was $31.6 billion. And they’re just guppies in the pond next to fellow streamers Apple — 400 billion, and Amazon — $514 billion.

Meanwhile the Writers’ Guild estimates that its proposals would add a net cost of $429 million per year to the Hollywood system as a whole. Breaking that down, they estimate it will cost Disney $75 million per year, less than one tenth of one percent of the company’s revenue. The $68 million asked of Netflix is two tenths of one percent of the $31.6 billion it will earn. It’s also $10 million less than the company paid its co-CEOs Ted Sarandos and Greg Peters in 2022.

In the States, there will be no autumn season of scripted network television. Reality TV and foreign productions can only sustain the streamers for so long. And yet thus far the studio executives refuse to even come to the table to continue talks, seemingly believing they have far deeper pockets to survive the losses they’re accruing, and bizarrely that they also occupy the moral high ground. Disney CEO Bob Iger, who this year is set to make $27 million dollars, describing the demands of the writers and actors are ‘just not realistic’ while at the Sun Valley Conference — dubbed by Fortune ‘summer camp for billionaires’ — pretty much says it all.   

Meanwhile, the writers and actors find themselves confronted with an existential threat. If they don’t get agreements in place on things like residuals or the use of machine learning, they will find themselves soon unable to make a living in their own industry. It’s a plight paralleled by the experiences of so many other laborers around the world: the Chinese factory workers around the country who have been striking over non-payment of their wages; Nigerian airport workers who shut down airports in April over low pay and terrible working conditions (a report on which the government refused to release); or the many, many strikes by teachers in Lebanon, Palestine, New Zealand, Los Angeles, Oakland and Romania, some of which have gone for many months.

The writers and actors’ action is resonating more broadly here as well. For the first time in a long time, members of others unions have been showing up to support the writers and actors. And there is the potential that the auto workers and UPS workers may also soon strike, either of which could impact the entire country immediately. 




John D. Rockefeller, who founded the Standard Oil Company and was the first American billionaire, was once asked, ‘How much money is enough?’

His answer: ‘Just a little bit more.’

When you get right down to it, that’s what labor is dealing with, not just now but always: tycoons of one kind or another who want ‘just a little bit more,’ and don’t give a damn about the human cost involved.

In the daily protests across Los Angeles, strikers have taken to ‘theme days’ where they do things like sing karaoke as they march, or turn their day of striking into a dating event or dance party. It’s not exactly typical strike behavior, but it highlights that the writers, actors, crew and others who march in solidarity with them are a community, people who are there for each other and will continue to be.

Even more than that, these kinds of actions underline their humanity. They are not numbers to crunch or resources to be reallocated. They are human beings, vibrant and alive. And they will stand in the sun and proclaim that with everything they have for as long as it takes.  




Jim McDermott is an American culture critic and screenwriter.

Main image: Hollywood writers walk the picket line outside the gates of Walt Disney Studios. (David McNew/Getty Images)

Topic tags: Jim McDermott, WGA, SAG, Writers, Actors, Hollywood, Strike



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