Hollywood Grapples with Mixed Feelings Post-Strikes
With the recent strikes officially behind them, Hollywood should be basking in the glow of a triumphant return to business as usual. Writers settled a deal that exceeded expectations, and now, the actors’ union has paved the way for the film and television industry to resume operations after a 118-day strike. However, the mood in the heart of the entertainment industry is far from uniform; it’s a complex blend of celebration, lingering resentment over the work stoppage, and concerns about an uncertain future.
“People are excited—thrilled—to be getting back to work,” said Jon Liebman, co-chief executive of Brillstein Entertainment Partners. “But they are also mindful of some sobering challenges that lie ahead.” The elephant in the room is the projection that higher labor costs may inflate production expenses by about 10 percent, a burden that studios will likely offset by reducing their production output.
Jason E. Squire, editor of “The Movie Business Book,” expressed this reality succinctly, stating, “They will compensate by making less. The end.” As a result, streaming giant Hulu, for example, anticipates a roughly one-third decline in the number of new shows produced in 2024 compared to 2022.
This contractual dance is not confined to actors alone; the Directors Guild of America has secured a contract that guarantees raises. Furthermore, two more union contracts, covering various crew members, will expire in the coming months. Studios will need to open their wallets or risk facing another shutdown. Lindsay Dougherty, a lead organizer for Teamsters Local 399, which represents over 6,000 Hollywood workers, remarked, “READY for our contract fight next year” on social media.
Even before the strikes, Hollywood had experienced a rollercoaster of boom and austerity. The “Peak TV” era, characterized by a plethora of new programming driven by streaming services, came to an end as profit began to overshadow subscriber growth, a shift influenced by Wall Street pressures. According to Ampere Analysis, TV networks and streaming platforms ordered 40 percent fewer adult scripted series in the second half of 2022 compared to the same period in 2019. In a concrete sense, this translates to 599 adult scripted series produced in the previous year, with predictions suggesting a one-third decrease by 2025, affecting the livelihoods of hundreds of industry professionals and ancillary businesses.
Zack Stentz, a screenwriter renowned for works like “X-Men: First Class” and “Thor,” highlighted the challenge, stating, “A lot of careers and even entire companies are going to go away over the next year.” However, he also noted that this transformation presents an opportunity for innovative individuals and companies to thrive in this new landscape.
Despite the relief following the strike resolution, the issue of streaming profitability remains unsolved. While platforms like Netflix and Hulu are profitable, others such as Disney+, Paramount+, and Peacock continue to report losses. Comcast recently disclosed that Peacock alone would register a deficit of $2.8 billion in 2023. Analysts predict that the oversaturation of streaming services will lead to closures or mergers, potentially thinning out the competition.
The traditional cable television and box office sectors are also grappling with profound issues, with PwC projecting that less than 50 million households will pay for cable or satellite TV by 2027, down from 64 million today and 100 million seven years ago. Disney’s exploration of selling a stake in ESPN, and Paramount Global’s struggles with cord-cutting, are indicative of the challenges in the cable television landscape.