Hollywood digs in for prolonged shutdown
LOS ANGELES (CN) — Ten days after it began, the Hollywood writers strike has settled into a routine, with dozens of picketers showing up to movie and television studios at 9 a.m. every morning.
They work in shifts, marching in loops outside Disney, Netlflix, Paramount, Amazon, and six other headquarters. They show off their witty signs. They catch up with old friends. They snack. For many, this has become something almost like a job.
Writers expect the strike to last months.
"Most people are mentally prepared for it to last until the end of the summer," said Kevin Fox, a longtime television and movie writer who was picketing outside of Netflix headquarters in Hollywood on Thursday afternoon.
Natalie Callaghan, another TV writer picketing outside of Netflix, agreed.
"People are prepared for the long haul, but they're also trying to take it day by day," she said.
Writers and the 10 major studios remain deeply divided on a number of issues including minimum pay, the rules governing artificial intelligence in script writing and residuals. But the biggest impasse is over how long and how many writers it takes to write a season of television.
Network TV shows once produced more than 20 episodes a year, which made writing for them akin to a full-time job. And if the show was lucky enough to last long enough for old episodes to be rerun in syndication, writers could get residual checks for decades. But the current wave of prestige TV and streaming platforms has led to shorter seasons — eight to 12 episodes, typically — and thus shorter work periods for writers, and often smaller writing staffs.
The Writers Guild has said the shorter seasons have turned scriptwriting into a "gig" — short term work. They want the studios to guarantee a minimum number of weeks for employment, and a minimum number of writers per show. That issue has been treated by the producers as a non-starter.
The point of a strike is, of course, to inflict economic pain on the business, to starve it of its customers and revenue, and to force it back to the negotiating table. This is undoubtedly the case for three of the studios that own TV networks: Paramount (owner of CBS), Disney (ABC) and NBCUniversal. Should the strike last until mid-summer, the next season of new television will be delayed.
But the other studios — particularly Netflix, with its massive library of content — may not mind that all that much. A fall without new episodes of scripted content may lead to a viewer exodus away from traditional TV and onto streaming platforms.
"The divergence of interests between these companies, stemming from their diversity of business models, makes it harder for them to get on a single page," said Jonathan Handel, an entertainment lawyer and industry insider. "And that makes it harder to get a deal done."
Some of the studios may actually benefit from the strike, at least in the short term.
For years, studios engaged in what many called the "streaming wars," in which they scrambled to amass large libraries of content and buzzworthy television shows in a desperate attempt to attract subscribers. Much like the competitions seen in other tech driven fields — Uber and Lyft, for example — the idea was that only a few streaming services could survive, and no one wanted to left out. And so NBC started up Peacock, Paramount started up Paramount+, HBO expanded into HBO Max (now just "MAX," for reasons unknown), and so on.
The streaming wars was like a New Deal-style full employment act for the entertainment industry, though for the writers it certainly had its drawbacks, as the seasons were shorter.
Now the industry is retracting. Companies are more focused on trying to turn their streaming services into profitable enterprises (something that's eluded all but Netflix so far) than on gaining subscribers. Less production means less spending. And should the strike go on for another seven weeks, they can start canceling deals they made with show creators through "force majeure" clauses.
"Studios and streamers, during an era of easy money several years ago, entered into pricey overall deals with showrunners," said Handel. Now, he said, many studios will leap at the chance to wriggle free from them, or perhaps renegotiate them.
"It's a case of making lemonade out of lemons," said Handel. "The studios and streamers will be able to cut and save money. Then they can go to Wall Street and sell a narrative of fiscal responsibility."
The last writer's strike lasted 100 days, from November 2007 until February 2008. It ended after the Directors Guild signed a new contract with the studios, which served as a template for deals with both the Writers Guild and the Screen Actors Guild. Writers also threatened to boycott the Oscars, which would have effectively canceled the event — a big blow to Hollywood prestige and an economic blow to ABC, which airs the highly watched ceremony.
Neither of those two factors will be of much help this year. Both the Directors Guild and Screen Actors Guild are negotiating new contracts, which lapse at the end of June. But neither are asking for guaranteed minimums for numbers of employees and terms of hire. And the Oscars aren't until March. A strike that long would be devastating for Hollywood, as well as the economy of Southern California.
The last strike cost the local economy around $2 billion — about $3 billion when adjusted for inflation. Shutting down all scripted production has enormous ripple effects. Services like dry cleaners and caterers are directly affected, while other sectors like real estate would feel the secondary effects.
As for the writers, many of them feel like they have nothing to lose.
"The problem for the studios is, writers are divided into two categories," said Kevin Fox, the writer. "Those who make enough money to survive and those who never made enough money to survive.
"And we’re all out on the sidewalks."