Entertainment Industry at a Crossroads: SAG and WGA Strike Looms Large

Is this the end of Hollywood? We tend to think about Hollywood as this unstoppable machinery always producing content. Well, not right now. The business is officially stalled and that’s due to two big strikes: the Writer’s Guild of America (WGA), which started on May 1st, and the SAG-AFTRA strike which started on July 14th against the Alliance of Motion Picture and Television Producers, and it is unlikely that it will get resolved any time soon.

These strikes not only affect the workers that belong to those unions but everyone in the industry, and it’s surely affecting our community. Let’s start with why the strike happened, and what are the three main issues.

The first issue is that both guilds want wage increase that reflects the crazy levels of inflation from the last two years.

Completely understandable.

Secondly, SAG wants a success metric for residuals for streaming services. Right now there are residuals but the residual is no greater for a success than for a flop, and what SAG wants is that if the show was seen by 60 million people across the globe, the involved parties get compensated accordingly.

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Also very much understandable.

The third issue, which is a big one and difficult to solve because it is still in developing stages, that is AI, we’re talking about. The writers don’t want AI to replace them, period. The actors are comfortable to a certain degree of replacement as long as they are compensated for it. As far as the extras, they don’t want to sell their likeness in perpetuity for $200 and with reason. The same way heavy machinery posed a risk for human labor back in the 80s, AI now poses a very high risk of replacing actors and writers. Also, a fair request and concern.

Photo courtesy: Idalia Valles

I pretty much agree with writers and actors on wanting fair compensation and having these issues addressed. However, it is not an easy moment for streamers, networks, and studios either. Coming back from Covid hasn’t been very easy.

Let’s see the recap on the most relevant events in 2022:

• Discovery acquired HBO laying hundreds of employees and axing make shows and features (some of them which were already filmed)
• Disney just laid off 7,000 people and none of their most recent releases has been a box office hit.
• Netflix, the “King” of the streamers is losing subscribers for the first time in 10 years. It has laid off hundreds of staffers. Among the options it is considering introducing cheaper, advertisement-supported plans, not letting the users share their subscriptions with friends and family, among others.
• In 2022, stocks in media companies lost $500 billion in value.

So, we understand how this might not be the best moment to ask for a raise. Sure, many argue that the CEOs of all of these companies make an obscene amount of money, regardless, but so do A-list writers and A-list actors. Sadly, no one from the 1% will ever cut their salary in order to give to the up-and-comers.

My biggest worry, whom I shared with some Latino talent (writers and SAG actors) is how this will affect our storytelling. No one knows for sure, but it seems like many streamers won’t survive, and the ones who do, will have to do less content due to the increased costs. And less content, could mean, less Latino shows and the studios focusing on shows that cater to the mainstream audience and somehow are great hits (like Yellostone). 

It’s an uncertain future for both parties and I hope they reach an agreement soon because there is a lot of collateral damage at stake; including our stories.