History of the 2023 Writer’s Strike
From our recent podcast episode, The Writer’s Strike is a recurring labor dispute that has significantly impacted the entertainment industry. It arises between the Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP) due to disagreements over compensation, working conditions, and creative control. Let’s look at the three most significant strikes in the industry’s history.
The First Writer’s Strike in 1960 and Its Outcomes
The first writer’s strike occurred in 1960 and lasted for 21 weeks. The writers demanded residuals, payments made to writers to reuse their work. The studios refused to pay, claiming that it was not financially feasible. However, it led to the creation of the WGA’s residuals system, which ensured that writers were compensated for their work. This system is still in place today, and writers receive compensation for their work’s reuse in various formats. Financial feasibility is also the reason the studio executives report in 2023.
The strike significantly impacted the entertainment industry, with many television shows going off the air and film productions being delayed or canceled. The surrounding trades in Hollywood are also feeling extreme pressure on their business. The local economy is down 30 billion dollars in only three months.
The Second Writer’s Strike in 1988 and Its Outcomes
The second writer’s strike occurred in 1988 and lasted for 22 weeks. The writers demanded a share of the profits from home video sales. The studios again refused to pay, claiming it was not financially feasible.
The strike significantly impacted the entertainment industry, with many television shows going off the air and film productions being delayed or canceled. However, it led to the creation of a residual system for home video sales, ensuring that writers were compensated for their work in this area. This system is still in place today, and writers receive compensation for their work’s reuse in home video sales.
The Third Writer’s Strike in 2007-2008 and Its Outcomes
The third writer’s strike occurred in 2007-2008 and lasted 100 days. The writers demanded a share of the profits from new media, such as streaming services like Netflix and Hulu. The studios again refused to pay, claiming it was not financially feasible. This brings us to today.
The 4th Writer’s Strike in 2023
In 2023, the entertainment industry faced a significant disruption when the Writers Guild of America (WGA) went on strike. This event echoed the infamous 2007-2008 writers’ strike. The 2023 strike, like its predecessor, stemmed from disputes over compensation, digital rights, and the evolving landscape of the entertainment industry.
The Writers Guild of America, representing screenwriters, television writers, and other professionals in the industry, has a long history of advocating for its members’ rights and fair compensation. With the rise of streaming platforms and the decline of traditional broadcast television, how writers are compensated has become contentious. The rapid technological advancements and changes in content consumption patterns have led to shifts in revenue streams, making it imperative for the WGA to renegotiate terms that reflect the industry’s current state.
- Digital Rights and Streaming: One of the primary points of contention in the 2023 strike was the compensation for writers in the digital realm. As streaming platforms like Netflix, Amazon Prime, and Disney+ dominate the entertainment landscape, writers sought a fair share of the profits generated from their work on these platforms. The traditional residual payment system, designed for broadcast television, must be updated and reflect the digital age.
- Fair Compensation: Writers argued that despite the booming profits of production companies and streaming services, their pay had yet to see a proportional increase. They demanded a fair share of the profits, especially given their critical role in content creation.
- Working Conditions: Beyond compensation, the strike also highlighted concerns about working conditions. Long hours, tight deadlines, and the pressure to produce high-quality content in a saturated market took a toll on writers. The WGA pushed for better working conditions and more reasonable expectations for its members.
Impact on the Industry
The 2023 writers’ strike had a ripple effect on the entertainment industry. Many television shows are facing delays, and some are even canceled due to the lack of new scripts. Film productions were halted, and the release dates of several anticipated movies were pushed back. The strike also gave rise to a surge in reality TV shows, which require less scripted content.
Moreover, the strike highlighted the power dynamics in the entertainment industry. While writers are often behind the scenes, their role is crucial in bringing stories to life. The strike emphasized the need for fair compensation and respect for the creative minds that fuel the industry.
Current State of the Strike
Warner Bros Discovery is gearing up for a significant dip in its annual profit due to the ongoing strike by Hollywood actors and writers. This strike marks Hollywood’s first dual work stoppage involving writers and actors in 63 years. Such a halt in operations has led to a pause in production across the industry, costing the California economy billions.
The actors’ strike has forced movie studios to reconfigure film schedules, especially since no celebrities are available for red-carpet events or talk shows to generate buzz. For instance, Warner Bros movie studio announced a delay in releasing the much-anticipated sequel of “Dune” from November to March. The reason was the stars wouldn’t be available to promote the film during the strike.
Previously, Warner Bros Discovery provided a financial forecast for 2023, assuming the strikes would be resolved by early September. However, with the ongoing strike, the company anticipates its adjusted earnings to decrease by approximately $300 million to $500 million for the entire year. The expected range is now between $10.5 billion to $11 billion.
The decision to postpone “Dune 2” to 2024 is believed to be a significant factor in this updated guidance. It’s speculated that Warner Bros Discovery had high hopes for the sci-fi sequel, expecting it to match or surpass its predecessor’s box office performance.
The delays in movie releases are also negatively affecting cinema chains like AMC Entertainment, Cineplex, and Cinemark. These chains are still grappling with the aftermath of the COVID-19 pandemic, and the delay of “Dune”, one of the most awaited films of late 2023, adds to their challenges.
Warner Bros also mentioned that its CEO, David Zaslav, would participate in an investor conference on September 6th. He is expected to discuss, among other topics, the impact of the ongoing strikes. The studio is now raising its full-year free cash flow expectations to at least $5 billion, with the third quarter alone expected to surpass $1.7 billion. This is attributed to the strong performance of the “Barbie” movie and factors related to the strike.