Hollywood strikes enter their 5th month, severely hurting big studios’ quarterly revenues.
Film studio giant Warner Bros expects a powerful hit to their annual revenues as Hollywood strikes enter their 5th month. The Writers Guild of America went on strike on May 2nd, more than 100 days ago. On July 14th, the Screen Actors Guild joined them on the picket line.
In early September, the Alliance of Motion Picture and Television Producers (AMPTP) proposed some terms to the guilds, hoping to end the strike. Both the writers and the actors, however, refused these terms pointing out possible legal loopholes favoring film studios.
While negotiations continue, the film industry enters its most important period of the year, with international film festivals in Venice, Telluride, and Toronto kickstarting the new film season. The strikes forbid professionals from attending film festivals, depriving studios of crucial publicity for their upcoming movies.
At the same time, large tentpoles are being delayed indefinitely because of the strikes. Denis Villeneuve’s “Dune: Part II”, set to be released in November, has been postponed to March 15, 2024.
This will cause the entire first quarter of the 2023-2024 season to have no large tentpoles, almost certainly confirming Greta Gerwig’s “Barbie” and Christopher Nolan’s “Oppenheimer” as this year’s most successful movies.
As a result, Warner Bros predicts a $300 to $500 million slash in revenues for the next quarter. “While [Warner Bros. Discovery] is hopeful these strikes will be resolved soon, it cannot predict when the strikes will ultimately end,” the company said in a statement.
Similarly, Disney’s streaming revenues disappointed expectations in the last quarter.
What are the strikes about
The reasons behind the WGA-SAG AFTRA strikes range from a series of issues, including unfair pay, low streaming dividends, and the threats posed to the industry by unregulated artificial intelligence.
Writers lament that, while big-studio CEOs earn millions of dollars yearly, they can barely afford rent in Los Angeles, especially amid a nationwide housing crisis. Furthermore, they demand a larger share of streaming revenues.
Most importantly, however, writers and actors demand AI not destroy their jobs, and be hastily regulated before it goes out of hand. This issue stems from the recent AI craze started by image technologies like Deepfake or text-based software like ChatGPT. The former allows studios to “paste” an actor’s face onto a body double, while the latter can generate text out of simple prompts.
Deepfakes are already largely in use. In the Disney series “The Mandalorian”, for example, the face of young Mark Hamil was positioned on the body of a different actor.
While Disney’s CEO Bob Iger calls the strikers’ demands “unrealistic”, the company is reportedly spending $900,000/year in AI research and development.
The last major Hollywood took place in 2008 and lasted “only” 100 days. By the end, large studios were bleeding money and were forced to accept every demand. So far, a similar conclusion appears likely for these strikes as well.
