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The Teamsters, a US union representing 340,000 UPS employees, are facing the possibility of a strike that could disrupt parcel deliveries. However, the spotlight has been stolen by Hollywood’s actors and scriptwriters who have gone on strike simultaneously, a double-bill industrial action not seen since the days of Ben-Hur. The presence of famous actors like Mark Ruffalo on picket lines has added to the media frenzy surrounding the strikes.
The estimated economic impact of the Hollywood strikes is projected to be up to $4 billion, according to the Milken Institute. These strikes are significant because they involve the impact of artificial intelligence (AI) and the fair distribution of profits in a digital era. As intangible assets increasingly contribute to corporate profits, creators of intellectual property are seeking a larger share. The outcomes of these negotiations will set a precedent for other industries reshaped by technology and the ongoing battles between capital and labor.
The studios and suppliers are at odds on various issues, but the main points of contention revolve around the sharing of streaming revenues and the potential for AI models to replicate the work of actors and writers. Streaming networks require significant investments, and with the decline in cinema and cable TV revenues due to COVID-19 and changing consumer habits, studios’ profits have been affected. Studio executives question why unions demand the same number of writers for an eight-episode season of Stranger Things as they do for 24 episodes of Seinfeld.
Additionally, AI models have raised concerns about the potential automation of scriptwriting, even without human involvement in the creation of initial drafts. Both stars and extras worry about the use of their digital likenesses without consent or appropriate compensation.
The crisis in Hollywood presents short-term opportunities for international competitors, including Pinewood Studios and Bollywood, as US actors and writers may feel threatened by foreign productions. However, other global entertainment hubs will eventually face similar challenges as technology reshapes the industry.
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The first major issue is the sharing of streaming income. Actors are demanding a 2% share of revenues generated by platforms like Netflix and Disney+, with independent audits to ensure accuracy. The industry is hesitant to share data on its successful and unsuccessful productions, but it will likely need to increase royalty payments to actors and writers who have been financially impacted by the shift towards streaming.
The second issue is the protection of actors’ digital likenesses, ensuring they are used only with compensation and consent. Compensating writers for AI-generated scripts that are “inspired” by their previous work presents a more complex calculation, highlighting the need for regulatory intervention to resolve these matters.
Both sides of the dispute have highlighted the wealth of individuals at the top of the opposing industry. While actors earning millions of dollars per film may not garner sympathy from struggling workers, Disney’s CEO Bob Iger drew criticism for calling actors’ demands “not realistic” after signing a contract increasing his own annual bonus target. To rebuild trust, media tycoon Barry Diller has suggested a 25% pay cut for both top actors and executives, although this proposal seems unlikely to materialize.
The high-profile nature of the entertainment industry and the resonance of the issues at stake ensure that the resolution of the Hollywood crisis will attract significant attention from a broad audience.
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