The continued Hollywood strike making it a bittersweet time in Hollywood, with many celebrating the recognition of their work with awards nominations as others pace the picket lines. Hollywood actors strike vs. Hollywood studios strike will have an enormous economic impact. First time in 63 years both Hollywood actor strike and the Hollywood strike for writer is happening simultaneously, and the financial and human toll will be catastrophic.
Following four weeks of intense negotiations between SAG-AFTRA and the studios, two sticking points remain at the forefront: AI and residual pay for streaming. With no resolution, Hollywood has now officially shutdown.
Hollywood economic fallout
The human cost of this Hollywood strike has already been felt. As per analysts and legal experts, there is someone or other currently moving out of their home because the financial impact of Hollywood shutdown has already devastated them.
The Hollywood actors strike and the Hollywood strike is impacting people’s life leading to many having garage sales and selling items online to compensate for lost income, as per a report.
A recent Los Angeles Times article detailed how this writers’ strike will be much more costly than the one in 2007. The trickle-down effect could touch every facet of the leading to Hollywood economic fallout, including the housing market.
Impact of Hollywood shutdown
This Hollywood strike could lead to an economic fallout surpassing the estimated $2.1 billion lost in the 100-day strike 16 years ago. That strike solely included the writers, so you can see how this could be worse.
The Milken Institute released a report following the 2007 strike that estimated the loss of 37,700 jobs. The cost of this Hollywood strike could exceed $3 billion, with Hollywood’s biggest stars joining the writers on the picket lines. Unless a deal can be reached quickly, Tinsel Town is in for dark days.
Dave Helmreich, Chief Commercial Officer of Innovid, concurs that a writers and Hollywood actors strike will drive dollars to sports, OTT and AVOD, a space where money is already flowing. “Amazon and Apple have already pushed towards seemingly engagement-guaranteed content, like live sports.”
In addition to actors and directors, each film and television series employs roughly 300 crew members who will be out of work. These include carpenters, caterers, hair/makeup/wardrobe, accountants, prop houses, set designers, transport workers, and production and personal assistants. Most of these workers also have families and pets that rely on them.
The writers and actors have already felt the impact. Most writers go show-to-show and job-to-job, and many actors are day players and do not earn seven-digit incomes like A-List celebrities.
Analysts on Hollywood actors strike
Per the LA Times article, multiple economic experts predict that the current situation is even more complex due to lingering instabilities caused by pandemic shutdowns, the numerous changes to the entertainment industry because of streaming and those concerns about AI replacing writers and actors.
According to Alicia Reese, VP of Equity Research at Wedbush Securities, there’s a benefit to the writers’ strike expanding to a Hollywood actors strike as it could lead to a quicker resolution. “Studios didn’t let the director’s strike for long, and the actors are even more crucial because they’re necessary for marketing ahead of big films in the near term.”
As for the Box Office, Reese says it could suffer soon if movie stars are barred from marketing, with opening weekends not getting the traction they would with a robust press tour.
As for cost trickling down to the consumer, Reese adds that studios with streaming services will have to raise prices if content costs rise. “Streaming services could beef up their advertising tiers and increase their revenue that way.”
Ron Zambrano, partner and Employment Litigation Chair at West Coast Employment Lawyers, “I think what we are seeing now playing out in the media is really all theater. Everyone needs each other in this case. The actors need the studios, and the studios need the actors. The question is how much each side is willing to lose before a deal is made. They’re playing chicken.”
