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Two Labor Strikes, Two Existential Battles

Updated: Mar 12

You’ve probably heard there are two labor strikes in the film industry right now, the WGA (writers) and SAG-AFTRA (actors). This has not happened since 1960.

Much has been made of the threat of A.I. for both groups.

But I think the strike is really about two existential issues: not only A.I., which is abstract but super-emotional, but the transition to streaming.

A.I. is about the future. The studios see the potential to save a ton of money by relying on cheap A.I. for writing (at the very least, script analysis) and acting (like replacing background performers with free digital creations). So no way do they want to tie their hands going forward.

If that was all it was, however, the studios could just lie their way through the negotiations with vague promises, as they always do. Sort of like this:

Eventually, the writers and actors would get exhausted and swallow it.

But this is really about loss aversion. The studios do not want to lose the huge gains against labor they have made in the last 15–20 years (by following their strategy of lying) in streaming numbers.

Or to be specific, the lack of numbers.

Streamers do not disclose their numbers (their analytics, how much different programs are watched). It is frankly incredible that they got away with it.

This lets them play the oldest trick in the book:

When they need to make money on Wall Street, they can make it sound like their numbers are awesome.

When they need to account to labor unions for revenue sharing, they can say the numbers are terrible.

Because there are no numbers!

They can also, to be sure, use all the precious data for their own ends, to make stickier and stupider shows that better engage their viewers.

The unions are not having it anymore. Their back-end participations have been wiped out by the transition to streaming (plus various other abuses).

I think this is the single-biggest stumbling block. The unions are saying, we want a percentage of your revenue (not profits)—and it’ll be a reasonable amount—and then we divide it up based on how much things are watched.

The studios will always be okay with writing a check to make a problem go away. The actual percentage involved—that’s just a negotiation.

It’s the concept of disclosing the streaming numbers that the studios will go to war to protect.

And this concept is not something you can do halfway. Either the streaming numbers or disclosed, or they aren’t.

So here we are: war.

I think it’s going to be long and ugly. For a deal to be made, the studios are going to have to give on something: either streaming numbers or A.I., probably a little of both.

This means the richest, most powerful C.E.O.s in the world basically need to perform legal collusion and decide upon how much they are willing to surrender.

To get there, they need to go through the five stages of grief. My suspicion is they have not even begun.

They are victims of their own success: writers and actors truly feel like they have nothing to lose by holding out for a better deal. The current deal was already apocalyptic.

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