The actors’ strike and the threat to entertainment

Sam Hawley: Hi, I’m Sam Hawley, coming to you from Gadigal Land. This is ABC News Daily. With two new big Hollywood blockbusters just out. You might be thinking of heading to the movies. Well, make the most of it, because if an actors and writers strike in America keeps going much longer, there’ll be very few new films to watch this year and maybe next. Today, senior entertainment writer at the LA Times, Meg James, on the worldwide impact of the strikes and why artificial intelligence is a big reason why Hollywood stars have downed tools.

Sam Hawley: Meg, the picket lines in Hollywood are getting bigger by the day. Just tell me about what’s been happening in the last few days.

Meg James: Well, what happened was talks broke down between the group that negotiates on behalf of the big studios and the group that represents the actors, SAG-AFTRA.

News report: It’s curtains for Hollywood, at least for the foreseeable future. The president of the Screen Actors Guild, Fran Drescher, better known as the former star of the 1990s sitcom The Nanny, says the deal being offered is insulting.

Fran Drescher: We are the victims here. We are being victimized by a very greedy entity.

Meg James: And they declared a strike. The picket lines, which had been, you know, pretty well attended by writers, but a much smaller group suddenly swelled into huge throngs of people protesting outside Netflix, NBC Universal, Walt Disney Company, and others.

Sam Hawley: There are some pretty well-known people out there. Susan Sarandon, she was talking at a rally in New York.

Susan Sarandon: I’m here because I’m in the SAG-AFTRA union. And I’m also here because of the writers union. So we’re in an old contract for a new type of business and it’s just not working for most people.

Sam Hawley: It’s important to note, isn’t it, as well, that while these rallies are taking place in the United States, they are having an impact around the world.

News report: At least two major productions in Australia have been impacted by the Hollywood shutdown.

News report: Apples Never Fall is an upcoming miniseries. It was expected to inject nearly $80 million into the local economy.

Sam Hawley: So it’s having a big impact everywhere?

Meg James: Oh, yes, it’s having a huge impact. They were having a major premiere in London for the movie Oppenheimer and the cast members – they got up in the middle of the premiere and just walked out.

Sam Hawley: What a moment that was. It included, of course, the likes of Kenneth Branagh, Matt Damon, you know, some really big stars.

Kenneth Branagh: There’s an existential threat to, you know, the industry that needs to be addressed. It’s being addressed. It’s a painful process, but it has to be done.

Meg James: I think this strike is going to be devastating for the industry because while the studio executives thought that they could weather a storm by the Writers Guild, which is about 12,000 members, the Actors Guild walkout has shut everything down. We’re talking about, at least in terms of membership, 160,000 members of SAG-AFTRA.

Sam Hawley: Wow. Yeah, it’s a big, big group. And it’s unusual, isn’t it, Meg, for the Writers Guild and the actors to join forces like this, they haven’t done it for a while.

Meg James: Oh, not since 1960. 1960 was the last time there was a twin strike in Hollywood.

Sam Hawley: Yeah. Okay. So there’s been a lot of time in between. There have been other strikes. Of course, we saw in the 1980s there was strike action by actors, even our own the late Olivia Newton-John. She was speaking with Countdown at the time.

Olivia Newton-John: We have a little problem, a little problem in America at the moment. There’s a SAG strike, which is the American Actors Union who are on strike for more money. And being a member of SAG, I have to comply with their wishes.

Meg James: Well, actually, it’s interesting because you mentioned past strikes, and the strike in 1960 was about a fear that television was going to usurp the money that the actors receive from acting in feature films. Then in the 1980s, it was video cassettes. In 2000, 2008, it was a fear of what the Internet would do. And now the streaming revolution, Netflix, the Amazon have changed the economy.

Sam Hawley: So now let’s have a look at why they are striking at the moment.

Meg James: Basically, it used to be I wouldn’t say easy, but it used to be that a mid-level writer would have a decent income because they would be writing like 20, helping write 22 episodes of a television show for a season. And now these streamers are ordering much fewer episodes. And so the payment based on episodes is smaller and they’re tied up waiting to write the next season. So you have just tectonic changes in the way television is made. And so that’s sort of filtered down to how people are paid.

Sam Hawley: Right, okay. And so the writers began their strike action about three months ago. It’s been going on for a while. What were they demanding?

Meg James: Well, what they were demanding were several things. One was, of course, higher minimum rates to work. They also wanted increased residuals to account for the fact that the United States is no longer the main source of revenue. International distribution, as you know, is huge.

Sam Hawley: They want more residuals. What are residuals and how do they differ with streaming with the new way we watch movies?

Meg James: Well, that’s a very good question. And that’s the core of one of the demands from both the writers and the actors. In the past, a studio would make a TV show. It would run on a broadcast network.

If it was hugely successful, you know, 4 or 5 seasons. They would accumulate the episodes from 4 or 5 seasons and then they would sell that to a television station group, a cable channel, or eventually a streamer like Netflix at every turn, every time they would sell that show again, these actors and the writers and all the people who were the profit participants would get a residual.

They would get a small percentage of their fee. Now, with streaming, those windows don’t exist anymore. Those windows of other opportunities. People are hired and they’re paid once a lump sum to participate in this show.

Meg James: Netflix, you know, because they have operations around the world, they don’t want to pay people the first time. And then, you know, should the show go to Australia or New Zealand or, you know, India, they don’t want to continue to have to cut these checks. So they want to give a larger fee upfront. But once again, you know, the model has changed so dramatically and now most writers are working at the minimum.

Sam Hawley: So why now have the actors joined in with the writers? Even our own Margot Robbie, of course, aka Barbie. Did she walk off the job?

Margot Robbie: Absolutely. No, I am very much in support of all the unions and I’m a part of SAG, so I would stand by that.

Sam Hawley: So why are they joining in?

Meg James: Well, the actors wanted to show solidarity with the writers who were already out on strike. I think the other thing that happened was these actors got terrified, frankly, of artificial intelligence and how that would be used to eliminate a lot of what we call background actors or extras who might not have a speaking role but are sort of in the background of a scene. And for many working actors in Hollywood, this is their main gig.

This is how they make a living. And they’re fearful that if a producer just sort of, you know, types into a computer and says that they want an actor that’s this tall and has this particular look that a digital image that was based on a real person would pop up and therefore eliminate all of these people’s jobs.

Sam Hawley: Yeah, it’s amazing that they see that as a real threat, I suppose, to the industry.

Meg James: Oh, for sure. And I talked to some experts late last week and they said that the fears, you know, are for good reason. You know, producers have already used AI to simulate big crowd scenes. But the question is, how far will this go? And again, will they be able to, like hire someone and make a digital copy of this person’s image and then use that image in perpetuity without paying the actor? And that’s what the actors are fearful of.

Luke Cook: When you do go to work as an actor, we’re not getting paid fairly.

Sam Hawley: Luke Cook, he’s an Australian actor over there in Hollywood and he’s been speaking out. He’s trying to, I guess, remind people that not all actors are millionaires.

Luke Cook: So the actors that a lot of people are probably thinking about are George Clooney and Brad Pitt. This strike will not affect them. Essentially, they’re going to be making the same after.

Meg James: Well, this is true. The majority of the actors who are working in Hollywood are, you know you know, trying to make ends meet. Names that we all know they’re handsomely compensated. But think about it, that’s only a very small fraction of this whole working Hollywood.

Sam Hawley: We like our movies, don’t we? So we want them. We had Covid and it wasn’t very nice that we didn’t have many movies to go and watch. We don’t want to end up there again.

Meg James: Well, this is one of the things that, you know, Bob Iger, the head of the Walt Disney Company, said this is like the worst possible moment for these strikes because the movie theatres, the movie industry hasn’t fully recovered from Covid.

Bob Iger: This is the worst time in the world to add to that disruption. There’s a level of expectation that they have that is just not realistic, and they are adding to a set of challenges that this business is already facing.

Sam Hawley: Bob Iger. He was speaking there on CNBC and his comments did annoy quite a few people in the industry. But Meg, what’s your prediction now? Who’s going to blink first?

Meg James: Well, you know, I do think that with two guilds striking simultaneously, it’s going to put more pressure on the studios to find a resolution. Right now, there are no talks. And if talks don’t resume until September or October, then there’s a very good chance that no new content will be made in this entire year. It might be till next year, and that will cause problems and shortages for people who are not participating in the strike, for instance, the theatre owners or the people who sell popcorn there, or the people who, you know, clean the red carpets, everyone’s going to be hurt by this strike.

Fran Drescher: This is a moment of history that is a moment of truth. If we don’t stand tall right now, we are all going to be in trouble.

Sam Hawley: Meg James is a senior entertainment writer at the LA Times. Netflix has 238 million subscribers globally, and its revenue rose by 3% in the last quarter to $8.2 billion. This episode was produced by Veronica Apap, Anna John, and Sam Dunn, who also did the mix. Our supervising producer is David Coady. Over the weekend catch This Week with Sarah Dingle. She’ll be looking at the extreme heat across the northern hemisphere. I’m Sam Hawley. ABC News Daily will be back again on Monday. Thanks for listening.