Hollywood Writers' Strike Explained: From AI Scripts To Residual Payments

HOLLYWOOD, CA — "Hey hey, ho ho, corporate greed has got to go!" That chant — punctuated by car-honks of approval — filled the air outside Netflix's campus Tuesday afternoon as film and TV writers picketed on the first day of the Writers Guild of America Strike.

The writers, whose work stoppage began after the clock struck midnight Tuesday morning, were joined by members of other industry unions, like SAG-AFTRA, outside every major studio in Los Angeles Tuesday.

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It was a show of resolve by the WGA after the union and the group representing studios failed to overcome an impasse in negotiations over a contract that expired Monday.

"You know, this is not what we wanted to do today but it is where we are,'' writer Danielle Sanchez-Witzel ("My Name is Earl," "New Girl") told her fellow WGA members outside the Netflix building. "And together we will stay united and we will win this fight. So let's fight together!"

Like other recent actions by Hollywood unions, including the IATSE's 2021 contract showdown with the studio group, the WGA has painted its fight against the Alliance of Motion Picture and Television Producers as one of working people against corporate fat cats.

Picketers' signs outside Netflix reflected those sentiments: One mused "The CEO of Roku made $52 million in 3 months But we can't make a living??" Others were more brief: "Fair contract please."

While IATSE members, who include everyone from costume designers to editors, authorized a work-stoppage two years ago, the union overcame its negotiating impasse as its members worked through an expired contract — without a strike.

The WGA work stoppage marks the first time in 15 years that any Hollywood union has struck — the last one was also the WGA's. In 2007-08, writers struck for over three months, derailing film and TV production and causing economic woes across Los Angeles.

Back then, the disagreement between the WGA and studios centered around so-called "new media." Now, the sides' disagreement demonstrates how streaming and technology has upended Hollywood's old way of doing business over the last 15 years and how ongoing corporate consolidation has stoked that fire.

The WGA is pushing for higher residual pay for streaming content based on the show or movie's performance. It's currently a flat fee, which is a dramatic change from the pre-streaming era: Writers whose shows or movies saw success used to earn huge payouts through syndication and DVD sales.

That paradigm shift illustrates the increasingly large income gap that many Hollywood workers say plagues the industry: CEOs and other executives get paid based in part on the performance of their company's content while writers and other creatives see fewer performance-based windfalls compared to the pre-streaming days.

The WGA also wants to create industry standards for the number of writers assigned to each show, increase foreign streaming residual payments and implement regulations preventing the use of artificial intelligence for writing work.

According to the union, its latest contract proposal would net writers roughly $429 million per year while the studios' latest offer would equate to about $86 million annually.

Studios have pushed back on some union demands, noting that the entire industry is facing budget constraints and pointing to the thousands of layoffs currently underway at the Walt Disney Co. as a prime example. The studios also say writers' residuals have increased in recent years, powered largely by amounts earned through "new media."

"The AMPTP presented a comprehensive package proposal to the guild last night which included generous increases in compensation for writers as well as improvements in streaming residuals,'' the studio group said in a statement Monday night. "The AMPTP also indicated to the WGA that it is prepared to improve that offer, but was unwilling to do so because of the magnitude of other proposals still on the table that the guild continues to insist upon."

One of the studio group's main issues is with implementing mandatory staffing requirements; the AMPTP has a problem with the idea of staffing shows with a certain number of writers regardless of whether or not the project actually needs those writers, the statement said.

"The studios' responses to our proposals have been wholly insufficient, given the existential crisis writers are facing,'" the union wrote in a message to its membership. "The companies' behavior has created a gig economy inside a union workforce, and their immovable stance in this negotiation has betrayed a commitment to further devaluing the profession of writing."

If the strike extends into a similar timeframe as the 2007-08 strike, it's likely to cause economic pain — and not just for the studios. That the 100-day strik cost the local economy between $2 billion and $3 billion, according to various estimates.

The last strike disrupted production across the industry, leading studios and networks to ramp up production of reality TV, shorten seasons and cancel shows. Late night shows like "Jimmy Kimmel Live" and "Saturday Night Live" are likely to see the most immediate impact, as their writers work throughout the week to produce shows. "SNL" has already canceled this week's episode.

A strike of any significant length is likely to upend other workers' livelihoods too. Everyone from makeup artists to transportation workers will see a dramatic, if not complete, drop-off in work, given the freelance-based nature of production employment.

City News Service contributed to this report.