| | MR Online Striking actors and writers in LA, July 17, 2023. Source: Benoît Prieur, Wikimedia Commons

The (Television) Season of Our Discontent: Streaming and Striking in 2023

In the TV business, the year 2023 can be broken into three parts. It began, following the previous year’s market doubting of the profitability of streaming, with retrenchment as the studios cut back on both product and labor in an attempt to show solvency and address back debt. On both fronts, these cutbacks amounted to an attack on labor and, in the second (and major) part of the year, labor struck back. The writers and actors, having had enough of belt tightening and penny pinching, joined many other unions in either threatening to strike or striking, in what in the United States as a whole—and Los Angeles in particular—was a summer of labor discontent that continued into the fall. Through their actions, the workers changed how the story was written, moving it from being a tale of woe about the fate of the studios to one where the studios were culpable for their bloated salaries and failure to reward those actually creating the profit, one in which workers were entitled to part of a still enormously bountiful industry.

The third part of the year, the current phase, sees writers, actors and directors winning major concessions not only in salary and benefits, but also on controls and limits on the use of artificial intelligence, an area unions in many sectors are concerned about, and in having at least proposed that profits and bonuses be tied, as Wall Street is also claiming, to streaming results, with the producers for the first time required to at least give a glimmer of the mass of audience data and actual viewer data they so jealously guard. However, as these workers return to work, the retrenchment continues in this now more open class struggle, as the major studios attempt to limit the gains by continuing cutbacks and, in some cases, potentially folding or selling off assets.

Recently, for likely the first time, a reporter on mainstream media used the term “forever wars” in querying an administration official about the genocide in Gaza, a sign that the U.S. imperial notion of one “just” war after another is breaking down. What is becoming apparent in this snapshot of a portion of the entertainment industry is that one of the most enduring of the forever wars is the one waged by U.S. capital against its workers—and that forever war is now being questioned on the domestic front as well.

A Fool’s Errand

The year in the television studio and streaming industry began with the fallout from the previous year’s Wall Street attack continuing. In March 2022, the subscriptions to Netflix, the leader in the field, fell. Investors then stopped bankrolling the industry based on the tech bubble model of perpetual growth, which in the streaming case is measured in subscriptions, as the indicator of profitability. Stock prices fell as investors demanded immediate results, looking askance at both the lack of profits and the amount of debt on the books for the major streamers, with Disney, for example, Netflix’s strongest competitor, losing $1.1 billion in the first quarter and Warner Brothers Discovery (WBD) now $44.80 billion in debt.

The response of the major companies was to cut back on jobs and production, with Disney vowing to get rid of seven thousand jobs. Disney, Netflix, and what was then HBO Max all not only cut back on programming, but also canceled movies and series that were already shot in order to save money on post-production, marketing,  and creators’ residuals while claiming massive tax write-offs. The “strategy” was, essentially, making money by not making product, the opposite from the “content arms race” that had seen the growth of “peak TV,” when, in 2022, 599 series were produced.

The most egregious offender in this category was WBD’s David Zaslav, who had been tagged to lead the company because of his array of cheap reality TV series on the Discovery Channel and who brought along with him the Discovery Chief Financial Officer known for his cost cutting to supervise the bloodletting as the order of the day became “Turn the cameras off.”

This went on throughout the industry. So far this year, 119 shows had been canceled or not renewed, among them some of the most expensive (Disney’s Willow, Netflix’s 1899) shows, as well as some of the best and most socially responsible series (ABC’s Alaska Daily, Netflix’s The Chair, Hulu’s Reboot, HBO’s Black Lady Sketch Show). Taking the cake, though, was WBD’s refusal to release Batgirl, a superhero film with a major role for an African-American actress, and the fourth and final season of Academy Award Winner Bong Joon-ho’s class-conscious environmental apocalypse series Snowpiercer after both had already been shot. (The series is still looking for a broadcast or streaming home.)

In the midst of this slaughter, Zaslav was deemed “the most hated man in Hollywood.” The creative workers in the industry did not fail to note that he rewarded himself for this penny pinching by taking a hefty salary raise, and that the almost half a billion dollars he earned over five years with the company made him “one of the highest paid executives in America, earning far more than the heads of much larger companies.” During the resulting strike, it was noted by struggling writers on the picket lines that his 2021 salary was “about the same level as 10,000 writers.”

This cost cutting is partly the result of the Wall Street pressure along with the continual decline of cable subscribers, as “cord cutters” became a popular phrase this year, which in turn has led to declining revenue from both cable and network advertisers, who also noted the decline in network audiences due as well to streaming and to the competition from social media and gaming.

However, this debacle is also partly the result of bad and/or greedy management, something the writers, actors, and the general public are aware of, but that is seldom touched on in the financial press. “Cord cutting,” after all, is in reaction to the high price of cable as producers and cable owners collaborate to continually raise prices on increasingly cash-strapped consumers plagued by inflation, which is itself partly brought on by corporate price gauging as fewer quality series are produced in the studios’ drive to go directly to streaming. Equally, the strategy of cost cutting to show profit instead of amping up production to attract new audiences is a penny-wise/pound-foolish short-term strategy that in the long run will cost the companies as they tailor their planning not to audiences but to their Wall Street stock price. Zaslav has also proved to be out of touch with the new, more diverse Hollywood, as he imported a mostly male management team from Discovery and bankrolled as a pet project a film for $45 million, called Alto Knights, the three principle creators of which are white men in their eighties and nineties.

Once More onto the Picket Lines

The labor discontent that led to the writers’ and actors’ strikes was part of the larger movement of a besieged U.S. working class using walk-outs, strikes, and threats to strike not only the entertainment industry, but also in the service industry and in the heart of what was once the industrial United States. Recently unionized workers in some Starbucks cafes walked off the job to protest understaffing during a holiday giveaway. Federal Express workers won huge gains by threatening to strike. Most presciently, the union ofUnited Auto Workers (UAW) launched a plant-by-plant series of strikes against the top three automakers. making headway—though many workers thought not quite far enough—in recuperating gains lost over many years due to accumulated inflation and cost-of-living increases.

In the strikes in Los Angeles, the writers, who had in some way built the city, claimed they could not make enough money to live it, due to rising housing costs. Their plight was acknowledged by an unnamed studio executive, who claimed the strategy of the producers in not negotiating was “to allow things to drag on until union members start losing their apartments and losing their houses.”  Workers were also strapped by the Biden Administration’s raising of interest rates in what it claimed was the only way to fight inflation (as opposed to price freezes) thus making it harder and more costly for workers to make housing payments or borrow on credit—and this from the self-proclaimed “strongest labor president you’ve ever had.”

Neither strike was about making more money for the privileged. Rather, both were in solidarity with average workers in the field, with the writers campaigning to stop cuts to the number of writers in the writing rooms and actors winning concessions for background actors. Both strikes also called attention to and called out the huge salaries and extravagant lifestyles of studio and streaming heads, with Representative Alexandria Ocasio-Cortez asking in an actors’ rally in New York, “How many private jets does David Zaslav need?” Meanwhile, the leaders of SAG-AFTRA described these executives as the “land barons of medieval times.” The studios could not plead poverty with, for example, Disney’s net income for the majority of the strike period jumping 63 percent and its revenue rising 5 percent, to a total of $2l.24 billion.

As offer after offer was not met with a counteroffer and as the heads of the studios and streamers did not even attend the negotiating sessions until months after both strikes started, it became clear that the strategy was to let the strikes go on as a new way of cost cutting, while blaming workers for a steady streaming diet and fall TV season of cheap products, consisting of game shows, reality TV and reruns. Even the settlement had the air of cheapness as the producers first signed a contract with the writers, the provisions of which would set the table for the actors’ contract, but then waited more than a month to sign with the actors because they were not needed for production until the writers had time to prepare their scripts.

In general, newspaper coverage and public opinion was favorable to the strikers. However, one glaring (but less obvious) —strikebreaking mantra was California Governor Gavin Newsom’s oft-repeated sound bite that the strikes were costing the state first $5 billion and then $6 billion in lost revenue. The UAW’s Sean Fain provided an answer to this pressure to settle for a lesser deal when he was confronted with a similar argument—that the autoworkers’ strike would cost the car companies too much lost revenue and market position as nonunionized companies moved ahead—instead claimed that all would benefit from a hefty union contract. The moment a settlement was reached, Fain said, the UAW would be organizing workers in the nonunionized companies; workers who would want to unionize when they saw the gains the company was able to secure. In fact, Honda, Toyota, and Hyundai all raised their workers’ salaries to approximate the UAW contract. The answer to Newsom’s accusation is that the union victories may result in across the board raises for workers in California, not net losses. Already in the entertainment industry, next spring will see not only the Teamsters but also below-the-line production personnel (gaffers, camera operators, make-up, and set designers)—each piggybacking off the writers’ and actors’ gains—negotiating a new contract. Meanwhile, urged on by their fellow workers on the picket lines, production workers at Walt Disney Animation and visual effects workers at Marvel voted to unionize and, during the strike, independent producers, who are under pressures similar to writers and actors, began a conversation about unionizing.

A Hit, a Hit, My Kingdom for a Hit

There were important gains from both the writers’ and actors’ strikes, the first being the second-longest in history of the Writers Guild of America (WGA) and the actors’ being the longest in the ninety-year history of SAG-AFTRA. WGA announced that it had won concessions amounting to $233 million annually, including a 12.5 percent increase in wages over the first year, as well as gains in length of employment, putting restrictions on mini-rooms of writers in pre-development, who were then let go), prompt payment, health care for the members of a writing team, and increased residuals for reruns, as well as a share of foreign residuals. It was clear that the writers’ and actors’ strikes went beyond the point where the studios could simply cut costs, and actually threatened the entire business. The producers’ negotiating stance turned, as one commentator observed, from “macho, tough-guy stuff” to the point where even The New York Times, which generally remained neutral regarding the strike, conceded that “the moguls capitulated on just about every front.” Subsequently, the actors won a 7 percent first-year raise, better health care funding, compensation on streaming shows and films, and a mandatory minimum number of background actors hired under union compensation. Their chief negotiator, Duncan Crabtree-Ireland, called the contract and the strike “a very clear signal to other unions,” because the actors proposed the terms of the negotiation, instead of the producers’ association, the Alliance of Motion Picture and Television Producers, making proposals,  with the actors modifying and then accepting the proposal.

One of the most crucial questions of both strikes was compensation from streaming for creative personnel. Residuals and bonuses for television hits in the older era of Nielsen ratings and syndication were a matter of public information, since both ratings and syndication contracts were announced. Part of the advantage for the producers in the streaming era is that creative personnel have no access to the data. They do not know how successful their shows are or how many viewers across the globe are watching them. Both WGA and SAG-AFTRA won concessions from the producers’ bargaining unit, which has now pledged to disclose the total number of hours streamed per program, which will then be used to compute viewership bonuses for the WGA—said by the union to amount to a 76 percent jump in such payments. The actor’s union, SAG-AFTRA, went further, demanding 2 percent of streaming profits, which the producers rejected—though the union, following the WGA, also won bonuses based on the performance of streaming films and series.

Ted Sarandos, the head of Netflix—the most well off of the streamers, which, during the strike kept up a steady flow of content and profited immensely, with its shares rising 37 percent—called the actors’ demand for a share in streaming profits “a bridge too far.” Of course, it is the actors and writers who create the content that allows these former moguls to see themselves as tech barons, now in the business of digital distribution, rather than of content creation. In a parallel enterprise, the National Basketball Association (which could also be said to be part of the entertainment industry) owners and players, who are the actual creators of the content, share profits 50-50. The team owners have stepped across this “bridge too far” and still have a very profitable enterprise. SAG-AFTRA president Fran Drescher acknowledged the actors’ defeat but also the progress made: “We’re getting the money. We opened a new revenue stream. What matters is that we got into another pocket.”

The gains made limiting the use of artificial intelligence may be just as crucial going forward when it comes to the question of shared streaming profits. The Biden Administration’s proposed AI limits hardly discuss at all the use of AI to automate, and thus cut, jobs. Instead, the mostly voluntary rules focus on national security, AI-distorted images, and data privacy. The task of regulating this threat to employment has now fallen to individual unions, and is an omnipresent concern in recent negotiations. Now even the new contract for hotel unions in Las Vegas, for which they negotiated using the threat of a strike just before a crucial Formula 1 racing event, puts guardrails on attempts to use robots and AI to pour drinks, check in guests, and clean rooms.

The writers won concessions that prevent AI from reducing or eliminating writers and their pay, the most widespread fear being that AI-generated studio and streaming service scripts would then simply have a writer editing or “tending to” the work of the machine. They also won the right to refuse to have their work used to train AI services that could be used to limit their employment in the future. However, the studios hung onto the right to use their past scripts to continue to train AI, indicating that they plan to employ the service in the future to try to circumvent writers.

The problem here is that, while the union won concessions with the studios, there are no such guardrails in place in AI tech companies, which are also free under the Biden guidelines to loot past creations to enhance the service. The actors won the important right to consent to or forbid the use of “synthetic fakes” or “AI objects,” which can fabricate a kind of Frankenstein character by bringing together well-known features from several actors—though they were criticized for not forbidding this use entirely. The coming attack and maximum profitization of AI is forecast by the reinstallation of Sam Altman, a proponent of a no-holds-barred use of AI beyond any ethical consideration, as head of one of the top companies, Open AI. A French sociologist, head of AI research in Grenoble, described Altman, in terms that could now be used to describe the multibillion dollar industry as a whole and which the Hollywood creatives will have to contend with, as having a vision that is “radical, savage and transhumanist.”

Exacting a Dull Revenge

At the time of writing in late 2023, the writers are now back to work, the actors are expected to ratify their contract, and the Hollywood production wheels are grinding. The class war and tensions that were so openly exposed at the time of the strikes, however, have not gone away. Producers are promising more cutbacks in production, claiming that, because of the new contracts, the cost of making a show is now 10 percent higher. One established screenwriter predicts that “A lot of careers and even entire companies are going to go away over the next year.” Of course, after any strike there is often punishment meted out by the company to those workers who were most vocal during the strike. In the area of cost cutting for example, the writers won a guarantee of six staff members for shows with thirteen or more episodes; we can now expect the new standard season lengths will likely become twelve episodes in order to avoid the cost of hiring another writer. As far as the companies themselves, Netflix is still highly profitable, and Amazon and Apple can afford the increased costs in their streaming division, as these are offset by profits in the main areas of these companies. However, Disney+, for example, has now announced it is merging its all-family content with Hulu’s more adult content, and is said to be in favor of possibly spinning off its network channel ABC while selling a share of its long-time cable staple ESPN. Peacock, the Comcast streaming service, lost $2.8 billion in 2023, while shares of Paramount, the CBS service, have dropped 50 percent since May. One way, then, to enact revenge for the success of the strikes is to simply plead poverty and drastically cut the number of series.

As for the companies’ CEOs: as the New York Times suggested, if WBD’s Zaslav gets in more trouble, there is always the possibility of selling the company to the ubiquitous Saudi money eager to find new investment opportunities. Disney chief Bob Iger is also fending off criticism from “activist” stockholder and investor Nelson Peltz, who continues to buy stock in the company in an effort to be named to the board, and who is demanding even deeper cuts than the seven thousand announced job losses, many of them already implemented. Only in the business press would someone who is screaming for sacking more employees after a year of firings be called an “activist.” It is this kind of phony activism that last summer and, now, back on the job, that the writers and actors continue to counter through their own genuine activism in favor of a more equitable industry and country.