For Hollywood, 2023 will be remembered as a complicated and disruptive year.
The "double whammy" writers and actors strikes, the first time those respective guilds walked the picket lines together since 1960, set off a production shutdown across the entire industry. Not only that, but the labor action arrived at a critical inflection point as the introduction of artificial intelligence and rapid rise of streaming threatened Hollywood's status quo.
Writers were the first to announce a strike on May 2 after the Writers Guild of America (WGA), which represents thousands of television and movie writers, failed to negotiate a deal with the Alliance of Motion Picture and Television Producers (AMPTP).
The AMPTP bargains on behalf of studios including Disney (DIS), Netflix (NLFX), Amazon (AMZN), Apple (AAPL), NBCUniversal (CMCSA), and Sony (SONY).
It was the first time in 15 years that the writers had gone on strike as concerns brought on by the streaming boom deepened. Streaming shows often have fewer episodes and less residual income compared to traditional network television, which often means less money in the pockets of creators.
At the same time, the majority of studios are no longer just "pure play" production houses. Rather, they have their own streaming divisions, which have brought on a new set of challenges as direct-to-consumer losses mount.
In an attempt to stop the bleeding, media giants from Disney to Warner Bros. Discovery enacted mass layoffs and shelved multiple projects amid a massive wave of cost-cutting as Wall Street demanded profitability.
The WGA had been fighting for higher compensation, increases to streaming residuals, transparency around viewership data, a guaranteed minimum length of employment, writing room staffing requirements, and further protections surrounding the use of artificial intelligence.
Actors, battling similar challenges, joined their fellow writers a few months later, calling for a strike on July 14. It was the first time SAG-AFTRA, the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world, had gone on strike in over four decades.
At the time, SAG-AFTRA announced its fight would focus on more protections surrounding the role of artificial intelligence in media and entertainment in addition to higher streaming residuals as more movies and TV shows go direct to streaming.
But it wouldn't be an easy fight with both unions locked in heated, monthslong negotiations with studios.
Hollywood unions win big on wages, AI protections
The writers guild was the first to reach a three-year deal, ending a nearly 150-day strike at the end of the September.
The guild was successful in achieving many of its demands, which included increased regulations surrounding the use of artificial intelligence, minimum staffing requirements, viewership-based streaming bonuses, more data transparency, higher health and pension contribution rates, a boost to streaming residuals, and more.
The guild was also able to achieve a 5% wage increase this year, which will be followed by a 4% jump in 2024 and a 3.5% boost in 2025.
Two months later, SAG-AFTRA reached its own conclusion, striking a tentative agreement with studios on Nov. 8 to end an 118-day strike — the longest in its history.
The union said the new three-year contract, valued at over $1 billion, includes "above-pattern" minimum compensation increases, with a 7% general wage hike that "breaks the industry pattern," according to SAG-AFTRA national executive director Duncan Crabtree-Ireland.
Those minimum wages will increase by another 4% in 2024 and then by another 3.5% in 2025. Background actors received immediate pay increases of 11%.
The contract also included "unprecedented" provisions when it comes to protections surrounding the use of artificial intelligence. According to the guild, members will receive "informed consent and fair compensation" for the creation and use of "digital replicas of members."
Additionally, for the first time, there will be a roughly $40 million-per-year streaming residual bonus for actors on shows that reach a certain level of success. Pension and health caps were also "substantially raised."
Other highlights include a 200% increase to relocation allowances, new terms for hair and makeup that protect diverse communities, increases to benefit plans for episodic work, requirements to engage intimacy coordinators for nudity and simulated sex, and more.
A post-strike Hollywood
Despite the guilds' respective wins, the pain of the last six months has already been felt — and will be difficult to correct.
In total, employment in motion picture and sound recording industries declined by 44,000 due to strike activity, according to the Bureau of Labor Statistics. The strikes also contributed to economic losses estimated at around $6 billion, primarily due to lost wages.
On top of wages, delayed films, including Warner Bros.' "Dune" sequel, and cancelled programming, such as Amazon's "A League of Their Own," heavily added to losses.
But beyond the immediate damage, there will likely be larger, existential issues in a post-strike Hollywood as the entertainment industry adjusts to a new set of rules.
Already, major media executives like Disney CEO Bob Iger have preached a message of "quality over quantity" amid the streaming boom. That implies fewer shows and franchises and more limited opportunities for creators as content budgets shrink and the peak TV era comes to an end.
On top of that, the box office continues to lag pre-pandemic levels (and might not ever get back to those numbers) while social media sites like TikTok and YouTube have more successfully captured the attention of younger viewers.
Still, Hollywood is hard at work to get back on track. Late night shows have returned, top programs like "Stranger Things" have restarted production, and award show season is about to be in full swing.
The show must go on, as they say.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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