Hollywood is on the brink of its first writers strike in 15 years, but this time it's not a rerun of 2007. The Writers Guild of America (WGA) has voted to authorize a strike if a deal with major studios is not reached by May 1st. If a strike does occur, it will cause a full production shutdown, affecting actors, stage crew, studio teams, and the biggest companies in Hollywood, as scripted series across both network TV and streaming grind to a halt.
Many in Hollywood have weighed in on the potential strike, with Netflix (NFLX) executives directly addressing it during the company's Q1 2023 earnings call. Netflix said it has a long and robust slate of content just in case there is a strike, but executives reiterated they're at the table and want to find a solution.
Yahoo Finance’s Allie Canal breaks down the latest for investors.
Video Transcript
ALEXANDRA CANAL: Hollywood is facing its first potential writer's strike in 15 years. But it's not a rerun of 2007. Here's what you need to know. The Writers Guild of America, AKA, the WGA, represents thousands of television and movie writers. April 17, the union voted overwhelmingly to authorize a strike if a deal with major studios was not reached by May 1, the day the Guild's three-year contract expires.
A strike would cause a full production shutdown, affecting actors, stagehands, studio crew, and the biggest companies in Hollywood as scripted series across both network television and streaming grind to a halt. The WGA have been negotiating with the Alliance of Motion Picture and Television Producers, which bargains on behalf of the studios.
The talks have centered on pay concerns brought on by the streaming boom in addition to other fundamental changes within entertainment like the recent wave of cost-cutting measures, which have included layoffs and scrapped projects. What's different today versus prior years is that many of these studios are not pure play production houses anymore, meaning they have their own streaming divisions as well as their own profitability concerns.
And as we know, streaming shows often have less episodes and less residual income compared to traditional network TV, which means less money in the pockets of these writers. Many in Hollywood have weighed in on the potential strike with Netflix executives directly addressing it during the company's Q1 earnings call.
TED SARANDOS: We don't want a strike. The last time there was a strike, it was devastating to creators. It was really hard on the industry. It was painful for local economies that support production. And it was very, very, very bad for fans.
ALEXANDRA CANAL: Netflix said it has a long and robust slate of content in the event of a strike. But executives reiterated that they're at the table and they want to find a solution. It's similar to what we heard from Warner Brothers Discovery CEO David Zaslav, who told reporters he was optimistic a deal could be reached in a way that's fair to all parties.
But they're assuming the worst from a business perspective, and also have backup content produced and ready to go if needed. While some analysts have suggested a strike could be good for cash flow since no new content means no new expenses, the general consensus is that a strike would not be good for the industry.
JASON BAZINET: At the end of the day, the street doesn't like the uncertainty that comes with a strike. It's going to just inject more noise as the cadence of new content slows down.
ALEXANDRA CANAL: With so much at stake for both parties, the pressure is on to reach a deal. Or else, the industry faces yet another major blow just three years after the pandemic.
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