What A New And Improved Hollywood Might Look Like

Hollywood will never be the same, and that’s a good thing. The Writers’ Strike of 2023 officially ended today. The hope now is that SAG-AFTRA will join in the deal-making so everyone can finally return to work after a nearly five-month (148-day) work stoppage.

Following the WGA’s tentative agreement with the Alliance of Motion Picture and Television Producers on September 26, the two sides agreed on a new three-year Minimum Basic Agreement with the Negotiating Committee, the WGAW Board, and WGAE Council voting unanimously to recommend its terms.

The agreement will go to eligible voters from both guilds for a ratification vote from October 2 through October 9. Writers can return to work during this process, and if all goes well, Hollywood will be back up and running within the next six to eight weeks.

Should the deal go through, the writers have secured some significant wins, including a 12.5% pay increase, starting with a 5% bump when the contract is ratified. As for royalties, the writers will get a 76% increase in foreign streaming residuals and a viewership-based streaming bonus.

The deal also required minimum staffing for studio and streaming TV writers’ rooms. As for AI, a sticking point in the negotiations, the two sides established guidelines regulating its use.

So, what does this mean for the consumer? Industry experts shared their thoughts on what this new and improved Hollywood landscape will look like post-strike.

Agent and Senior Vice President in the TV department at Gersh, Jeff Greenberg, says we are heading back to a “big four” TV model. “I see that trend continuing and each of the streamers continuing to embrace FAST networks.”

Greenberg is referring to free ad-supported streaming television services, similar to linear or cable TV. Such platforms include Pluto TV and Samsung TV Plus. “Once the viewers experience and embrace these, the momentary contraction we are about to see will hopefully form a new renaissance in programming. I think the viewer will be excited to see “what’s on” and stop “tile surfing.”

Greenberg also expects television to embrace the new Spotify model of selling ads per user instead of per show. “It’s the proven Google model. I’m impressed with Peacock putting an ad on screen when you hit pause. I think we will see all streamers utilize that space in interesting, hopefully, nonintrusive ways.”

Per Greenberg, there is one certainty post-strike. “There will be fewer shows because there are probably too many. The upside to fewer shows is that each show will have a greater chance to grow organically and potentially stay on the air for many years. TV has always been about building long relationships with characters. I’m excited for shows to last longer and to stay with the characters created by brilliant writers. I’m bullish on the future of television content in that it’ll be more like it was ten years ago and less like today. TV drives the zeitgeist of America and the world.”

CMO of LG Ad Solutions, Tony Marlow, agrees with Greenberg regarding FAST services. “A noticeable pivot occurred in viewer preferences as many turned to unscripted content, such as sports, reality television, and live events. People have also been diving into the vast back catalog of on-demand streaming and international content available on subscription and FAST services.”

According to Marlow, this pivot has broadened consumers’ viewing behaviors. “It will be interesting to see how persistent the new habits are upon the return of fresh scripted content. For marketers, if the tentative WGA deal is finalized, we can anticipate a resurgence in Hollywood advertising budgets as the industry seeks to promote upcoming programming, which seems to be a win from all sides if successfully finalized.”

Dave Helmreich, chief commercial officer at Innovid, pointed out the many challenges large legacy media companies still face. “They’re still dealing with challenges in streaming business models, investing in creating valuable content, managing consistent consumer churn, audience fragmentation, and significant technology investments. If the goal is to maximize the time consumers spend engaging with content, the studios, actors, and writers need to figure out how to return to creating content that delights their customers ASAP.”

Adaptability is key for Chuck Malkus, executive producer and adjunct professor at Florida Atlantic University. “Everyone in our industry is now prepared to adapt to new revenue models. The studios will see content driven by creatives with a possibly larger role in every project. Because writers will get paid more, they’ll likely be more directly involved and have a bigger stake in the product.”

Malkus predicts that there will be a 12-month adjustment period as the studios adapt to this new way of doing business. “The bottom line is that artistic integrity has been restored to pre-artificial intelligence levels.”

Daniel Dávila, founder and principal of Divisadero Pictures, spoke to the technological shifts in streaming and AI that led to the strike. “The streaming model fundamentally shifted the unit economics of content but was warped by a decade-long land grab, a tech sector strategy that didn’t suit legacy media companies. The net result was a revenue model that didn’t balance with increased costs and a labor pool that was larger than it had ever been and starving simultaneously.”

Dávila believes the future is uncertain. “This mismatch has not worked its way out yet. Consolidation, collapse, and retrenching are in the future. This new agreement is a relatively marginal gain for a pool of workers with little to no leverage no matter what the union claims.”

Regarding AI, Dávila sees even more uncertainty on timing and scale but says it will play a role in the entertainment business. “For the short run, I believe it will be a useful addition to an artist’s tool kit. AI can help to eliminate the mediocre middle. It can also help to speed up the process for all creatives.”

Dávila concludes that the AI issue for the unions is more profound, long-term, and existential. “Generative AI relies on content. The rights to this content should belong to the originators. AI is currently crawling the universe of data unimpeded, which needs to be sorted out. It’s a case of creatives versus studios when the real issue is creatives and studios versus tech.”