The Hollywood Double Strike Effect
The ongoing double strike in Hollywood poses significant challenges for professionals working behind the scenes, leading to layoffs, financial uncertainties, and a desire for sustainable careers. As the entertainment industry grapples with the impact of the strikes and Covid pandemic, brand partnerships, especially product placement, emerge as valuable opportunities to support content creation and offset rising costs.
This Saturday I had the honor of being interviewed on The Debrief on Scripps News regarding the current strikes in Hollywood. You're likely seeing similar interviews and conversations on the news as Hollywood has now been thrust into a double strike by both the writer's and the actor's unions. In this blog, Hollywood Branded shares the impact of ongoing Hollywood's double strike and how to navigate through this hard time.
Who Is Impacted?
The Hollywood shutdown impacts every type of business that revolves around Hollywood and has global ramifications. Beyond Hollywood's studio, network, production company, and talent agency core businesses, there are millions of business owners, employees and independent contractors who are being extremely negatively financially impacted by these two strikes.
Well beyond actors and writers, those that power the content and how it is made are drastically impacted. That includes post-production teams (editors, visual effects artists, sound designers), studio and talent agency staff, PR and marketing agencies like mine, industry lawyers, catering companies and restaurants, uber/limo drivers, hotels, and even janitorial staffing who work on sets and production offices. Millions of people will suffer. Beyond unemployment, and unlike with Covid, there will be no government support or easy solutions to offset business losses.
After having survived Covid, it’s tough for so many to be thrust into a landscape of work stoppage due to the lack of unions and studios working on compromises. There are unrealistic expectations on both sides, as the unions do not seem to understand the true costs of business, and the studio and network system appear to be turning to hardball tactics of deprivation and fear of financial failure and home loss.
There is no mutually beneficial partnership in place or currently being sought.
Photo Credit: Anandolu Agency Via Getty Images
Negotiating By Non-Action
The reality is - that there is absolutely no reason for this to happen other than to gain negotiation power. This will be settled sometime in the nearish future. It could be next week or the end of the year. But regardless - Hollywood will continue on. Content will be made and new acting talent discovered. The machine goes on.
The studio and network system has more money than the union members, and that's the way they will approach negotiating - by trying to wait them out until homes are foreclosed upon. They have other union negotiations that will be impacted, and there is the real issue that audiences are fragmenting, and the theatrical box office is no longer operating as the profitable bank it once was. Advertisers have their limits on what they will pay to reach smaller and smaller audiences through linear platforms - and there has to be profit in order to pay for all the things being requested by the union. There are cold hard dollar facts. It's business, and it is brutal. Make no mistake - Hollywood exists to be a profitable machine, and those that power it do not want to dip into the red on a balance sheet.
The box office is down by 25% from pre-pandemic. And it's not recovering. That's not to say that tens of millions of people are not seeing that content - they are. It's just on streaming platforms instead of in theaters. Which means much lower profits to be generated. And less net income to pay for all those things actors and writers are asking for.
Both sides need to step up and find solutions instead of choosing to burn Hollywood down. This is unfair to those impacted outside the unions and guilds. Here's some of what I discussed and a deeper dive into what is happening.
What is the WGA?
The Writers Guild of America (WGA) is a labor union representing the interests of professional film, television, and radio writers working in the United States. It is divided into two separate entities: the Writers Guild of America, East (WGAE), based in New York City, and the Writers Guild of America, West (WGAW), in Los Angeles.
Striking writers outside the Netflix Offices and Sunset Bronston Studio.
Photo Credit: REUTERS
The 100 Day WGA Strike
The WGA generally goes on strike to advocate for better compensation, benefits, and working conditions for its members. There have been several notable WGA strikes in the past, with the most recent major one occurring in 2007-2008. This strike primarily revolved around disputes over compensation for digital media distribution (such as streaming services), and it had significant effects on the film and television industries. It was a rough strike, it lasted 100 days, and it hurt Hollywood tremendously. In fact, it cost Hollywood over $2 billion in lost revenue. That's $200 million a day back in 2007 - and closer to $285 million now.
Photo Credit: Everett / Getty
Life For Stacy and HB In 2007
I personally rode that bumpy ride of the rollercoaster as I had JUST ventured out on my own in August 2007 and launched Hollywood Branded. In those months leading up to the strike and into it, I was sued by the owners of my prior company for starting a competitor agency. While I won, and they went away, it was only after months of massive legal bills had been paid which cost me the entire downpayment I had been saving to buy a house - and all of my savings to take the jump into business entrepreneurship. I was a bit bitter, to say the least, and my mental health wasn't in the best of shape as that was a really crappy thing to have gone through. But that experience, like that first WGA strike, ultimately made me stronger to weather hurricanes and typhoons still waiting in the years ahead as an agency owner. Not that I was ever hoping to have to go through another strike again. Now we have not just one - but two.
When the WGA announced they were stopping negotiations in 2007, I had two employees and an intern I was financially responsible for a documentary in production for Freightliner, and BlackBerry recently signed on as a client for product placement. We were working out of my tiny two-bedroom house in Hermosa Beach, and somehow we managed to weather the storm of that shutdown despite being a newly launched business with no investors or savings. The landscape of television was forever altered, as it resulted in the massive content explosion of reality television.
In those months of the strike, we turned to reality shows to showcase clients' products with series including the newly launched Keeping Up With The Kardashians, The Amazing Race, Big Brother, Kitchen Nightmares, Say Yes To The Dress, and Paris Hilton's My New BFF. Drew Carey launched his The Price Is Right primetime specials, and daytime and late-night talk shows paused for a bit and then continued without scripts. Late-night hosts did what they do best - they hosted and used their comedy chops to produce successful shows. Movies and television series that had scripts completed kept on filming uninterrupted, with the exception of being unable to change lines if the flow wasn't right. Soap operas had scripts available to shoot through early January or February or hired non-union writers. Canadian series also became popular in the US, as writers there were not under the WGA contract.
Like with most things that are horribly negative, there were some positives for our agency that also resulted. Not only did we learn to become very nimble to satisfy client obligations, but with that strike, massive opportunities for brand partnerships emerged, with more scripted verbal mentions and messaging being able to be incorporated into content that was less creatively of concern by directors and the talent appearing within. Product Placement was embraced to a higher degree to help offset the costs of all the reality television appearing on screen.
Read on to learn what's going on now, and what's to come...
Why The Writer's Strike
For the WGA strike, some of the same issues then are at play this go around.
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Compensation: Disputes over residuals (ongoing payments for reruns, syndication, home video sales, streaming, etc.), as well as baseline pay rates. Residuals are a major issue for this current strike, specifically those on Streamers - as content that is a mega hit doesn't reward the writers any more than content that is a total flop. This year, the writers aren't asking for higher baseline pay rates, as they already received a 6% increase.
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Working Conditions: The WGA strikes to secure better conditions for writers, such as in 2007 limiting excessively long work hours or ensuring adequate breaks. Now it's a bit of the inverse - not enough hours are being allotted for writers on set, and mini writer-rooms are being used to have content quickly written. Writers are sharing that the limits of being on set will negatively impact the future of writing and showrunners - as there are less opportunities to be on set to hear and learn and actively see the changes that happen during the shoot. That's similar to messaging owners and leaders at corporations everywhere are saying regarding that remote work negatively impacts growth and learning opportunities for younger team members. It's just true. I see it at my own agency. On the inverse, the production companies and distributors are saying they don't want to have bloated writing staffs due to budget limitations and lack of need and that they should not be forced to hire x number of writers just because the union says to - even if the script does not have the need.
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Creative rights: This year it's all about A.I. and how it will impact writer's futures. There is absolute terror amongst union members about the future of not having a job - if A.I. takes over. Now, the reality here is that the WGA renegotiates its contract every 3 years. And we all know that A.I. is NOT going to wipe out all jobs that quickly. But there is fear that if an inch is given, those black and white words on the union contract will be seen as safeguarded and writers will not be able to negotiate protections at later dates as strongly.
WGA and SAG-AFTRA picketers outside Netflix Offices in L.A. on July 14, 2023.
Photo Credit: Tiffany Taylor / THR Staff
What Happens Next
I don't have a crystal ball that tells the date of both strikes resolving. It won't be within weeks, and we will be lucky if it is within months. Regardless, if the actors have a fast solution, with the writers still having to hang tight to start negotiating again, scripted content will continue to be impacted.
The studios have no need to rush to solve the writer's strike as without actors, there is no content to shoot. However, both unions are supporting each other to levels never seen before. And other unions, including the Teamsters, have been leaning in to offer the flex of their brute strength. Hollywood's power players have never been in this situation before.
What will happen in the meantime is that more content will be brought in from overseas. Netflix already popularized America with series like Squid Game, and shows including Elite and Money Heist. The need to have subtitles displayed is no longer something viewers shy away from, and even in my household we keep closed captioning on all the time because it just helps - especially with thick accents.
Even more reality programming will be slated to be shot to ensure advertisers have content to advertise around. Netflix and Amazon will be the least impacted, as they have content produced far out in advance, currently in editing bays.
It's A Hard Time For Many
The bottom line is that I support the various guilds and unions and all the great work they do in Hollywood. But I am deeply concerned about those whom we work with on a daily basis being able to survive this double strike, including the prop masters, set decorators, production personnel, and studio/network teams who are facing a lack of work and layoffs and not being able to pay their mortgages and put food on the table for their families. Covid isn't that far behind us - and so many people are still repaying second mortgages taken out then and lacking any type of savings to rely upon now. For these people behind the scenes on the sets of Hollywood, the reality is that everyone just wants sustainable careers and to make enough money to be able to live in the cities they work.
While we are fortunate in that Hollywood Branded is diversified and we do a tremendous amount of work across pop culture including celebrity endorsements, influencer marketing, PR, and event activations – our core business is and always has been product placement in television and film productions. So this hurts, and we will feel it. While we focus our concentration on the content that will still be shooting, there is an upside. We're also preparing for the massive glut of content that will be green-lit within days of both strike resolutions and producers eager to offset costs through brands.
Photo Credit: Lev Radin/VIEWpress via Getty Images
The Benefit For Brands
Covid changed fee integrations in Hollywood and the level of brand partnerships possible within content. Productions and distributors who were formerly more resistant to brand partnerships have realized that product placement is a great way for productions to be able to offset or make extra money to pay for higher costs.
I expect the same result will come from this pause in content creation - more opportunities will be created for brands to participate in as even more producers seek to find new ways to pay for the residuals and benefits being sought.
Photo Credit: Yana Paskova for The Washington Post
The Benefit For Studios - And Wall Street
At the end of the day, despite the economic losses and lives dealt psychological and financial blows, Hollywood will continue. In the near term, prior deals that were canceled due to the strike with writers will be negotiated to lower terms and result in less budget sitting on the studio's books. There will be fewer productions shooting in 2023 as scripted content and talk shows continue to be on hiatus, although more productions will be green-lit in 2024 than ever before as production companies race to catch up.
But for 2023 - there will be less money spent. The only winners of this double strike? Wall Street - who will be happier and its stockholders wealthier?
Photo Credit: Tagger Yancey
Eager To Learn More?
Currently, in Hollywood, times are tough; however, in the world of marketing, there are always ways to campaign and brand a company or client. If you are interested in learning more ways to have your brand shine, read these 6 blogs below.
- Depop Redefines Social Media Marketing
- 3 Content Marketing Tools You Should Be Using Right Now
- 2019's Best Marketing Analytics Tools Marketer Should Use
- HB Round-Up: Content Marketing 101
- Targeted Advertising Techniques And Why They Are Effective
- How To #8: Easy And Affordable Consumer Engagement Tactics [Infographic]
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