Published on November 17, 2023, 12:15 am

“The Aftermath Of The Hollywood Strikes: Economic And Industry Impact”

While the strike by writers and actors in Hollywood has finally come to an end, the repercussions of the months-long ordeal are far from over. The economic toll caused by the strike is estimated to be more than $6 billion in lost wages and business impacts across California and other production-heavy states like Georgia and New Mexico.

The strike had a significant impact on various industries, as striking writers and actors battled through financial hardships, depleting their savings and accumulating debt just to make ends meet. Service industries such as dry cleaners had to lay off staff, while prop houses were forced to sell their inventory or shut down entirely.

Although studios are rushing to resume filming and sets for movies and TV shows are lighting up once again, Hollywood is not expected to return to its previous frenzied production pace. Higher labor costs, falling television ad revenue, and pressure from Wall Street have led studios to reduce the number of TV shows, cut jobs, and even move some production overseas where costs are cheaper.

Furthermore, it will take time for experts to tabulate the total economic damage caused by the strike, including business failures. However, one thing is clear: the human toll of this ordeal cannot be measured solely in monetary terms. Many individuals like Celia Finkelstein, an actress and member of the Writers Guild of America (WGA), suffered greatly during this period. With no income coming into their household for six months, Finkelstein and her production-coordinator husband relied on WGA loans and savings but still endured a very tough summer.

The strike began in May when WGA members went on strike, followed by SAG-AFTRA performers’ union members joining them in July. Screenwriters returned to work in September after securing pay increases along with curbs on artificial intelligence use and benefits such as residuals for popular streaming shows. Similarly, Hollywood actors won similar gains with a tentative agreement reached with studios on November 8th.

Sadly, for some, the strike marked the end of their careers. After more than a decade in Hollywood, aspiring actress Serena Kashmir decided to quit the business. Despite having a decent resume, footage, connections, and a degree in acting, Kashmir found it impossible to make ends meet even while working multiple “survival jobs.” She ultimately concluded that pursuing full-time acting was not a feasible reality for her and moved away to make a living in another field.

The new labor agreements have been hailed as historic by SAG-AFTRA President Fran Drescher, who believes they will help preserve acting as a profession. However, if talent flight continues, it could have long-term implications for Hollywood. The industry has always relied on attracting an influx of workers drawn to its glamorous appeal. If people cannot afford to stay in Hollywood due to financial challenges, the pool of individuals seeking opportunities within the industry will diminish significantly.

Additionally, long-established businesses like Faux Library Studio Props have barely managed to survive this tumultuous period. Owner Marc Meyer Jr., had to lay off almost all of his employees and rely on generous support from his landlord and a GoFundMe campaign just to keep the business afloat. Unfortunately, other prop warehouses like Sony Pictures Entertainment’s were forced to close down and auction off their assets.

Even before the strikes began, production in Hollywood had already started declining due to factors such as declining television advertising revenue and pressure from investors to turn streaming businesses profitable. Consequently, companies have been forced to lay off thousands of workers and reduce content spending by billions of dollars. This downward trend has resulted in global spending on programming stagnating since 2023 after experiencing consistent growth over the previous decade.

Accordingly, Moody’s Investors Service predicts that the new labor agreements will cost studios an additional $450 million to $600 million annually. To offset these costs, companies may resort to hiring fewer A-list actors or reducing spending on special effects and post-production. They may also seek out more tax breaks and financing subsidies while considering filming in locations with lower production costs outside the United States. Following the Netflix model, studios might greenlight stories with global appeal to cater to international audiences.

In line with this strategic shift, 69% of Netflix’s upcoming original shows are being produced outside the US, as the company continues to fuel its platform’s global growth through localized content.

As a result of these changes, there is likely to be a significant decline in the number of scripted series produced. One talent agent predicts that from the peak of 599 series in 2022, this number could drop to 350 or even fewer next year, affecting cast and crew alike.

In conclusion, while Hollywood celebrates the end of strikes by writers and actors, it will take months to fully grasp the economic toll inflicted on various industries due to lost wages and business impacts. Despite resuming filming activities, Hollywood is not expected to return immediately to its previous production pace. Higher labor costs, falling television ad revenue, and financial pressures have led studios to reduce the number of TV shows and consider alternative locations for production

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