The tentative agreement negotiated earlier this week is a watershed moment for Hollywood’s film and television studios after both the WGA and SAG-AFTRA, the union that represents actors, went on strike this summer to demand more compensation and protections from artificial intelligence.
The contract, which will expire in May 2026, includes wage hikes, improved benefits, safeguards against the studios’ use of artificial intelligence, streaming compensation guarantees, longer-term employment terms, and other incentives.
Visitors pose for photos in front of the Hollywood sign, which is being repainted in anticipation of its 100th anniversary in 2023, on September 28, 2022, in Hollywood. A crew of ten painters will work for eight weeks and use around 400 gallons of paint to transform the renowned Tinsletown monument in time for its 100th anniversary in 2023.
The 148-day writers’ strike, the second longest in Writers Guild of America history, is officially over. pic.twitter.com/UZ2HMy4y4y
— Pop Crave (@PopCrave) September 27, 2023
There Are Still Some Problems Left
The WGA strike may be over, but Hollywood’s larger issues aren’t. The minimum wage for most authors will rise by 5% immediately, 4% in May 2024, and 3.5% in May 2025. Contributions to health funds will rise by half a percentage point to 12% of companies’ reportable earnings. Furthermore, writers who are working on the same script will no longer have to share pension and health contributions.
Writers were particularly concerned about the rise of streaming since they were losing out on residuals earned by traditional television shows when they were re-run. Minimum writer compensation for a plot and teleplay will climb 18% to $100,000 for large streaming films, notably feature-length productions with a budget of at least $30 million. Minimum residual pay for big-budget streaming productions will rise by more than a quarter.
Other residuals for video-on-demand services will provide writers with a 50% bonus if the shows are seen by one-fifth of domestic customers in the first three months of a project’s run. That means that for big-budget productions on the top services, writers might earn more than $9,000 for a half-hour episode and more than $16,000 for a one-hour episode.
These services, which include Netflix, Disney+, and Max, have also vowed to boost openness about how many hours specific episodes were streamed. The WGA’s summary of the accord includes AI safeguards. According to the summary, “AI cannot write or rewrite literary material.” It also stated that AI-generated items must be notified to writers.
The Data Transparency Agreement
The agreement also addressed streaming residuals and data transparency in the context of streaming. The development of Netflix and other such services has helped alter Hollywood over the years, becoming a prominent topic in the writers’ and actors’ strikes.
Although union leadership has allowed union members to return to work, their contracts with the studios have not yet been officially ratified, which means union members may still reject the terms of the agreement, potentially prolonging a historic strike that has crippled much of the US entertainment industry.
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Strike Has Been Proven Very Impactful
In a statement regarding its own negotiations, a SAG-AFTRA representative stated that the union is “reviewing the WGA’s tentative agreement and is committed to achieving a fair and just deal for our members.”
“We remain on strike in our TV/Theatrical/Streaming contract and will inform our members when there is negotiation news to share. We will not speculate regarding schedule or next steps,” the official stated.
According to the union, “Eligible voters will be able to vote from October 2nd through October 9th, and will receive ballot and ratification materials when the vote opens.”
The WGA went on strike on May 2, making it one of the longest in the union’s history. The current record was set in 1988 when the WGA went on strike for 154 days.
According to analysts, the Hollywood strikes were costly, with a national economic impact of more than $5 billion. More than just Hollywood insiders have felt the pain; restaurants and businesses that cater to the entertainment industry, such as makeup and housekeeping labor, have also suffered.
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