Residuals, AI, and strikes… oh, my!
Famously unflappable Disney CEO Bob Iger is “disturbed” — not by the concerns of writers and actors being squeezed amid the tectonic shifts of Hollywood’s “Dream Factory,” but by their insistence that these concerns be addressed. Bob’s uncharacteristically tone-deaf comment that writers and actors are not being “realistic” incurred the wrath of The Nanny, SAG-AFTRA president Fran Drescher, who slammed Iger’s remarks as “repugnant” while likening him to a medieval land baron. Ouch.
Iger’s corporate communications blunder may be related to the increased stress he admits being under while trying to right the Mouse House after heavy C-suite attrition and a botched succession plan. His observation that Hollywood’s labor strikes come at “the worst time in the world” is amusing (as if there is ever a good time to have a strike) but disingenuous, given that Hollywood studios and streamers have taken full advantage of these disruptive times to the enrichment of themselves and the detriment of the creative community.
Writers and actors have two big things on their minds these days: the decline of wages and residuals within the streaming ecosystem, and the rise of artificial intelligence across the board. And whether or not it is “the worst time in the world,” people on both sides recognize Hollywood is at an inflection point. Whatever is agreed upon now will set a generational precedent, literally and figuratively.
The check isn’t in the mail
Residuals — payments made beyond original wages for shows in rerun and syndication — were once a reliable aspect of writers’ and actors’ livelihoods. Although streamers still pay residuals, these back-end payments pale in comparison to the amounts that casts and crews previously received from studios. Hollywood’s creative community is seeing its residual income shrink as the streamers grow.
For example, a writer on an hourlong show can earn around $25,000 for a single primetime rerun on ABC but less than $20,000 in residuals on Netflix and just $13,000 on HBO Max. Given that residuals decrease year-on-year, you can understand the alarm among writers and actors who want better pay rates from a streaming industry that now orders shorter seasons than when broadcasting dominated the medium, works the creative talent harder for less money, and cancels shows faster.
Before the WGA hit the picket lines, screenwriter Kyra Jones tweeted: “In case y’all are wondering why a WGA strike may be impending, my first residual check for the broadcast show I wrote on was $12,000. I just got my first residual check for my streaming show… $4.”
And for working-class actors — those you don’t see gracing the red carpet — residuals play a crucial role in helping folks reach the $26,470 annual income requirement for SAG-AFTRA health insurance. Meaning: Hollywood creatives can continue to insure their families during the tough times that Bob Iger cites.
In the battle for public optics, the Alliance of Motion Picture and Television Producers (AMPTP) has recently noted that the actors’ union walked away from a deal amounting to “more than $1 billion in wage increases, pension & health contributions, and residual increases.” Sounds good in the abstract until you divide by the roughly 170,000 SAG-AFTRA members and realize that you’re looking at less than $6,000 per person over the next three years.
Artificial intelligence has disrupted many industries within the past year, and Hollywood is no exception. AI technologies have ushered in an era of unprecedented transformation, enabling feats that were previously inconceivable. AI-enhanced digital makeup and de-aging technologies allow filmmakers to manipulate actors' appearances with stunning accuracy. Meanwhile, directable AI platforms such as ChatGPT are constructing solid narratives and generating natural dialogue.
As these technologies rapidly evolve, the film industry finds itself at the center of a debate on the role of AI. Many Hollywood producers and directors view AI as an asset, while writers and actors often view it as a threat. This divergence in perspectives can be traced back to the unique interests and responsibilities of each role.
Hollywood producers and directors regard AI as an asset for a few reasons:
INNOVATION: AI fosters new approaches to the craft of storytelling and filmmaking that enable creators to do more, faster, and differently than ever before. As AI lowers the barriers to entry, it is opening up new avenues of creative expression populated by fresh voices (mixed in with a lot of crap, of course, but that’s always been the case with democratizing technologies).
EFFICIENCY: AI has transformative potential to streamline production processes. From script breakdowns and scheduling to automated editing and advanced visual effects, AI boosts productivity, providing substantial cost and time savings. This is particularly beneficial to independent creators with limited resources.
ENGAGEMENT: AI's ability to predict audience preferences and forecast content performance is an imperfect science that nevertheless intrigues when fortunes are in play. By leveraging big data and machine learning, AI can potentially reduce financial risks and increase distribution successes with more personalized and effective programming and marketing strategies.
Meanwhile, many Hollywood writers and actors regard AI as a threat, citing…
AUTHENTICITY: Writers infuse stories with unique perspectives, while actors bring characters to life with human emotions. AI — for all its computational prowess — cannot truly emulate the depth and breadth of human emotions and experiences. The mechanization of these creative processes may lead to a loss of authenticity in storytelling and performances.
INDIVIDUALITY: On a related note, creatives pride themselves on their individuality. Writers craft distinct narrative voices, while actors bring unique interpretations to their roles. If AI — which relies on patterns and algorithms — starts dictating creative decisions, it could lead to a homogenization of creative output, stifling artistic individuality.
SECURITY: As AI technologies advance, fears about job displacement have surged among writers and actors. The possibility of being replaced by AI-written scripts or AI-simulated performances is a valid concern. Already, aspiring actors are being asked to sign away the rights to digital data captures of their on-set performances.
In short, the varying perspectives on AI in Hollywood stem from the different priorities associated with each role, so it’s unsurprising that the DGA settled with the studios while the WGA and SAG-AFTRA have gone on strike.
As Hollywood continues to grapple with the implications of AI, finding a balance among these perspectives is a crucial challenge for Hollywood and a key aspect of these strikes — far more thorny and impactful, I dare say, than the issue of residuals.
The future of Hollywood
We’re clearly on the cusp of a transformative new era in film, television, and content creation in general. The studios know it. The producers know it. The directors know it. The writers and actors know it. You know it. That’s why — despite Iger’s observation that this is “the worst time in the world” for a fuss over residuals and AI — it’s THE time.
With mutually-entwined stakes, one would hope that Hollywood studios and producers come to terms sooner than later with the writers and actors who bring onscreen dreams to life. But given Universal’s attempt to turn up the heat on picketers by trimming trees, I wouldn’t hold my breath.
The opinions expressed in this article are solely the author’s and do not reflect the opinions and beliefs of AWN or its affiliates.
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