The Real Reason Hollywood is on Strike | Variety Explains - video Dailymotion

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The Real Reason Hollywood is on Strike | Variety Explains

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00:00 No film premieres, no festivals, no award shows.

00:03 SAG-AFTRA went on strike July 13th, just six weeks after the WGA began its work stoppage.

00:10 These two guilds haven't been on strike at the same time in more than 60 years.

00:15 "If I were that company, I would lock them behind doors."

00:18 But what led to this monumental moment? And what does it mean for the future of Hollywood?

00:22 Let's go back to 1960.

00:28 The previous time of a dual strike can tell us a bit about how to view the current one.

00:32 TV was just coming into its own as a medium, and as a big source of employment for Hollywood creatives.

00:38 As the television world expanded, both SAG and WGA members sought higher fees,

00:45 also called residuals, for when older movies were sold to TV and when TV shows went into reruns.

00:51 Actors and writers stress the importance of residuals because, otherwise,

00:56 their only income was from the initial compensation they were paid per project.

01:01 Residual fees for rebroadcast movies and TV shows help actors,

01:06 writers, and producers survive between those projects.

01:09 The dual strike materialized early in the year with the WGA going on strike first

01:15 and SAG joining them not long after.

01:17 SAG ended their strike first when Hollywood's major studios agreed to pay actors residuals

01:23 for TV sales on films made after 1960.

01:27 In turn, actors gave up residuals on films made between 1948 and 1959.

01:33 The producers also shelled out more than $7 million to establish a health and pension plan for SAG.

01:39 U.S. President Ronald Reagan, who began his career as a Hollywood actor,

01:44 was president of SAG for the third time, and he led the guild through tough negotiations.

01:49 The WGA continued to strike for another two months until they negotiated a film-to-TV residuals deal,

01:56 as well as a 4% residual for TV reruns.

01:59 Now, let's jump a little closer to modern day.

02:03 The year is 2007, and we are in the midst of the second golden age of television.

02:10 After 10 years of mailing DVDs, Netflix launches a streaming platform that allows you to watch

02:16 movies and shows through your web browser.

02:19 In 2012, Netflix has the novel idea of releasing original programming strictly for their streaming

02:25 platform.

02:26 As streaming exploded, each studio wanted to copy the Netflix model of running their

02:32 own platform and creating their own content.

02:34 And many of these shows never once get broadcast on a TV set by traditional means.

02:39 This is where the WGA and SAG-AFTRA come back into the picture.

02:45 The compensation and residual plans that were long established for guilds,

02:49 were built for broadcast television.

02:52 They didn't encompass the new world of on-demand streaming,

02:55 where anyone can re-watch the entirety of Grey's Anatomy on Netflix for the thousandth time.

03:00 "So pick me.

03:01 Choose me."

03:03 The guilds brought these concerns into the negotiations with the Alliance of Motion Picture

03:08 and Television Producers, before their respective contracts were about to expire,

03:12 without success.

03:13 WGA went pencils down on May 2nd.

03:16 SAG-AFTRA walked out on July 14th.

03:19 Why didn't the studios just pay writers and actors more money through residuals?

03:23 Well, it's not as simple as the AMPTP coming up with a logical percentage to solve the

03:29 problem.

03:29 Back when all the studios were looking to copy Netflix's business model,

03:34 they did a bunch of math based on the production as it was, without residuals in the mix.

03:39 Then they borrowed a lot of money based off that number.

03:42 They put that money towards developing streaming platforms and financing

03:46 lots of original programming, with the short-term view of subscriber growth

03:50 and the long-term view of being quite profitable.

03:52 One day.

03:54 So outside of Netflix and Hulu, at the time of the most recent contract negotiations,

04:00 none of the streaming businesses were profitable.

04:02 Based on the calculations the studios made, now adding higher residuals into the mix,

04:08 it would take them a lot longer to make a profit.

04:11 Which isn't good at a time of high inflation that led into the Fed raising interest rates.

04:17 Bottom line, it's bad timing.

04:19 So how will it work out?

04:22 Eventually, all parties will come to some form of compromise around residuals.

04:27 Making shows and movies for streaming is about to be more expensive.

04:30 Studios will cut costs likely by making fewer scripted shows

04:35 for their pricey streaming platforms going forward.

04:38 Peak TV, the second golden age of television,

04:41 is officially dead after a very memorable 23-year run.

04:46 "You ever feel like nothing good was ever gonna happen to you?"

04:48 "Yeah, and nothing did. So what?"

04:51 Rest in peace, champ.

04:53 you

04:54 you

04:55 you

04:56 you

04:57 you

04:58 you

04:59 you

05:00 you

05:01 you

05:02 [BLANK_AUDIO]

The Real Reason Hollywood is on Strike | Variety Explains

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