Hollywood writers’ strike begins, casting a shadow over upfront negotiations

For the first time in more than a decade, Hollywood writers are walking out.

Thousands of writers belonging to the Writers Guild of America went on strike this week after the union and the Alliance of Motion Picture and Television Producers (AMPTP), which represents big studios like Amazon, Apple, Disney, NBC, Netflix, and Warner Bros. Discovery, failed to reach an agreement.

The strike will almost certainly disrupt program releases. It could also have an effect on the advertising dollars that flow into streaming as the union seeks terms that it says are crucial to protecting the future of the profession.

“At stake is nothing less than the survival of film and television writing as a viable middle-class career for the majority of our membership,” Zack Stentz, a screenwriter who has written for films like Thor and TV shows like Fringe, wrote in the New York Times ahead of the strike’s commencement.

While the full impact of the strike remains to be seen, it’s already having an effect on some streamers’ annual pitches to advertisers during the NewFronts. Hundreds of writers picketed outside the entrance to Peacock’s NewFront presentation in midtown Manhattan Tuesday, holding signs demanding a fair contract.

What are the disagreements?

As is pretty typical in contract negotiations, the union is seeking higher minimum pay and contributions to health and pension plans. But it also wants changes to the terms it has with streaming services, whose growth has disrupted the way that many writers are compensated for their work.

Streaming services in particular often pay writers substantially less, especially because there tend to be fewer episodes per season and because residuals are lower on streaming than broadcast TV. Wages are low: Half of all guild TV writers are working at minimum basic pay (the minimum wage negotiated by the union), according to the WGA.

In a statement announcing the strike, the WGA described the existing terms as having created a “gig economy inside a union workforce” that it described as an “existential crisis” for writers. The statement goes on to say that studios “have closed the door on their labor force and opened the door to writing as an entirely freelance profession.”

The union is also pushing to improve working conditions for its members, limit “mini rooms” (smaller writers rooms in which there are fewer writers than usual, and writers are often paid less) and create guidelines limiting the use of AI in the profession.

The AMPTP, meanwhile, said in a statement issued just before the strike that the “primary sticking points” were the union’s proposal for mandatory staffing and employment duration periods, which the AMPTP does not seem to want to agree to. The organization said its “member companies remain united in their desire to reach a deal that is mutually beneficial to writers and the health and longevity of the industry,” adding that it was “willing to engage in discussions with the WGA in an effort to break this logjam.”

What happens now?

WGA members will not return to work until an agreement is reached. That means new scripts for TV shows and films won’t get written by guild members until further notice.

Late-night shows will see the most immediate effects since their writers’ rooms draft topical content for show hosts. The Tonight Show Starring Jimmy Fallon, Jimmy Kimmel Live!, The Late Show with Stephen Colbert, Late Night with Seth Meyers, and The Daily Show all began airing reruns this week.

“I wouldn’t have a show if it wasn’t for my writers, and I support them all the way,” Fallon said Monday night at the Met Gala.

Scripted comedies and dramas, which take longer to make, won’t be affected as immediately, as Netflix co-CEO Ted Sarandos was quick to point out to analysts in April.

“If there’s a strike—and we want to work really hard to make sure we can find a fair and equitable deal so we can avoid one—but if there is one, we have a large base of upcoming shows and films from around the world,” Sarandos said at the time. “We can probably serve our members better than most.”

In the longer term, there may be more unscripted series or international programming imports brought onto networks and streaming services. It could also have major economic effects: During the last writers’ strike that began in 2007, a reported $2.1 billion to the California economy dried up.

For advertisers, the work stoppage could mean shifting media budgets to where viewers are—whether that’s digital platforms or streamers that are flush with library content, unscripted series, or international programming. That could stand to benefit streaming services, at least for now, some analysts have predicted.

“In the near-term, there will probably be some modest incremental (if mostly unobservable) benefit to viewing of streaming services because they don’t have much live or near-live scripted programming,” financial analyst and GroupM’s former global president of business intelligence, Brian Wieser, wrote this week.

As for how it will play out in the advertising world, expect ad spend to “effectively shift to wherever there is available inventory,” Wieser added. Already, some advertisers are pulling together contingency plans, Digiday reported this week.