The board of the Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) ordered the strike Thursday, demanding a new contract that takes into account the new technologies — particularly video streaming and artificial intelligence — that have already transformed the industry and appear likely to drive even more change in the future. Previously, 98% of the union's members had voted in favor of authorizing the strike if negotiators could not reach a deal.

The members of SAG-AFTRA join the members of the Writers Guild of America (WGA), who have been on strike since May, with similar demands for an updated contract. The last time writers and actors went on strike at the same time was in 1960, when actor and future U.S. President Ronald Reagan was president of the Screen Actors Guild.

On the other side of the dispute is the Alliance of Motion Picture and Television Producers (AMPTP), representing major film studios, streaming services, and other outlets, including Amazon, Apple, Disney, NBCUniversal, Netflix, Paramount, Sony and Warner Bros Discovery. Negotiations between the alliance and SAG-AFTRA broke down this week.

Battle lines drawn

While there are a number of issues the two sides need to resolve, two of the largest are residual payments and the use of generative artificial intelligence.

The term “residuals” refers to payments that actors receive when a production they took part in is broadcast again. The current system does not account well for the phenomenon of on-demand streaming of films and television shows, and does not include enhancements for movies and shows that become very popular. Actors want a “success metric” that raises the payout for popular content.

Additionally, actors want compensation and protections surrounding the use of generative artificial intelligence. For example, if footage of their performances is used to train AI systems, which can then artificially produce new content using an actor’s image and voice, they want to be paid for that content.

Structural problems

James McMahon, a professor at the University of Toronto and the author of The Political Economy of Hollywood: Capitalist Power and Cultural Production, told VOA in an email exchange that the sticking points between actors and the studios are structural and will be difficult to overcome.

“The decline of box-office receipts and the rise of video streaming are, I believe, two sides of the same problem,” he wrote. “The major studios have (a) struggled to get more people to watch more movies, especially in theaters; and (b) have struggled to produce filmed entertainment profits that are competitive to the profits of other large multinational firms. Video streaming seemingly comes to the rescue of declining box-office receipts. However, user growth in streaming is not infinite, and when growth slows, firms will find additional profit from streaming by raising prices and cutting costs.”

He said that studios have been able to extract more revenue by raising the price of streaming services, keeping residuals low, and hiring fewer writers.

“[T]hese are the ways, up until these strikes, the major studios have found additional opportunities to cut costs. These strikes feel ‘existential’ because the WGA and SAG-AFTRA are saying that these cost-cutting benefits have not been sufficiently negotiated, particularly for the welfare of the average actor or writer.”

Claims of greed

Fran Drescher, best known as the star of the 1990s television show "The Nanny," delivered a fiery speech Thursday in her capacity as current president of SAG-AFTRA, slamming the studios as greedy and selfish. She criticized the studios for resisting calls to raise actors’ pay at the same time that studio executives, like Disney CEO Bob Iger, are paid tens of millions of dollars per year.

“We are the victims here. We are being victimized by a very greedy entity. I am shocked by the way the people that we have been in business with are treating us,” she said.

“I cannot believe it, quite frankly, how far apart we are on so many things,” Drescher added. “How they plead poverty, that they’re losing money left and right when giving hundreds of millions of dollars to their CEOs. It is disgusting. Shame on them. They stand on the wrong side of history.”

In a press release responding to the strike, the AMPTP said, "A strike is certainly not the outcome we hoped for as studios cannot operate without the performers that bring our TV shows and films to life. The Union has regrettably chosen a path that will lead to financial hardship for countless thousands of people who depend on the industry."

Huge impact

The combined effect of the two strikes will be to stop production of most feature films and scripted television programs. The writers’ strike had already forced many productions to close down, but now even films and shows with completed scripts will be affected.

However, the strike’s impact will go deeper than halting production. The members of SAG-AFTRA will be barred from promoting any films in which they appear, including campaigning for honors such as the Academy Awards for films and the Emmy Awards for television programs.

On Thursday, the stars of "Oppenheimer" and "Barbie," two summer blockbusters scheduled for release this month, stopped participating in promotional events hyping the films. In the case of "Oppenheimer," the lead actors, including Cillian Murphy, Emily Blunt, Matt Damon and Florence Pugh, walked out in the middle of the film’s London premiere after the strike was announced.

‘Middle class’ actors

While Hollywood’s megastars may receive most of the media coverage, the vast majority of the roughly 160,000 SAG-AFTRA members are not household names, but people trying to earn a living in an industry that has changed significantly in recent years.

“This isn’t about the big stars — they have their own agents who negotiate contracts above and beyond the SAG contract and earn hundreds of thousands, millions, or even tens of millions of dollars,” Jonathan Handel, a media attorney and journalist, told VOA. “This is about middle-class actors struggling to keep a roof over their heads and food on the table in high-cost cities like Los Angeles and New York.”

Handel, whose book, Hollywood on Strike!: An Industry at War in the Internet Age, chronicled the last strike by actors in 2007, said that the parties could be facing a long road toward any permanent resolution.

“Right now, there is a lot of bitterness in the room,” he said. “A lot of things were said, and there's no real appetite for anything but striking. Labor is very upset and very unhappy with the way the companies are running things. The companies, for their part, view this as existential also, because filmed entertainment has not seen more rapid, disruptive change in such a short period of time since the period after World War II.” (VOA/NJ)