OPINION:
Hollywood actors and writers are striking an industry in crisis. The dilemmas all face are a dress rehearsal for how Americans will cope with the growing gig economy and artificial intelligence.
COVID-19 disrupted industries in similar ways as wars and financial crises by accelerating adjustments to new technologies and consumer preferences. Consider the development processes for rDNA vaccines.
Before cable, big-screen TVs and the internet, just about everyone was limited to what their local theaters and the three major networks offered.
Larger cities had one or few independent stations — New York had three and Washington one — but their prime-time fare was mostly reruns of popular network shows.
In this environment, the residual system thrived. Actors and writers were paid for the work on the original print of a movie or TV show and again for reruns on affiliate and independent stations.
While movie studios and networks hardly had monopolies, the limited choices made for growing revenue that studios and networks could reasonably share with creative talent. Working-class actors and writers — talent that are not big stars or show creators — generally worked steadier, earned more and enjoyed a better employment environment.
More writers were present on set during filming, and participated in discussions about set dressing, costumes, scene direction and so forth. This permitted junior writers to learn the business and develop skills to become showrunners and primary creators of movies and TV series.
The proliferation of channels on cable created wider employment opportunities, but the real boom came with streaming and its fusion with inexpensive big-screen TVs about a decade ago.
That undermined the market for theaters. Releases with mega stars, high action and a lot of noise — franchises like Indiana Jones and superheroes — still have great big-screen appeal. But for ordinary drama and comedy, it takes a pretty compelling story to get Americans away from their couches, wine and cheese into the theaters with greasy popcorn.
COVID-19 shut theaters for a time, accelerating this dynamic, but it did not create it.
There’s still a lot of revenue, but now Americans have more choices — both the number of outlets for new movies and TV shows and a catalog of viewing experiences going back to the advent of talking motion pictures.
The market is fragmented. Residuals are smaller. Working-class actors and writers have a tougher time earning a living.
Writers’ rooms are smaller, fewer work on set, and streaming series have perhaps 10 episodes per season. compared with 22 for linear TV.
Actors and writers do a lot more scrambling to piece together enough employment to pay the rent.
The residuals — an important part of actors’ and writers’ long-term income — are simply a lot smaller than in the days when theaters and linear TV dominated.
With more Americans cutting the cord — opting out of cable and relying on streaming — the problems of the industry have worsened.
The big studios and other entrepreneurs have rushed into streaming, and the lake is overfished. Netflix, owing to its first mover advantage, earns a profit, but Disney, Comcast and Paramount had a combined loss of $8.4 billion in 2022.
Subscription fees are rising, but the number of movies and shows produced must get smaller.
Ultimately, the actors’ and writers’ strike pits working-class talent against the well-paid star actors and creators/writers. Recent job actions merely put producers in the tough position of dividing the loss.
Unless, of course, some innovation comes along that dramatically raises productivity — enter stage right, artificial intelligence.
Much of what writers do is highly formulaic — consider cop shows and the typical Hallmark fare — and a good deal of that will soon be doable in first draft by Chat-GPT. Where four or eight writers worked on a movie or show, perhaps one or two will suffice.
Like actors worried their identities will be appropriated by computer recreations, writers need limits on the use of characters and the fictional communities they create.
Going beyond that, if the Screen Actors Guild and Writers Guild of America negotiate overly strict limits on the use of AI by major studios and incumbent streaming services, new services will emerge that employ actors and nonunion contractors offering more flexibility.
As Netflix and Amazon demonstrated by becoming producers of original content, the industry does not have high entry barriers.
The creative talent working on one of the many clones of “Law and Order” and similar franchises can impose more effective limits on the use of computer simulations, but all franchises eventually end.
What emerges to capture eyeballs would be produced by new streaming services unbound by rigid limits on AI.
New actors and writers willing to permit more liberal use of their likenesses and creative work will thrive much as workers at Tesla are taking market share from the United Auto Workers at General Motors and Ford.
• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.
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