Hollywood Writers' Strike Comes to an End as WGA and AMPTP Finalize Labor Contract
After nearly 150 days of strike action, Hollywood writers and studios have reached a breakthrough, finalizing the language of a tentative contract that will bring an end to the labor strike. The Writers Guild of America (WGA) announced that union leaders have unanimously voted to lift the restraining order, officially ending the strike as of September 27th. Talks between the WGA and the Alliance of Motion Picture and Television Producers (AMPTP), which represents major studios like Disney, Paramount, Universal, and Warner Bros. Discovery, have been ongoing, leading to a preliminary deal.
Key Terms of the Agreement
The newly agreed contract will be in effect until May 2026 and includes several significant provisions. Writers will receive a minimum pay increase of 5% upon the ratification of the contract, with additional bumps of 4% on May 2, 2024, and 3.5% on May 5, 2025. Notably, the agreement grants writers significant protections against the use of artificial intelligence (AI), ensuring that AI cannot write or rewrite literary material and that AI-generated content will not be considered source material.
Streaming and Residuals
Regarding streaming, the guild has successfully negotiated a new residual structure based on viewership. High-budget subscription video on demand series and films that are viewed by 20% or more of the domestic subscribers within the first 90 days of release will receive a bonus equal to 50% of the fixed domestic and foreign residual. The calculation of views will be based on the hours streamed domestically divided by the runtime. This new structure will go into effect on January 1, 2024, resulting in substantial bonuses for writers, such as $9,031 for a half-hour episode, $16,415 for a one-hour episode, or $40,500 for a streaming feature with a budget exceeding $30 million.
Improved Benefits and Compensation
The agreement also includes increased contributions to health and pension plans for writers, as well as improved compensation for screenwriters, minimums for writers' rooms, and the renewal of a $250,000 showrunner training program. These enhancements aim to address the concerns of writers and provide them with better working conditions and financial security.
The negotiating committee has recommended the agreement, and it has been sent to the Writers Guild of America West Board and the Writers Guild of America East Council for approval. Both the board and council have voted to authorize a contract ratification vote by the membership. WGA members will have until October 9th to cast their votes on the contract.
Once negotiations with writers are concluded, the AMPTP will shift its focus to negotiations with the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA). The acting guild's members have been on strike since mid-July, seeking similar contract updates to those requested by the writers. The WGA contract could serve as a template for SAG-AFTRA to draft its own deal with Hollywood studios.
Similarly to writers, actors are aiming to improve wages, working conditions, and health and pension benefits, while also establishing guidelines for the use of AI in future productions. Additionally, the union is advocating for increased transparency from streaming services regarding viewership data to ensure equitable residual payments compared to linear TV.
SAG-AFTRA has also been working towards standardizing the self-tape process, which gained popularity during the pandemic. The union aims to address the inequality in auditioning caused by disparities in access to quality camera and lighting equipment among actors.
Disclosure: Comcast, the parent company of NBCUniversal and CNBC, is mentioned in this article. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers.
Implications of the Hollywood Writers' Strike Resolution for New Businesses
The recent resolution of the Hollywood writers' strike, marked by the finalization of a contract between the Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP), could have far-reaching implications for new businesses in the entertainment industry.
Impact on AI and Content Creation
One significant aspect of the agreement is the protection granted to writers against the use of artificial intelligence (AI) in content creation. This could potentially impact new businesses that rely on AI for generating or rewriting literary material. Such businesses may need to rethink their strategies and explore new avenues for utilizing AI in a manner that respects the rights of writers.
Streaming and Residuals: A New Paradigm
The new residual structure based on viewership, particularly for high-budget subscription video on demand series and films, could alter the dynamics of the streaming industry. New businesses in this space might need to consider this structure when planning their content strategy and budgeting. It could also influence the way they negotiate contracts with writers and other creative professionals.
Enhanced Benefits and Compensation
The improved benefits and compensation for writers, including increased contributions to health and pension plans, could set a new standard in the industry. New businesses will need to factor in these enhanced benefits when planning their human resources policies and budgets.
As the AMPTP shifts its focus to negotiations with the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), similar changes could be on the horizon for actors as well. New businesses in the entertainment industry will need to stay abreast of these developments and adapt their strategies accordingly.
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