Hollywood’s strikers are writing a script for other industries

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Pity the Teamsters. The US union representing 340,000 UPS employees is barely two weeks from a strike vote that could strand a quarter of the country’s parcels, but its thunder has been stolen by two unions representing professions with rather less capacity to upend the US economy. Hollywood’s actors last week joined its scriptwriters in going on strike, in Tinseltown’s first double-bill industrial action since the heyday of Ben-Hur. Picket lines have featured stars such as the Hulk actor Mark Ruffalo.

The Milken Institute estimates that the Hollywood strikes’ economic impact could be up to $4bn. But they deserve particular attention because they are among the first labour disputes to involve the impact of artificial intelligence — and how to divide the spoils in a new era of digital delivery. As intangible assets increasingly drive corporate profits, creators of intellectual property expect a bigger share. These negotiations will inform battles between capital and labour in other industries reshaped by technology.

The studios and their suppliers are at odds on many issues. The biggest, though, are how to share out streaming revenues and how AI models might replicate actors’ and writers’ work. The investments needed to launch streaming networks, just as Covid-19 and changing habits eroded cinema and cable TV revenues, have hit studios’ profits. Executives are asking, reasonably, why unions demand as many people in a writers’ room for an eight-episode season of Stranger Things as for 24 episodes of Seinfeld.

At the same time, AI models have raised the prospect of scripts, or at least their first drafts, being generated without human involvement. And stars and extras alike worry about digital versions of themselves being used without them being consulted or paid.

Hollywood’s crisis will offer short-term opportunities for international rivals, from Pinewood to Bollywood. US actors and writers may soon be as threatened by the next Call My Agent! (which came from France) or Squid Game (South Korea) as Midwestern metal bashers have been by foreign competition. But other global entertainment hubs will soon have to confront the same questions as Hollywood.

The first is over streaming income. Actors are demanding 2 per cent of the revenues generated by the likes of Netflix and Disney+, with those revenues audited by an independent body. The industry is resisting sharing data on its hits (and misses). But it will undoubtedly need to share more royalties with actors and writers, who have taken the bigger hit from the switch to streaming.

Second, actors want a guarantee that their digital likenesses be used only with compensation and consent. The principle of paying for digital doubles seems fair. How to compensate writers for AI scripts “inspired” by their earlier work will be harder to calculate — a reminder that some of these issues will require regulation to resolve.

People on both sides have been quick to point to the wealth of a few individuals at the top of the other’s industry. Actors making millions of dollars per film are not the most sympathetic representatives of struggling workers. Last week’s comment by Disney’s chief executive, Bob Iger, that actors’ demands were “not realistic” enraged strikers, meanwhile, as he had just signed a contract increasing his annual bonus target fivefold.

Barry Diller, the veteran media tycoon, has suggested one way to rebuild flagging trust would be for top actors and top executives each to take a 25 per cent pay cut. That seems an unlikely plot twist, even for Hollywood. But the industry is so high-profile and the issues so resonant that how they are finally resolved is sure to attract a big audience.