Hollywood plunges into all-out war during the streaming revolution

To get a sense of how much animosity is flying through Hollywood these days, check out how Ron Perlman reacted to a report that the studios wanted to extend a strike long enough for writers to lose their homes.

Perlman, the hulking hoarse-voiced actor of “Hellboy,” leaned into the camera in a since-deleted Instagram live video to vent his anger. “Listen to me, Mother-(expletive),” Perlman said. “There are many ways to lose your home.”

Three years after the pandemic brought Hollywood to a standstill, the film and TV industry is once again at a standstill. This time around, however, the industry is embroiled in a bitter battle over how streaming — following a meteoric rise during the pandemic — has turned entertainment’s economics upside down.

Having weathered the plague, Hollywood is now at full war in its own “Apocalypse Now” double movie. As tens of thousands of Screen Actors Guild-American Federation of Television and Radio Artist reached the picket lines last week, joining 11,000 WGA screenwriters on strike since May, a smaller clash devolved into a nuclear clash just in time for the release of “Oppenheimer” . As notable actors and writers mobilized to storm studio lots and streamer headquarters, Puck’s Matthew Belloni wrote, “The city is burning to the ground.”

“You can’t change the business model as much as it has changed and expect the contract to change as well,” Fran Drescher, president of SAG-AFTRA, said at a fiery press conference announcing the strike. “We will not continue to make incremental changes to a contract that no longer complies with what is now happening with this business model that has been forced upon us.

“What are we doing?” she added. “Moving furniture on the Titanic?”

Disaster also loomed in Hollywood as COVID-19 closed movie theaters, emptied TV studios and halted all production in March 2020. The recovery is still underway. Over the weekend, one of the first major movie productions shut down by the pandemic – “Mission: Impossible — Dead Reckoning Part One” – barely hit theaters. And as the grand but non-blockbuster opening showed, some of pre-pandemic Hollywood still hasn’t returned. Box office remains about 20-25% lower than pre-pandemic pace.

“We’ve talked about disruptive forces in this business and all the challenges we’re facing, the recovery from COVID that’s underway. It’s not quite back,” Disney CEO Bob Iger said Thursday. “This is the worst time in the world to add to that disruption.”

While many of the demands of SAG-AFTRA and the Writers Guild of America are longstanding, much of the current dispute gained momentum in the frenetic days of the pandemic. A digital rush to streaming ensued, as studios in many cases scrambled to make their Netflix competitors. Subscriber growth became the top priority.

Rahul Telang, a professor at Carnegie Mellon University and co-author of the book “Streaming, Sharing, Stealing: Big Data and the Future of Entertainment,” says an entire era of change has been condensed into two years.

“What’s happening now had to happen. Streaming disrupted the entire business,” says Telang. “So of course they complain, ‘We need our share.’ But how do you determine what is a fair share? There has to be transparency about where the money comes from and where it goes. Until this is resolved, this problem will continue.”

The last time movie actors and writers struck simultaneously, in 1960, the guilds established royalty payments (later residual payments) for movie and TV reruns, among other historical protections. If that strike accounted for the dawn of television, it does much the same for the streaming era.

But streaming, especially when companies carefully monitor viewership, doesn’t provide an easy metric like box office or TV ratings to determine residuals — long a fundamental part of how writers and actors make a living. SAG-AFTRA aims for a small percentage of subscriber revenue, with data measured by a third party, Parrot Analytics.

The AMPTP, which negotiates on behalf of the studios, has not agreed, but says the studios have offered actors “historic wages and residual raises” along with pension contributions and other protections.

Meanwhile, actors share images of their meager residual payments for streaming hits. Kimiko Glenn of Netflix’s “Orange Is the New Black” posted a clip of residual payments totaling $27.30.

“You used to be able to work on a broadcast show, one show and you’re good for the year because of the leftovers,” actor Nachayka Vanterpool said on the picket lines. “And then streaming comes along and you have 20 cents remaining checks. That affects you.”

It increasingly seems that everyone has been lost in the so-called streaming wars that have gone into hyperdrive under COVID-19. Since Wall Street started to sour last year as subscriptions became the number one issue, most media companies have experienced stock declines. Wall Street’s message changed to: Show us the profit.

At the same time, the push for streaming has accelerated the decline of traditional television and its ad-based revenue. That led analysts like MoffettNathanson’s Michael Nathanson to examine a fragmented entertainment business and predict a “scary” second half of the year for media companies.

With traditional TV increasingly being eroded by streaming, many studios have slashed costs. Disney, Warner Bros. Discovery and Netflix have all cut jobs in the past year and a half. Streaming profitability has remained elusive. The Walt Disney Co. says Disney+ will be here fall 2024. Warner Bros. Discovery, which has taken the extreme step of freezing completed productions to reshape its streaming strategy, says Max will be marking money this year.

Many are now gearing up for an extended hiatus which, if extended into September, would have major implications for the fall TV schedule and the film festivals (Venice, Telluride, Toronto) that launch the season’s award contenders. Drescher said she “couldn’t believe” how far apart her union and AMPTP are.

Ronny Regev, who wrote the book “Working in Hollywood: How the Studio System Turned Creativity into Labor,” thinks this strike could play out similarly to the strike in 1960, when the actors went on strike for about a month, but the strike of the writers continued.

“I hate to bring up the cliché, but history repeats itself,” says Regev. “Just like in 1960, the actors are more likely to make a deal than the writers. Now we’re dealing with very different companies. These are conglomerates that other companies have. I’m not sure if (Amazon chairman Jeff) Bezos does it really matter.”

There are also differences that favor the writers. In 1960, the strike of SAG (whose president was a then-Democrat Ronald Reagan) was hotly contested by some other guilds, including the International Alliance of Theatrical Stage Employees (IATSE), which represents below-the-line crew members. This time the actors and writers have almost universal support in all guilds. Notably, IATSE will negotiate its own new contract next year.

“The urgency of this moment cannot be overemphasized. Our industry is at a crossroads and actions taken now will affect the future of labor relations in Hollywood and beyond,” said Matthew D. Loeb, president of the IATSE , in a statement. “Their fight today foreshadows our fight tomorrow.”

Cooler heads could prevail. Perlman, for his part, later apologized for getting so excited. He begged studio executive to find “some measure of humanity”.

“It can’t be all about your (expletive) Porsche and your (expletive) stock prices,” Perlman said. “There has to be dignity when we hold up a mirror and reflect human experience, and that’s what we do as actors and writers.”

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Aron Ranen contributed to this report.