SAG and WGA Strikes

For the first time since 1960, the Screen Actors Guild (SAG) and the Writers Guild of America (WGA) have gone on strike as a result of unsuccessful negotiations with the Alliance of Motion Picture and Television Producers (AMPTP).  While production studios’ interest in AI has emerged as one of the main talking points due the AMPTP’s allegedly poor reaction to the WGA’s AI proposals[1], the issues run much deeper, and point to a longer battle between creative labor and developing technologies within the Entertainment industry.

Residuals have Always Been the Real Issue

While this is only the third time that actors in Hollywood have ever gone on strike, the writers of the WGA were historically overdue[2]. It’s been 14 years since the last strike–in 2007–which is the longest the WGA (or it’s forerunner the Screen Writers Guild) had gone without striking since 1953. Residuals–payments to writers or actors for the re-airing or re-screening of movies or episodes of TV shows– have been at the heart of all of these disputes over the past half century.

                Hollywood’s current payment structure for residuals was developed in 1960 following the last time that the actors and writers enacted a joint strike.[3] In this system, the amount of residuals that an actor or writer received for their contribution to the production was typically based on several factors: the length of a movie or show; the size of a role or contribution to the script; the production’s budget; and where the film or show is played. The per-play payment model decreases over time until it hits a set minimum, but for a show or movie that was constantly being re-aired, the writers or actors still received a steady stream of income–even decades later–for a property that clearly still had market value.

New Technologies Have Been a Constant Tension

For the past 70 years, the effect of developing technology on residual payments has been a driving force behind these disputes. The first writers’ strike, in 1953, focused on monetization of reruns on TV–an entirely new medium. The 1960 strike dealt with theatrical movies being shown on TV; In 1973, it was Pay-per-View and videocassettes; in 1981, the principal concern was syndication of network TV on the recently launched basic cable networks. Most recently, in 2007, the core issue was residuals from digital downloads. From the WGA’s perspective, every time there is a technological shift that expands film and TV distribution, their members lose out on their share of the profits.

The Current Streaming Revolution is No Different

                Today, the conflict centers on residuals from streaming platforms. When streaming first started in 2013 the platforms were able to make a “new media” exception from the previous AMPTP deals with SAG and the WGA. So rather than residuals being calculated from the number of views that a piece of content receives, they are based on the number of subscribers the streaming service has and how much the talent was originally paid.[4] Functionally, this means that no matter how popular the content is–and the extent to which it drives the popularity of the streaming service– the actors and writers are getting paid the same as if it was a flop.  Creative talent from hit Netflix shows and movies are receiving residuals in the hundreds of dollars, instead of the tens of thousands that they would have gotten if the same projects had been released as traditional TV or film.

                A blow-up over this issue has been brewing for a while. In 2019, the WGA launched a quasi-strike against Hollywood’s major talent agencies[5]. This was in protest of certain practices the agencies had all adopted to maximize their own revenue from streaming services–also a response to the diminishing residuals–at the expense of their writer clients. The WGA won that conflict, forcing the agencies into a new agreement. The understanding was that a similar hard line was to be taken with upcoming contract talks with the AMPTP. These ended up being forestalled by the COVID-19 pandemic, which rendered any strike pointless—kicking the conflict down the road to today.

                While AI is definitely part of the conversation, it’s just the latest in a long line of technology-based disputes between creative labor and studios. The WGA isn’t particularly concerned about AI replacing writers today. Programs like Chat GPT simply aren’t sophisticated enough yet–so the main worry is that AI could facilitate scabbing by generating content that a writer willing to cross the picket line could rework into a usable script.[6]  AI is more central to the SAG strike, because technology is much closer to being able to replace performers. [7] We can all think of recent blockbuster movies that featured computer generated performances by long dead actors or an older actor’s digitally de-aged head on a body double (I’m looking at you Indiana Jones And the Dial of Destiny). But for both WGA and SAG, the threat is ultimately the same as it’s been since 1953–studios using new technology to monetize content without additional payments to the creative labor.

Copyright Law Has Also Had to Navigate This Struggle

                Fights of over money generated from new media is a familiar topic to copyright law. Over the years, the Second Circuit has seen a slew of cases where the court had to analyze whether various copyright licensing agreements covered new technologies—some of which had developed since the signing of the agreement. 1998s Boosey & Hawkes v. Walt Disney, looked at whether the 1939 license to use Igor Stravinsky’s Rite of Spring in Fantasia extended to home video releases. The court concluded that it did, because the contract stipulated that Disney had the “right to record in any manner, medium or form and to license the performance composition.” Similarly, the Southern District of New York found, in 2014’s Harper Collins v. Open Road, that an author had granted eBook rights to the publisher—again, even though the technology had not existed at the time of signing—because the language of the agreement seemed to encompass future media. As a result, copyright lawyers know to address new technology clauses in licensing contracts, which often take the form of, “exploitation by any means now known or unknown.”

Obviously, copyright protections are not available to actors or writers in situations where the studios own the underlying IP. But the chain of WGA disputes over the last 70 years suggests that “work for hire” or creative labor contracts may need to adopt similar provisions as “new tech” clauses in copyright licensing. Or at the very least adapt to better foresee these issues-to the extent that is possible anyway. Otherwise, we’re likely going to see another iteration of these strikes sometime in the next decade. History, being doomed to repeat it, and all that.

Going Forward, Entertainment Lawyers Are Going to Need to Anticipate How New Technology Affects Their Client’s Needs.

                We’ll have to see how this current dispute ends before we can draw too many conclusions about its effect on the future of the film industry, but clearly this conflicted relationship between new technology and creative labor is not just a topic du jour. Whether this leads to the creation of differentiated types of licensing for performances or works for hire remains to be seen. Entertainment attorneys who want to get the best possible contracts for their clients are going to need to understand and even anticipate how new technology will affect exploitation of creative labor.