Oct 5, 2021 - Economy

Trouble in Tinseltown

Illustration of picket signs shaped like film slates.

Illustration: Shoshana Gordon/Axios

Tension is escalating in Hollywood as the entertainment industry scrambles to adjust to its new streaming reality.

Why it matters: An increasing number of intra-industry spats could threaten production at a time when consumers are looking for more content choices than ever before.

Driving the news: An overwhelming majority of Hollywood’s backstage union workers voted to authorize a strike Monday, putting the future of many upcoming shows and films in question.

  • Members of the International Alliance of Theatrical Stage Employees are arguing in the wake of a recently expired contract with a trade group representing Hollywood production companies and studios that behind-the-scenes Hollywood workers, like film crew and set designers, need higher pay and better benefits.
  • They are threatening to strike if talks with the Alliance of Motion Picture and Television Producers (AMPTP) don't progress.
  • The strike would handicap major studios from being able to turn out the huge volume of shows and films necessary to meet consumers' streaming demands today.

Be smart: The last time a clash like this shut down Hollywood was in 2007 and 2008 when the Writers Guild of America failed to come to an agreement with AMPTP, causing writers to strike for 100 days.

  • Two years ago, the industry was derailed amid a spat between the Writers Guild of America and a trade group representing Hollywood's biggest talent agencies.

The big picture: The backstage workers strike threat is the latest crisis moment for an industry that's been roiled by the pandemic.

  • Studios have been hit with lawsuits in recent months from actors frustrated with the way they've been compensated in light of new simultaneous theater and streaming releases. (Disney and Scarlett Johansson finally settled a breach of contract lawsuit on this issue last Thursday.)

What to watch: Every player in Hollywood is feeling the pressure to consolidate in order to better address new content demands created by streaming.

  • Last week, Creative Artists Agency (CAA) said it is acquiring agency rival ICM Partners in a deal that marks the biggest combination of talent firms since William Morris Agency and Endeavor Talent Agency merged in 2009 to create what is now referred to as WME.
  • Amazon's announced acquisition of MGM has ushered in a wave of consolidation among niche Hollywood production studios.
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