Hollywood writers strike comes to an end; AI in the spotlight
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Hollywood writers are poised to return to work on Wednesday morning after the governing boards of their unions approved a new contract with major studios. The strike, which lasted nearly five months, will still need to be endorsed by the writers themselves in early October, but the new deal will allow them to work during that process. Late-night talk shows will be the first to resume production, but scripted episodes and films will take longer to return, with the Screen Actors Guild still on strike and similar negotiations likely taking place after the Writers Guild of America ratifies its agreement.
What's in the new contract? Writers were able to secure some big wins, including salaries increases, bonuses for high-performing shows and guarantees for a minimum number of staffers. Among the bigger provisions is the ability to share in the success of content that performs well on streaming services like Netflix (NASDAQ:NFLX), or a residual payment based on viewership, which will be calculated by hours streamed and runtime. The cost of the strike is said to be in the billions of dollars, with the market values of Disney (NYSE:DIS), Paramount (NASDAQ:PARA) and Warner Bros. Discovery (NASDAQ:WBD) plunging by 20%-45% since early May (NBCUniversal (NASDAQ:CMCSA) was the only major studio to buck the trend).
Another big reason behind the strike was to secure protections against the use of artificial intelligence. Under the new contract that runs until May 2026, writers have the right to use AI with consent from their production partners, but they can't be forced into using or incorporating AI-generated content (which must come along with disclaimers). AI-generated storylines will also not be regarded as "literary material," meaning computers cannot get screen credits or associated rights, though the language surrounding the usage of writers' material to train AI was more controversial.
Will it be enough? "They spent months trying to craft words to protect writers from AI and they ended up with a paragraph that protected nothing from no one," according to media mogul Barry Diller, former CEO of Paramount Pictures and founder of the Fox Broadcasting Company. "Fair use needs to be redefined, because what they have done is sucked up everything and that violates the basis of the copyright law. All we want to do is establish that there is no such thing as fair use for AI, which gives us standing."
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