The recent Hollywood strikes have had a significant impact on the entertainment industry, leading to cutbacks in projects, fewer job opportunities, and changes in business models. The strikes have particularly benefitted studio conglomerates that were already struggling due to streaming losses. With studios using the strikes as a reason to reset business plans and make sharp cuts, Moody’s Investors Service has estimated that the work stoppages will result in around $10 billion in free cash flow over a 12-month period across major conglomerates such as Disney, Comcast, and others.
Disney and Warner Bros. Discovery have also cut thousands of jobs and slashed billions of dollars in production and marketing costs. The availability of cheap debt and the potential of streaming platforms has led the entertainment industry to spend heavily on content production in recent years. However, rising costs have led to a different approach, with focus shifting to short-term talent holding deals and other project-by-project transactions.
The strikes and COVID shutdowns have resulted in long-term changes within the industry. Business executives expect significant austerity measures to be put in place, with the potential for studios to reduce their use of A-list talent, filming on location, and postproduction spending. Additionally, the strikes have led to newly activated union members advocating for contract enforcement and pushing for future gains that will impact the industry’s distribution of wealth.
The impact of the strikes has also been felt by moviegoers and TV fans, as several big-budget sequels and TV series have been delayed or shelved. With production getting back on track, there is the anticipation of scheduling bottlenecks and delays that may affect the release of several upcoming films. On the small screen, broadcast network schedules have been impacted, but there is a clear picture emerging, indicating that the industry is striving to get back on track.