As actors strike ends, media analysts expect slow trickle of new content and higher subscription costs

The Screen Actors Guild reached a tentative deal with studio and streaming trade association Alliance of Motion Picture Television Producers on Wednesday, ending a nearly four-month long strike that ground much of Hollywood to a halt.

The deal, which the SAG-AFTRA’s national board of directors is reviewing Friday, includes provisions to protect members from the threat of AI through “consent and compensation,” increase minimum wages and benefits and establish a streaming participation bonus for the first time.

Actors will be given approval rights for digital replicas of themselves and will be compensated for their use. This extends to deceased actors, SAG-AFTRA national executive director and chief negotiator Duncan Crabtree-Ireland told Rolling Stone.

Establishing robust AI protections for actors was one of the key reasons the negotiations dragged on longer than the writers’ strike, which ended in September.

SAG-AFTRA’s 118-day strike officially ended at 12:01 a.m. Thursday.

President Joe Biden on Thursday released a statement praising the “collective bargaining” by the two groups. “When both sides come to the table to negotiate in earnest they can make businesses stronger and allow workers to secure pay and benefits that help them raise families and retire with dignity,” he said.

The agreement allows many shows and movies to get back to filming immediately, though several planned productions have been pushed in 2024 and 2025. 

As a result of the dual strikes, the volume of new TV shows and films produced this year is expected to drop substantially from prior years, resulting in a slower feed of fresh content that may impact consumer appetite for subscriptions for some time.

Campaign US asked media experts how they expect the new contract terms and the impact of the strike to play out on the streaming industry.

Kate Scott-Dawkins, global president of business intelligence, GroupM

People, and markets, tend to hate uncertainty, so having a resolution of the strike before the end of the year will likely benefit advertiser and media owner confidence. 

We will see a few projects shift onto next year's slate, and some further impacts to release schedules, but ultimately many of the elements driving our December forecast are more systemic: the acceleration of cord-cutting in the U.S. (among top MVPDs we estimate a roughly 12% decline in the third quarter versus last year), the amortization of content costs across global (rather than national) audiences and the increasing importance of sports in both streaming and linear economics. 

From early reporting, the streaming revenue share was not part of the deal. Studios are going to be relying on that streaming revenue (from both advertising and subscriptions) to replace linear affiliate revenue faster than cable subscriber fees disappear. 

Mike Proulx, VP, research director, Forrester

Finally, the Hollywood actors strike is over. If the SAG-AFTRA national board approves the tentative agreement Friday, members will receive (among other benefits) a “streaming participation bonus” for go-forward projects. The holistic deal has been described as “extraordinary” for actors and, in part, is a step towards reconciling compensation models appropriate for the inevitable all-streaming future.

As the streaming business becomes more like the TV business, we’re at an inflection point where profitability is at play. Outside of Netflix, most other major streaming platforms still face operating losses. Disney+ remains steadfast in turning a profit by the end of 2024. But this comes at a cost to users. 

The outcome of the Hollywood strike will inevitably lead to higher costs for studios and streaming platforms. This means less content gets produced and more price increases are in store. Ultimately, consumers will get less value out of their streaming subscriptions – unless, of course, they’re willing to tolerate ads until such a point when streamers raise the prices on their ad tiers too.

Brian Wieser, principal, Madison and Wall

I don’t think it will have a major impact on streaming services. Perhaps Netflix had — or will have, given the timing gaps between production and release of content — a slight advantage over others given the depth of their library and thus an abundance of “new” content in the eyes of consumers. But I don’t think it was a massive advantage and thus so long as everyone is on a relatively equal footing each service focused on general entertainment is more or less impacted similarly. Perhaps more new content incrementally contributes to growth in the use of streaming services, but that trend was already well underway. 

Hunter Terry, general manager of CTV, Lotame

The new terms agreed upon between SAG-AFTRA and the studios are likely to impact streaming platforms in several ways. First and foremost, the influx of fresh content, delayed by the 118-day strike, will restore streaming libraries, attracting more subscribers and retaining existing ones. This influx is expected to spark a surge in viewership as audiences eagerly engage with the long-awaited productions.

Additionally, the strike's duration has highlighted the importance of contingency planning for streaming services. Many platforms faced content shortages during the strike, prompting them to explore alternative genres, international productions and original programming to maintain audience engagement. As production ramps up, streaming platforms are expected to continue diversifying their content offerings to mitigate potential future disruptions.

Furthermore, the strike has emphasized the significance of fair compensation and working conditions for actors, setting a precedent that could influence negotiations and industry standards. Streaming platforms may need to reevaluate their budget allocation for talent, ensuring competitive pay to secure top-tier actors and creators. In essence, the strike's aftermath is likely to foster a more resilient and adaptable streaming industry, ultimately benefiting both content creators and consumers.

Bailey Calfee contributed reporting.