Despite the now-resolved writers and actors strikes shutting down Hollywood production for several months, the loss of tens of thousands of Tinseltown jobs this year actually is part of a larger economic contraction, a just-released study claims — and those gigs might not be coming back.
“Entertainment Industry employment in Los Angeles this year peaked in April, when 142,652 workers were employed by the Industry,” says Otis College of Art and Design’s “The Day After Tomorrow” study, produced by Westwood Economics and Planning Associates. “As of October, there were 24,799 fewer workers employed by the Industry than there were in April,” the California-centric report states of the 17% drop.
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Set to be the first of two studies on the entertainment biz, the report released Thursday (read it here) estimates that ress”Greater Los Angeles Entertainment Industry workers lost roughly $1.4 billion in wages between April and September 2023, or roughly 0.5% of the industry’s annual economic activity.” During the WGA and SAG-AFTRA strikes, which ended in late September and late last month respectively, the California economy overall took a $6.5 billion hit. Nationally, according to the Bureau of Labor Statistics, over 45,000 jobs were lost from when the 12,000-strong scribes guild hit the picket lines in early May, followed by the 160,000-strong actor’s guild in mid-July, to mid-October.
“Beyond the short-term impact, the strikes should be understood within the context of a broader restructuring of the Industry: employment was contracting in the Industry even before the strikes,” the Otis College reports declares. “Employment in the Industry peaked in May of 2016, and reached nearly the same level in August of 2022. Since this time, employment has shrunk by 26%”.
One of the primary authors of Otis College’s “Day After Tomorrow” warns that end of the strikes, which officially came on Dec 5 with SAG-AFTRA members voting to ratify their deal with the studios by just over 78%, don’t mean everything will be returning to normal. In fact, Patrick Adler, Principal at Westwood Economics and Planning Associates and Assistant Professor at the University of Hong Kong, says normal had left the ever-changing industry way before the strikes started
“The end of the strikes means there’s a possibility of reversing the steady and steep employment declines of the last year,” Dr. Adler told Deadline today. “But it’s an open question if all of the lost jobs over the past year are coming back,” he added.
“We show that the industry’s business model is at a serious inflection point. Fundamental questions about how much content will be produced and how it will be paid for are less resolved now than they were ahead of the last SAG-AFTRA deal,” the academic went on to say. “The industry’s employment level hangs in the balance. We should resist the urge to see ratification as an end to some great reckoning.”
From Disney’s Bob Iger on down, executives over the past year have stressed a shift to less shows and projects in a cost-saving and stock bumping moves cloaked as “quality over quantity.”
“Almost all of Hollywood production is controlled by publicly traded companies, and Wall Street has exerted more pressure on the industry since interest rates spiked in 2022,” Dr. Adler notes. “Basically, one dollar of production money is much more expensive today than it was in 2021, and so the street expects higher return.”
Putting a spotlight on the shortcomings of streaming services as revenue streams, the18-page report itself says: “The bigger picture reveals that Peak TV, rather than the strikes, represents the more enduring threat to employment in the Industry. An arms race among streaming platforms heralded a surge in production between 2016 and 2022, as platforms pursued subscriber growth at all costs. As this business model has transitioned into one which emphasizes profitability and sustainability, we have likely reached the highwater mark in production.”
Worth noting that while the WGA and SAG-AFTRA have reached new contracts with the studios, IATSE and the Teamsters will be entering negotiations with the AMPTP next year. As the Hollywood employment contraction tightens further, both those unions will clearly have job saving as one of their top priorities as more strikes and standstills could loom.
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