In Hollywood, the strikes are just part of the problem

Existential hand-wringing has always been part of Hollywood’s personality. But the crisis in which the entertainment capital now finds itself is different. The movie and television business is being buffeted on a dizzying number of fronts. And no one seems to have any solutions.

On Friday, roughly 160,000 unionised actors went on strike for the first time in 43 years, saying they were fed up with exorbitant pay for entertainment moguls and worried about not receiving a fair share of the spoils of a streaming-dominated future. They joined 11,500 already striking screenwriters, who walked out in May over similar concerns, including the threat of artificial intelligence.

At the same time, Hollywood’s two traditional businesses, the box office and television channels, are both badly broken.

This was the year when moviegoing was finally supposed to bounce back from the pandemic. At last, cinemas would reclaim a position of cultural urgency. But ticket sales in the United States and Canada for the year to date (about $4.9 billion) are down 21% from the same period in 2019, according to Comscore, which compiles box office data.

And fewer than 50 million homes are expected to pay for cable or satellite television by 2027, down from 64 million today and 100 million seven years ago, according to PwC. Disney, NBCUniversal, Paramount Global and WarnerBros. Discovery have relied for decades on television channels for fat profit growth. The end of that era has resulted in stock-price malaise. Disney shares have fallen 55% from their peak in March 2021. Paramount Global, which owns channels like MTV and CBS, has experienced an 83% decline over the same period.

And then there is streaming. For a time, Wall Street was mesmerized by the subscriber-siphoning potential of services like Disney+, Max, Hulu, Paramount+ and Peacock, so the big Hollywood companies poured money into building online viewing platforms. Netflix was conquering the world. Amazon had arrived in Hollywood determined to make inroads, as had the ultra-deep-pocketed Apple. But to make services like Disney+, Paramount+ and Max (formerly HBO Max) profitable, their parent companies have had to slash billions of dollars in costs and eliminate more than 10,000 jobs.

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