Thousands of film and television writers were headed to picket lines on Tuesday after union negotiators called a strike, sending Hollywood into turmoil and disrupting TV production as the industry wrestles with the shift to streaming.
The Writers Guild of America (WGA) said its leadership unanimously supported its first work stoppage in 15 years after failing to reach an agreement for higher pay from studios such as Walt Disney Co (DIS.N) and Netflix Inc (NFLX.O).
"The companies' behavior has created a gig economy inside a union workforce," said the WGA, which represents roughly 11,500 writers.
The strike hits Hollywood studios at a difficult time. Conglomerates are under pressure from Wall Street to make their streaming services profitable after pumping billions of dollars into programming to attract subscribers.
The rise of streaming has led to declining television ad revenue, as traditional TV audiences shrink and advertisers go elsewhere. The threat of a recession in the world's biggest economy also looms.
The last WGA strike in 2007 and 2008 lasted 100 days. The action cost the California economy an estimated $2.1 billion as productions shut down and out-of-work writers, actors and producers cut back spending.
The Alliance of Motion Picture and Television Producers (AMPTP), which represents studios, said it had proposed "generous increases in compensation," and was willing to increase its offer.
But it said it objected to WGA demands that "would require a company to staff a show with a certain number of writers for a specified period of time, whether needed or not."
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Writers say they have suffered in the streaming TV boom with shorter seasons and smaller residual payments.
"Wow. This is scary," Emmy-winning writer Ashley Nicole Black wrote on Twitter after the strike was called. "But a future where we accept what the companies are trying to do - low paid, freelancer writing gigs with no job security - is much scarier."
For TV viewers, the strike's first impact will be seen on late-night talk shows such as "Jimmy Kimmel Live" that count on teams of writers to pen topical jokes for programs recorded on the day they are broadcast.
Those shows are expected to immediately start airing re-runs.
"The Late Show" host Stephen Colbert, in an episode taped just hours before the strike was called, showed pictures of his writing staff on screen in a gesture of support.
"They're so important to our show," said Colbert, who also is a WGA member. "I think that the writers' demands are not unreasonable."
Other TV programming may be disrupted depending on how long the strike lasts.
Writers said they were willing to walk off the job because changes from streaming have made it difficult for many to earn a living in expensive cities such as New York and Los Angeles.
Half of TV series writers now work at minimum salary levels, compared with a third in the 2013-14 season, according to WGA statistics. Median pay for scribes at the higher writer/producer level has fallen 4% over the last decade.
Artificial intelligence (AI) is another issue at the bargaining table.
The WGA wants safeguards to prevent studios from using AI to generate new scripts from writers' previous work. Writers also want to ensure they are not asked to rewrite draft scripts created by AI.
With a potential strike looming, production already had ground to a halt in Los Angeles. Film LA, which issues permits for filming in Los Angeles, said it had no shoots for scripted shows scheduled for Tuesday or the rest of the week.
If the work stoppage becomes protracted, the networks will increasingly fill their programming lineups with unscripted reality shows, news magazines and reruns. It also could lead to a delay of the fall TV season. Writing for fall shows normally starts in May or June.
Netflix may be insulated from any immediate impact because of its global focus and access to production facilities outside of the United States.
