How Will the Hollywood Strikes Impact Media Agencies?

Wherever in the media landscape you look, the Hollywood strikes have been making headlines since the spring. Both the WGA (Writers Guild of America) and SAG-AFTRA (the Screen Actors Guild and American Federation of Television and Radio Artists) began strikes, in April and July respectively, to fight for improved compensation for their work and strengthened professional standards.

At the crux of the issue lies the streaming platform takeover, which the striking unions claim has resulted in actors and writers not being compensated sufficiently - especially compared to the viewership and replayability of the media available on streaming sites like Netflix and Disney+. This is the first time since the ‘60s where both SAG-AFTRA and the WGA have been in a dispute with the AMPTP (Alliance of Motion Picture and Television Producers) at the same time.

As more negotiations continue, with the unions demanding better residuals from streaming media, protection against the use of AI, and other improvements to job security and pay, Hollywood’s productions remain - by and large - at a standstill. 

So what does this mean for the advertising world? Well, with the strikes limiting how a production can be promoted, and by who - not to mention the obvious dilemma of productions simply ceasing to move forward and being released - it does raise some intriguing questions, especially for the media space.  

LBB’s Ben Conway spoke with experts from the7stars, Wavemaker and Ogilvy to find out how media agencies are responding to the strikes’ repercussions, if cinema advertising may disappear temporarily and if we’ll see a rise in content from non-striking bodies and industries outside of the US.

“We're meticulously tracking the situation,” says Ogilvy’s North American head of content and media, Shruti Tiwari. “Nielsen (TV ratings) data highlights the pivotal role of cinema advertising, reaching over 160 million moviegoers in the US in 2019. However, there's a looming possibility of a temporary disappearance or reduction in cinema advertising spend as Hollywood projects face delays.”

the7stars’ head of AV, Nicola Teague, agrees that cinema is likely to continue suffering into 2024, thanks to delayed releases and ultimately, a reduced cinema slate. However, she remains hopeful about movie marketing. “It’s very unlikely that we’ll see a total disappearance of cinema advertising,” she says, “but opportunities could be more limited when compared to previous years.”

Since the previous Hollywood strikes of 2007/2008, Nicola notes that the video content and streaming landscape has “changed exponentially” - and therefore the global TV, VOD and advertising industries may see knock-on effects thanks to less Hollywood content being available in which to place ads.

While Sam Olive, head of video at Wavemaker UK, agrees there are undoubtedly ripples to be felt in adland and other media industries, she thinks it’s “unlikely” that these ripples become waves. “Seemingly the most impacted media would be cinema, yet, at the point of writing this, the only major release we have seen move back into 2024 is ‘Dune 2’. 

She continues, “The impact of this and any further impact to the 2023 film slate should be more than compensated for by the monster success of the ‘Mario’-’Barbie’-’Oppenheimer’ trifecta. Historically, past strikes and any impact they had on content production hasn’t translated to a significant drop in admissions.”

With the American movie industry seeing potential long-term impacts, Shruti points to other rapidly growing sectors - streaming services, influencer marketing and gaming - that advertisers might need to diversify into and pivot their strategies towards. She says that reallocating resources towards digital advertising, streaming platforms and influencer and television advertising is “becoming imperative” as they are “more disruptive, innovative and interactive to where consumers are.” 

Nicola agrees that diversifying beyond movies may be a necessity for marketers, predicting an increase in reality TV shows and an enhanced focus on live sport in 2024, with the UEFA EURO tournament and Olympics providing opportunities to reach large-scale audiences.

Additionally, the strikes “pose a great opportunity for locally produced TV series and films,” says Nicola. “And perhaps provides valid rationale for an increase in arts and culture investments in the UK.”

Similarly, Wavemaker UK’s Sam Olive believes that streaming platforms and advertisers alike are likely to be cushioned from the effects of the strikes, thanks to the continuing work of international production industries and subscription VOD services like Netflix who have “a dedication to local markets and huge (and popular) library content.”

“This situation opens doors for smaller, innovative projects to shine,” adds Shruti, “presenting opportunities for independent content creators.” She concludes, “While cinema advertising may temporarily recede, embracing digital channels and collaborating with emerging content creators can help navigate these disruptions successfully.”