The Hollywood writers strike has entered into its 6th week as the Directors Guild of America makes a deal with the studios. Yahoo Finance Senior Reporter Alexandra Canal details how long the strike might last and breaks down it's ongoing economic impact.
JULIE HYMAN: Now to Hollywood and some positive signs for the creative industry. The Directors Guild has reached a deal with major studios over a new three-year contract, but the writers' strike rolls on. It's now heading into its sixth week. Yahoo Finance's Allie Canal has the details. So the directors have seemingly reached a deal. Is there any relationship between the two, any implications? Tell us.
ALEXANDRA CANAL: Unfortunately, no. We have received statements from both the Writers Guild of America, along with SAG, which represents the actors union, and they have both said that while they congratulate the Directors Guild, right now they are still negotiating on their own and that this will not impact the current bargaining chips.
Now, in terms of that director agreement with studios, that includes certain provisions like more wages and benefits, a 76% increase in foreign streaming residuals, which is a type of royalty payment, along with a groundbreaking agreement confirming that AI is not a person and therefore cannot perform the duties of team members. We know AI has been an ongoing conversation for both writers, directors, actors alike as that becomes more of the norm in Hollywood and beyond, along with the banning of live ammunition on sets after the "Rust" shooting death in October 2021.
So there were several highlights within this package. The board is now going to vote on this tomorrow-- Tuesday-- and then that will hopefully get approved. So this is a step forward. But in terms of this ongoing writers' strike, which as we mentioned just entered its sixth week, that has shown no end in sight. And that will likely delay more production shutdowns. We're not going to be able to see some of our favorite shows probably when we want to. And then, of course, the economic implications on the LA economy.
BRAD SMITH: All right, so it sounds like we're just going to have to grapple with a lot of reality TV at this point.
ALEXANDRA CANAL: And international programming as well because this is only in America. So perhaps we'll see more international programming along with that reality shows.
BRAD SMITH: Realistically, what type of compensation bump could we see as a result of this, if there is one?
ALEXANDRA CANAL: It's hard to say. A lot of this has to do with streaming and the streaming residuals. Writers are saying that these big tech companies like Netflix, they are hiring writers for a very short amount of time and looking to pay them the least amount of money. So they're optimizing as much as they can, and that is really hindering the creative process for a lot of these writers, and they say that's not possible anymore.
So that is the largest issue. And then on top of that, you have a lot of these companies dealing with heavy streaming losses. So they're not looking to really shell out a bunch of cash to these writers, so they're sticking strong with their points while the studios, although they say they want to reach a deal, they also have to think about their own costs. So it's this push-pull here that I don't know if we're going to have an answer anytime soon. And the last writers' strike, that lasted 100 days and cost the LA economy an estimated $2.5 billion.
BRAD SMITH: Wow.
ALEXANDRA CANAL: So the longer this goes on, the more implications we're going to see.
BRAD SMITH: Right, sounds like a lot more "Love Is Blind" is in my future.
ALEXANDRA CANAL: Exactly.
BRAD SMITH: Thanks so much, Allie.