Entertainment Industry Loses $10 Billion in One Day Following WGA Strike
For those who think the stock market is the best way to measure the health of any industry, it’s clear that the Writer’s Guild of America nationwide strike has landed a mighty blow on the entertainment industry. That’s because, while we are only on the second day of the strike, the U.S. entertainment industry already lost more than $10 billion in shares value. However, while these numbers might seem optimistic for those supporting the strike – this writer included – some caution as advised since the stock market is a volatile beast.
The WGA’s strike began last Tuesday, May 2, after the union's proposals to give entertainment writers fair wages and decent work conditions were blatantly ignored by the Alliance of Motion Picture and Television Producers, the organization representing Hollywood’s biggest studios. As a result, several companies halted the production of TV shows, which might affect the release of new content through different platforms in the long term. Yesterday, May 3, we managed to see the first economic results of the WGA’s strike, as the share values of several entertainment companies dropped, amassing a loss of $10 billion for brands such as Paramount Global, Comcast, and AMC Networks. However, companies such as Netflix, Disney, and Warner Bros. Discovery remained stable or managed to increase the value of their shares slightly.
What Does the Recent Entertainment Stock Loss Means for the WGA Strike?
The stock market is more complicated than it might seem at first glance, and while a potential loss of $10 billion sounds like something to be celebrated, it’s essential to follow this movement with caution. For starters, the whole stock market ended on a down yesterday, May 3, which might partially explain the negative result of entertainment companies. In addition, a loss in stock value doesn’t mean a company is bleeding money. It only means the people holding these stocks own shares worth less than they did before, and if they sell them, they might lose some serious cash. Of course, in the long term, it’s still a bad sign for companies to have their stocks losing value, as investors will get scared and stop putting money into these companies. Still, it’s too soon to tell how the WGA strike will change the financial side of the entertainment industry.
Image via WGA
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It’s also important to note that the companies that own the most competitive streaming services in the market were less affected by the WGA strike and might even profit from it. That’s because, since streamer can also feed their platform with international content and old libraries, they can remain a good source of entertainment even when new episodes of our favorite series stop premiering on TV. The 2020 pandemic already showed the strength of streamers facing adversity, and the WGA strike might actually help this new business model.
That doesn’t mean there’s no hope for writers in the US, though. Across the world, many artists are already supporting the strike. And since concerns with AI tools being abused by producers are not specific to the U.S., the whole world is watching what happens with the WGA strike. As such, the WGA strike might fuel other syndicates and work associations from different corners of the world to also join the fight. That would be the best outcome possible, as what happens in Hollywood tends to affect the global entertainment industry.
Stay tuned for updates as strikers take to the picket lines this week. Check out the WGA's informative video about the strike authorization.
Source: Collider
