Hollywood industry is in crisis after strikes and streaming wars

Michael Fortin was at the center of Hollywood’s golden age of streaming.

The actor and aerial cameraman turned his hobby of flying drones into a profitable business in 2012, just as the streaming wars began. For a decade, he flew high over movie sets, creating elegant aerial shots for films and television shows on Netflix, Amazon and Disney.

Now he’s on the verge of becoming homeless – again. He was evicted from the Huntington Beach home he shared with his wife and two young children and is now being evicted from the Las Vegas apartment they moved to because they could no longer afford it in Southern California to live.

“We were saving to buy a house, we had money, we had done things right,” he says. “Two years ago, I wasn’t worried about going out to dinner with my wife and kids and spending $200.”

“Now I’m worried about going out and spending $5 on a cheap meal at McDonald’s.”

For over a decade, business in Hollywood was booming, and studios struggled to catch up with new entrants like Netflix and Hulu. But the good times came to an end in May 2023 when Hollywood writers went on strike.

The strikes lasted several months and marked the first time since the 1960s that both writers and actors joined forces, bringing Hollywood production to a virtual standstill. But instead of fighting back, production has stalled in the one year since the strikes ended.

Projects were canceled and production halted across the city as jobs dried up and layoffs occurred at many studios – most recently Paramount. A second round of layoffs took place this week as the venerable film company plans to cut 15% of its workforce ahead of a merger with production company Skydance.

Film and television unemployment in the United States was 12.5% ​​in August, but many believe those numbers are actually much higher because many film workers either don’t file for unemployment benefits because they’re not eligible , or because they have exhausted these benefits after months without work.

Overall, the number of U.S. productions fell about 40% in the second quarter of 2024 compared to the same period in 2022. Globally, there was a 20% decline during this period ProdProwhich follows television and film productions.

For us, this means that there are fewer new films and binge-worthy series.

But experts say the streaming boom was unsustainable. And studios are trying to figure out how to be profitable in a new world in which people no longer pay for cable TV funded by advertising.

“The air has come out of the content bubble,” says Matthew Belloni, the founder of Puck News, which covers the entertainment industry. “Crisis is a good word. I’m trying not to be alarmist, but people feel like they’re in crisis.”

Part of the boom was fueled by Wall Street, where tech giants like Netflix posted record growth and studios like Paramount saw stock prices rise as they added their own streaming service offerings.

“It has caused the content market to overheat. Just a few years ago, there were 600 live-action scripted series airing, and then the stock market stopped rewarding that,” says Belloni. “Netflix crashed – all other companies crashed. Netflix has now recovered – but the others are really struggling to break even.”

And in addition to the streaming bubble bursting, some productions are also being lured away from California by attractive tax incentives in other states and countries. Los Angeles leaders are so worried about the downturn that Mayor Karen Bass last month launched a task force to consider new incentives for film production in Hollywood.

“The entertainment industry is critical to the economic vitality of the Los Angeles region,” Bass said in announcing the plan, saying it is a “cornerstone” of the city’s economy and creates hundreds of thousands of jobs.

Current data shows the entertainment industry contributes over $115 billion (£86 billion) annually to the region’s economy and employs over 681,000 people, the mayor said.

Writers’ and actors’ strikes lasted months and resulted in union contracts that provided more money and protections from artificial intelligence.

Duncan Crabtree-Ireland, chief negotiator for the Screen Actors Guild union, told the BBC that some consolidation in Hollywood was inevitable. He says he is optimistic that production will be ramped up soon.

“What makes these companies special and gives them their unique ability to create value is their relationship with creative talent,” he said as he visited a picket line in September outside a Disney office where video game voice actors are currently on strike and for the like fight protective measures.

Hollywood “always thinks it’s in crisis,” he says. “It’s a city that’s constantly facing technological innovation – changes of all kinds – which is part of the magic. Part of the relevance of the content is that everyone has the idea that things don’t always have to be the way they were.”

Mr Fortin’s drone company was in operation almost every day before the attacks. Now he has flown the drones just 22 days a year since the attacks ended. And as an actor – he often plays tough guys – he only worked 10 days. He used to work as a background actor to make ends meet, but the pay barely covers the gas money to get from Las Vegas to Los Angeles.

“It was a great wave and it crashed,” Mr. Fortin said after a day with his drones on the AppleTV+ show Platonic — his first drone appearance since April.

“Things come little by little,” he says in his van before heading back to Las Vegas for a court hearing to challenge his eviction order.

“Hollywood gave me everything,” he says. “But it feels like the industry has turned its back on a lot of people, not just me.”