John Keedwell GBCT examines the impact of the ongoing writers’ strike on the wider industry, including rental houses.
The glitz and glamour of Hollywood often overshadow the intricate workings that bring captivating stories to life on the silver screen. Behind every blockbuster movie there’s a team of dedicated professionals, including writers, who create the very foundation for the magic on screen. However, in 2023, the world of cinema was plunged into uncertainty as a writers’ strike brought Hollywood to a grinding halt.
The Writers Guild of America (WGA) represents about 11,500 screenwriters working in both in film and television. In 2023, the organisation has found itself at an impasse with major studios over issues such as fair compensation, streaming rights, and working conditions. Failing to reach a satisfactory agreement, the writers decided to go on strike, demanding their voices be heard and their contributions valued.
The main focus point of the labour dispute is technology changing, and the WGA claims residuals from streaming media have cut much of the writers’ average incomes compared to a decade ago. Writers also wanted artificial intelligence such as ChatGPT to be used only as a tool that can help with research or facilitate script ideas. Not as a tool to replace writers.
One of the immediate consequences of the writers’ strike was a significant decrease in movie production. As projects were put on hold or postponed indefinitely, the demand for camera and lighting equipment declined sharply. Rental houses, which typically thrive on a steady flow of productions, suddenly found themselves facing a slump in business. With fewer films in production, the need for equipment rentals plummeted, causing potential financial strain on many rental houses, including the UK movie business.
Camera and lighting rental houses heavily rely on the often regular, yet sometimes sporadic income generated from film and television productions. During the writers’ strike in 2008 projects were halted or delayed, and this caused rental houses to experience a prolonged and indefinite period of uncertainty. The disruption in the normal flow of business made it challenging for rental houses to forecast revenue and plan for the future. This uncertainty affected not only the rental houses but also their employees, who faced potential layoffs or reduced hours.
Due to the nature of advancing technology, camera and lighting rental houses need to invest substantial resources in acquiring and maintaining an extensive inventory of state-of-the-art equipment. However, the 2023 writers’ strike has already led to potential prolonged periods of inactivity, making it difficult for rental houses to keep their inventory fully utilised. The idle equipment requires storage space, and most companies work on the principle of the vast majority of the gear being out of the building, thus creating storage difficulties when it is all back at the warehouse on the shelves. The relatively predictable fixed costs associated with employing a workforce is exacerbated when the revenue is not being generated by the gear out on long term jobs.
As the strike disrupted the industry, it created a lack of demand with an oversupply of gear, a classic mismatch on supply and demand, one of the first subjects taught in school economics. Often the knee-jerk tendency is to adapt (or lower) pricing strategies to compete for the work with the other companies who are also doing the same. This can lead to a very quick race to the bottom, and the inability to invest in new gear when the need arises. With decreased demand, the fierce competition among rental houses has undoubtedly intensified.
To attract the limited number of productions still in operation, some rental houses have resorted to offering competitive pricing, discounts, or flexible rental agreements. While this may help to secure some new business, it will further strain any profit margins, making it harder to sustain operations in the long run.
Sales are a vital part of any operation, and even more so now this situation has arisen. There should be a team of people in both good times and bad constantly looking for new business, and not totally relying on the phone to ring from regular customers going from one production to another. The brightest upcoming DPs and gaffers should be looked at in greater detail and targeted with competitive deals and demonstrations of new and exciting kit to use. These people are the future of the business for the next decades to come, and they should be given every opportunity to shine. This creates a potential brand loyalty to individual companies for many years to come.
In times of crisis, necessity often breeds innovation. Faced with the potentially huge adverse effects of the writers’ strike, companies may be compelled to explore new avenues and diversify their services like never before. This could include expanding their offerings to cover other segments of the entertainment industry, if these areas haven’t already been affected. Embracing technological advancements and adapting to changing market demands may enable rental houses to mitigate the impact of future strikes or industry disruptions.
While the strike has caused short-term disruptions and financial strain, it also presents an opportunity for rental houses to innovate, diversify, and adapt to changing industry dynamics. As the industry recovers from the strike, rental houses will continue to play a crucial role in supporting the production of compelling stories on the big screen.
One sobering thought. The longest strike in the history of the WGA was in 1988 and lasted 21 weeks and six days (153 days). It cost the American entertainment industry an estimated $500 million.
The most recent 2007-2008 strike saw the guilds on strike for 14 weeks and two days (100 days). According to a National Public Radio (NPR) report in 2008, the strike cost the economy of Los Angeles an estimated $1.5 billion. This affected the UK and other markets, so let’s hope this strike is settled very soon. Too many people other than writers are being affected.
