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Hollywood writers’ strike will disrupt content pipeline of Apple TV+ and other streaming services

The Writers Guild of America failed to reach a new deal with Hollywood studios before the May 1 deadline, and the previous union contract has now expired. As a result, all union writers are officially on strike as of today.

Industry sources indicate the studios and the guild are still very far apart on agreeing terms, which suggests the strike could go on for many months. This poses a downstream problem for the content pipeline of streaming services like Apple TV+

On behalf of its members, the Writer’s Guild of America is fighting for better terms like higher base pay, higher residuals for streaming content, minimum numbers of writers on staff for shows, and more.

The WGA has been officially negotiating with the Academy of Motion Picture Arts and Sciences (which represents Hollywoods studios including streamers like Apple) since March. But the two sides failed to agree to a new deal, hence the strike.

A strike means that writers are not allowed to work, in any capacity. This halts progress on any TV show and movie in development. Studios were reportedly rushing to get as many scripts as possible finished in the run up to May 1, as most people expected that a strike would happen.

But if the strike goes on for a prolonged period, that content pipeline will gradually dry up. Indeed, some industry watchers are predicting that it could take more than three months for the guild and the studios to make a deal. The 2007 writer’s strike lasted four months, for instance.

In practical terms, streamers like Apple TV+ will be forced to extend their release schedules for new titles. Apple TV+ has approximately 30 known finished projects, and about a dozen currently in production. The streamer has recently been premiering about five new titles per month. On that pace, its stockpile of content would run out in about eight months time.

In response to the strike, Apple will likely have to slow down its planned number of releases for the foreseeable future, to stretch out what it does have in the can over a longer period.

As the WGA purview is limited to Hollywood, one solution for these networks starving for content is the international market. Netflix is well-positioned here with a large international base. We may see Apple accelerate its expansion into international series in order to plug the gaps in its scheduling.

In fact, we may have already publicly observed some of this happening already. Apple notably pushed back the launch of the second season of its comedy series The Afterparty to July, after originally being set for April 28. It also recently made the (rare) move of acquiring international series Drops of God from Legendary.

For some streaming service execs, a strike may actually be spun as a good thing. Many streamers are looking to cut costs, and strikes are one way these companies can spend less without the associated negative PR of layoffs and cancellations. It may also be used as an excuse to invoke “force majeure” closes to get out of some pricey overall deals with talent, that they have come to regret.

But Apple is not in that camp. It needs more content to attract subscribers to TV+, which is still very much in its growth phase. A writers’ strike is an obstacle to that end, having only recently fully recovered from the impacts of COVID-19 on production and its content output.

More bad news may also be on the way, with the Screen Actors Guild and Directors Guild of America also preparing to negotiate new deals this summer. SAG has already indicated that it will stand in solidarity with the writers guild. There’s a chance we see Hollywood writers, actors, and directors all go on strike this year.

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