Hollywood actors will join writers on the picket lines for the first time since 1960.
SAG-AFTRA — the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world — announced a strike will begin on Thursday at midnight after failing to negotiate a deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of studios including Disney (DIS), Netflix (NLFX), Amazon (AMZN), Apple (AAPL), and NBCUniversal (CMCSA).
"Unfortunately, they have left us with no alternative," said Duncan Crabtree-Ireland, SAG-AFTRA national executive director and chief negotiator, at a press conference Thursday afternoon. He called a strike “an instrument of last resort."
It is the first time SAG-AFTRA has gone on strike in over four decades. The WGA strike is currently in its third month with no end in sight.
The union extended the negotiation deadline last week and even met with federal mediators earlier this week — a last-ditch effort to try and reach an agreement, which ultimately failed.
SAG-AFTRA is fighting for more protections surrounding the role of artificial intelligence in media and entertainment, in addition to higher streaming residuals as more movies and TV shows go direct to streaming. These demands are similar to those posed by the writers' guild.
Disney CEO Bob Iger slammed the looming strike during an interview with CNBC earlier on Thursday.
"It’s very disturbing to me," he said, describing the respective union demands as "not realistic" given the current media environment. "We’ve talked about disruptive forces on this business and all the challenges we’re facing, the recovery from COVID which is ongoing, it’s not completely back. This is the worst time in the world to add to that disruption."
'A potential scenario of massive churn'
Indeed, KPMG’s US national media leader Scott Purdy previously told Yahoo Finance that with actors joining the picket lines, audiences should prepare for re-runs and extended delays for TV shows. That's not all.
"TV and streaming services, especially those without significant international content to lean on, will run out of content soon," Purdy added. "While this might save studios and networks some short-term production budget, what people aren’t talking about is how this creates a potential scenario of massive churn for streaming services and for weaker audience metrics for TV networks, which could hurt advertising revenue."
He said local economies are likely to lose billions from production shutdowns resulting from the strikes and admitted he's unsure how resolutions can be reached with part of the standstill for both negotiations stemming from AI protections.
"This highlights how artificial intelligence and the concerns it has raised in the creative industry have become a cornerstone issue. Without frameworks and policies to address the known and unknown implications AI poses to writers, actors, and creatives, I have a hard time seeing how the strikes get to resolution," he said.
Still, there has been some good news in Hollywood after the Directors Guild of America (DGA) reached a deal on a new three-year contract last month.
The agreement included gains in wages and benefits, a 76% increase in foreign streaming residuals (a type of royalty payment), a "groundbreaking agreement" confirming that AI is not a person and therefore cannot perform the duties of DGA members, and the banning of live ammunition on sets after the October 2021 shooting death on the set of "Rust."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com
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