Fran Drescher, SAG-AFTRA president and the creator of the iconic Fran Fine, stepped up to the microphone, vibrating with fury. She was there with a small group of SAG-AFTRA members to announce their first strike since 1980. “The eyes of the world and particularly the eyes of labor are upon us,” Drescher said. “The gravity of this move is not lost on me, or our negotiating committee, or our board members who have voted unanimously to proceed with a strike.”

This strike is different. It’s far more complicated than just wanting a bigger cut of the hit films and TV shows that actors and writers helped create. A rapid shift toward streaming — coupled with the existential threat posed by AI — has created a canyon between what Hollywood writers and actors want and what the country’s largest media companies are willing to give. As Drescher so bluntly puts it: “You cannot change the business model as much as it has changed and not expect the contract to change too.”

For the first time in 63 years, SAG-AFTRA, the union that represents actors and actresses across the film and TV industry, has joined the Writers Guild of America (WGA) on the picket lines.  (Disclosure: The Verge’s editorial staff is also unionized with the Writers Guild of America, East.)

The WGA voted to authorize a strike back on May 2nd after it failed to negotiate a new contract with the Alliance of Motion Picture and Television Producers (AMPTP), the group that represents companies like Amazon, Netflix, Warner Bros., and Paramount. In addition to proposals for better pay and working conditions, both the WGA and SAG-AFTRA are seeking more protections for writers and actors who make content for streaming services. 

The WGA argues that the minimum guaranteed residuals it agreed upon in its most recent contract with the AMPTP are still not as much as what you’d earn making a show for broadcast television. Similarly, SAG-AFTRA is demanding increased minimum pay rates to offset inflation and isn’t happy with the residuals that actors are getting for making content for streaming services, either.  

A residual is a type of royalty that writers and actors earn when their work is reused on services, like streaming platforms or TV. Unlike when a show is released on a television network, writers and actors who work on shows for streaming services don’t get paid based on how many people view their content and the ads that are aired alongside it. Instead writers get paid two set-in-stone residuals: one for a domestic release and another for an international release. This means they aren’t entitled to receive any extra compensation even if the show they help make is a Stranger Things-sized hit.

At the crux of this issue are the streaming services themselves. Streamers have long kept their streaming data under wraps, much to the discontent of the people who actually make the shows that drive viewers to their service. While viewership data is crucial in guiding the writers behind the scenes, there’s currently no way for them to obtain that information. Tony Gilroy, the showrunner for Disney Plus’s Andor, recently told The Wrap that he doesn’t have “any idea” what the audience for the show is because he can’t access any streaming data from Disney.

“It crushes the economics of the business, it means people are being overpaid and underpaid and never properly paid,” Gilroy said. “It means that productions are overloaded with expenses up top because what used to be commonly residuals and royalties now have to be front loaded.” That means some will get paid more — or less — money upfront since residuals aren’t based on views with streaming.

While streaming, or “new media,” also played a role in the last major WGA strike in 2007, the streaming industry was still only in its infancy — and writers weren’t granted residuals at all. After a 100-day work stoppage (and some of the worst TV show episodes ever made), the WGA and AMPTP finally came to an agreement that granted writers residuals when their content is released on streaming platforms and other online services.

Better pay isn’t the only thing that writers, and now actors, are fighting for, though. Many of the issues raised by the WGA and SAG-AFTRA have to do with the way major streamers produce shows for their services. After all, streaming not only upended the way we watch content, but it also has had a huge impact on how it’s made. Things need to be made faster and cheaper. So the studios want to do things like acquire the rights to a background actor’s face. That way, they can combine that with AI to have a cheap source of background actors forever. They also want to change the way shows are scripted.

Prior to the streaming boom, writers congregated in rooms to discuss the path that a show is taking. These sessions typically spanned the 22 episodes that a show put out per season, which meant writers were often guaranteed to have employment for the majority of the year. But things have changed drastically since then.

With streaming, the length of a single season has become far more inconsistent and a lot shorter, sometimes lasting anywhere from just eight to 13 episodes. This trend led to the advent of “minirooms,” where a smaller group of writers meet separately from the production of a show.

These sessions typically span a shorter period of time, ultimately resulting in less pay, shorter gigs, and less experience for up-and-coming writers.

That lack of experience has especially hurt the writers who go on to become showrunners, or the jack-of-all-trades who manage the creative aspects of a show. The role of a showrunner also extends to on-the-fly decision-making while on set. Javier Grillo-Marxuach, a television screenwriter and producer who has worked on shows such as Lost, likens the role of a showrunner to “a CEO of a startup corporation with a $100 million budget and 200 employees.”

With the way shows are made for streaming services, writers aren’t given the training they need to take on such tremendous responsibilities. In the past, most writers got the chance to see how the entire production unfolds — a crucial element of the job. With minirooms, however, writers don’t get the opportunity to see their shows through, making it more difficult to juggle all the tasks that come along with being a showrunner.

“Writers had a very discrete path toward getting to where we could create and produce our own shows,” Grillo-Marxuach adds. “What the age of streaming has done is de-centralized all of that.”

That’s part of the reason why the WGA has proposed terms that aim to preserve the existence of the writers’ room. This means establishing a bare minimum number of writers that can work on shows before and during production, which includes at least six staff writers in pre-greenlight rooms, along with one writer per episode for up to six episodes when a show is in production, and then one extra writer for every two episodes after six.

“We’re trying to enshrine the existence of a writers’ room in our contract,” Lisa Takeuchi Cullen, a TV writer and the vice president of film, TV, and streaming at WGA East, tells The Verge. “There is no contractual obligation to hiring an actual room and to make a television show with more than one person.”

The WGA also carves out a minimum of 10 consecutive weeks of employment before a show is greenlit, and asks for at least three weeks of work per episode once the studio has started production. Additionally, the guild seeks to establish a viewership-based residual for shows on streaming services and also wants to regulate the use of AI to prevent the tools from writing or rewriting material. The AMPTP has rejected all of these proposals and refused to make a counter on any of them.

Instead, Hollywood studios are focused on their bottom line. A studio executive told Deadline that the AMPTP’s endgame is to “allow things to drag on until union members start losing their apartments and losing their houses.” Bob Iger, the CEO of Disney, recently told CNBC that the strikes are “very disturbing” to him. He went on to note that it’s not helping the industry recover from the pandemic, and says some of the writers’ and actors’ expectations are “just not realistic.”

For reference, Iger is able to earn up to $27 million per year. Variety estimates the average Hollywood writer’s salary is about $260,000, though the WGA contends that weekly pay has dropped approximately 23 percent, adjusted for inflation, since 2014 (the WGA does not release median numbers). Meanwhile, the median actors’ salary hovered around $46,000 in 2021, according to US News.

“We need some checks and balances,” Takeuchi Cullen adds. “We cannot allow the studios to continue underpaying us for products that they are making so much money off of.”

Right now, Hollywood is at a standstill. Writers haven’t been showing up to work for two months now, and actors have left their sets. Even San Diego Comic-Con, which was supposed to feature big star-studded panels, is starting to look rather empty. Both writers and actors — two major cogs that make Hollywood run — are fighting for the future of their careers and industry. Hollywood as a whole might not make it out of this battle unscathed, but it might emerge better than before.