“The WGA and SAG/AFTRA strike is about more than the particulars of how the so-called creative class gets paid. It’s really about whether or not there can be a creative class at all.

“My working assumption is that within 20 years, if not much sooner, A.I. will be able to write, direct and act (via computer-generated images that are indistinguishable from real people) movies and TV shows. It will write credible novels and news stories and opinion columns and compose film scores and pop music. It will mean a growing number of creative endeavors will no longer easily find meaningful vocational outlets. It will amount to a kind of material degradation of human civilization that may prove irreversible.” — N.Y. Times columnist Bret Stephens, posted on 7.24.23.

From an Ankler post titled “‘Idiots’: Wall Street Analysts Unload on Hollywood,” written by Claire Atkinson:

Despite criticisms from Hollywood leaders about poor timing of the strikes, some Wall Street analysts see the wisdom of a fast settlement.

Michael Pachter, research analyst at Wedbush Securities, is more pointed: “The market thinks all of the corporate bosses are idiots, and generally sides with the unions.”

He adds: “Higher pay might be difficult to endorse, but protections for residual uses of content and against AI make perfect sense to most people, and the media companies are intransigent and unapologetic.”

Indeed, it’s hard to find anyone on the analyst side feeling warm and fuzzy toward Hollywood right now.

“Investors were down on the media sector before the strikes and this hasn’t helped,” says James Dix, a former Wedbush analyst now covering the TMT sector with CryptoOracle, a New York-based investment advisory.

“I think investors are thinking about it in terms of what issues it raises; the implications of those issues from subscription growth and retention of new shows. The fact that [share] prices are down indicates concerns about the overall model. Cord cutting has come to streaming.”

He says investors are taking a moment to stand back and crystalize where things stand, weighing a much broader set of topics beyond the strikes, such as the impact of AI, and how the rapidly accelerating new technology will affect such things as time spent watching entertainment or interacting on social media.