Hollywood Writers Return to Work, Secure New Contract with AI Protections

Resolution of Writers Strike and Introduction of New Contract

Hollywood writers are set to recommence work following the approval of a new contract by their unions’ governing boards with prominent studios. The strike, which spanned close to five months, still awaits validation from the writers in early October. However, the new agreement enables them to work during this period. The late-night talk shows are expected to restart production immediately, but scripted episodes and films are likely to lag behind due to the ongoing Screen Actors Guild strike. Post-ratification of its agreement by the Writers Guild of America, similar negotiations are expected.

Content and Benefits of the New Contract

The new contract offers several benefits to the writers, including salary increases, bonuses for high-performing shows, and guarantees for a minimum number of staff. One significant provision enables the writers to partake in the success of high-performing content on streaming platforms like Netflix (NFLX). They will receive a residual payment based on viewership, determined by the number of hours streamed and runtime. The financial burden of the strike was reported to be billions of dollars, leading to a 20%-45% drop in the market values of Disney (DIS), Paramount (PARA), and Warner Bros. Discovery (WBD) since early May. NBCUniversal (CMCSA) was the only major studio to resist this trend.

Protections against Artificial Intelligence Usage

The strike was primarily motivated by the need to secure safeguards against the exploitation of artificial intelligence (AI). The new contract, effective till May 2026, allows writers to use AI only with the consent of their production partners and restricts compulsory usage or integration of AI-generated content, which requires disclaimers. AI-generated narratives won’t be deemed “literary material,” preventing computers from receiving screen credits or related rights. Nevertheless, the clause about using writers’ content for AI training sparked controversies.

Concerns and Expectations from the New Contract

Despite the contract’s promising content, concerns remain over its efficacy in protecting writers from AI. According to media mogul Barry Diller, the former CEO of Paramount Pictures and founder of Fox Broadcasting Company, “They spent months trying to craft words to protect writers from AI and they ended up with a paragraph that protected nothing from no one“. Diller added, “Fair use needs to be redefined, because what they have done is sucked up everything and that violates the basis of the copyright law. All we want to do is establish that there is no such thing as fair use for AI, which gives us standing.