Writers Guild of America has threatened strike action if major studios or networks do not agree to a new agreement by midnight on Tuesday. The key issues are writers’ compensation, and the profits generated from streaming. The WGA claims that salaries have stagnated or decreased in recent years and that it’s becoming difficult to make a living. Meanwhile, studios claim they are under economic pressures to cut costs. Another controversial issue is the formula used to calculate residuals on streaming shows. Writers receive only a fixed payout each year, even if they create a hit. In the past residuals for reruns on television or DVD sales were a percentage or a fixed fee.

A strike could cause major delays in the release of television shows and movies planned for later this year or beyond. Hollywood writers stopped working for 100 days during the last strike, which cost the entertainment industry $2 billion. Both sides may reach a deal at the last minute or extend discussions temporarily, but picket line preparations have already started. Other Hollywood unions such as SAG-AFTRA, which represents actors, and DGA, which represents directors, have expressed solidarity with the writers and are currently holding their own negotiations with studios.

WGA’s action is part of a broader trend in labor activism within the entertainment industry. Other unions are also calling for better wages, benefits, and job security. Workers say that the success of streaming led to an abundance of content, and record profits, for companies such as Disney and Netflix. However, they do not feel like these gains are being fairly shared. Studio executives claim they face economic pressures. Critics say that they have increased executive salaries while treating writers, directors and other creatives like disposable labor. The WGA strike could disrupt an entertainment industry already struggling to cope with the pandemic. It may also have a negative impact on other industries such as advertising and book publishing that depend on the entertainment industry for revenue.