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For those who believe that the stock market is the best measure of the health of any industry, it is clear that Writers Guild of America The nationwide strike has hit the entertainment industry hard. That’s because, while we’re only on the second day of the strike, the US entertainment industry has lost more than $10 billion in stock value. However, while the numbers may seem optimistic to those who support the strike — including this author — caution is advised as the stock market is a volatile beast.
WGA begins strike on Tuesday, May 2 after union proposes fair wages and decent working conditions for entertainment writers Blatantly ignored by the Union of Film and Television Producers, the organization representing Hollywood’s largest studios. therefore, Several companies have stopped producing TV series, in the long run, this may affect the release of new content through different platforms. Yesterday, May 3rd, we managed to see the first economic results of the WGA strike, with several entertainment company shares falling and brands like Paramount Global, Comcast and AMC Networks losing $10 billion. However, shares of companies such as Netflix, Disney, and Warner Bros. Discovery held steady or rose slightly.
What do recent entertainment stock losses mean for the WGA strike?
The stock market is more complicated than it might appear at first glance, and while a potential loss of $10 billion sounds cause for celebration, the move must be watched with caution. First, the overall stock market closed lower yesterday (May 3), which may partly explain the negative results for entertainment companies. Also, a falling stock price doesn’t mean a company is losing money. It just means that the people who own those shares are holding shares that are worth less than they used to be, and if they sell them, they could lose some cash. Of course, a devaluation of a company’s stock is still a bad sign in the long run, as investors get scared and stop investing in these companies. Still, it’s too early to tell how the WGA strike will change the financial aspects of the entertainment industry.
It’s also important to note that the companies with the most competitive streaming services on the market are less affected by the WGA strike and may even profit from it. That’s because, since streamers can also offer their platforms international content and old libraries, they can remain a good source of entertainment even when new episodes of our favorite series stop premiering on TV. The 2020 pandemic has shown the strength of streamers in the face of adversity, and the WGA strike may actually help this new business model.
Still, that doesn’t mean there’s no hope for American writers. all over the world, Many artists have supported the strike. Since Concerns about AI tools being misused by producers Not specific to the US, the world is watching to see what happens with the WGA strike. Therefore, the WGA strike may prompt other syndicates and job associations from different corners of the world to join the fight as well. That would be for the best, since what happens in Hollywood tends to affect the global entertainment industry.
Stay tuned for updates on strikers taking to the picket line this week. Check out WGA’s informational video on strike authorization.
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