ahalpert
Major Contributor
Yeah, it's really sad what happened to the high tech industry. There are no internet companies anymore.That's right. Due to the streamer's financial losses, there is a significant decline in production, which starting before the strike. The strike and it's resulting contract had nothing to do with that. But, if a company is losing money and needs to cut production expenses and someone says "It's going to cost you 14% more to use us", well, that's 14% they can't afford. So what do they do?
No, I haven't read anything about the consequences of the new contract. But each bite into the profit/loss statement has the same effect: a need to find ways to reduce costs or improve revenue. Revenue is not improving, so reduce the number of productions and lower the cost of production by not hiring stars, doing less lavish productions, sending more work overseas.
Any increases in cost of production by a new IATSE agreement won't help the situation. The high-flying days of endless money to ramp up streaming company's shot at making this a business is over. Like any bubble, when it bursts, it is very painful.
I went through the same thing in the dot-com bubble. Money was flowing like crazy. Huge bonuses, lavish parties, people jumping ship to go to start-ups hoping to get rich. And then the bubble burst and it burst quickly. I'd say half the people I knew, who had careers in technology all their lives, had to find a new way to make a living. Easily 40% of the jobs went offshore. Just like this, people lost houses, moved to other states, took jobs at Home Depot to make ends meet. It was ugly.
It's a 14% raise on one component of production. A smaller overall increase on production costs. And that's just for writing. They could offshore the writing to India (lol) and keep the production in the US and dodge that cost.
But the bigger question is if they can offshore to begin with. And you think a marginal cost increase will change that calculus? If they can, they will. If they can't (and they certainly can't for everything) then they'll pay.
I think the bigger issue is they're not willing to maintain huge losses anymore. And I'm guessing that the huge increase in the cost of debt flipped a switch in the industry that may have otherwise been flipped later or not for everyone all at once.
But inasmuch as there was a glut of production before that was never going to last, there was always going to be a contraction in the industry. The only question was how big and when.
Whatever happens with IATSE rates will have a marginal impact on production either way.




