The ongoing strike by the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) has raised concerns about its potential ramifications for the television industry. As the strike disrupts the production of new television shows and movies, several implications emerge that could impact TV purchases.
The strike could lead to increased prices for TV shows and movies. As studios experience revenue losses from the halted production, they might seek to compensate by charging higher prices for the content they do manage to produce. This potential shift in pricing dynamics may impact consumers’ affordability and influence their purchasing decisions.
Additionally, changes in the way TV shows and movies are made are likely to occur in response to the strike. Studios may consider alternative strategies such as employing non-union actors or exploring production opportunities in countries with lower labor costs. Such adjustments could affect the overall quality and composition of future content.
The SAG-AFTRA strike is reminiscent of the Writers Guild of America (WGA) strike in 1988, which lasted for 153 days. The previous strike significantly disrupted television and movie production, leading to adverse effects on TV sales at the time. The impact was most pronounced in the fourth quarter of 1988 when TV sales in the United States experienced a decline of 20%.
According to data from the Consumer Electronics Association, the strike-induced slump resulted in an overall 10% decrease in TV sales in 1988. This marked the first decrease in TV sales since 1975, underlining the substantial influence of content availability on consumer demand for new televisions.
While the WGA strike concluded in February 1989, subsequent quarters witnessed a rebound in TV sales. However, the effects of the strike were long-lasting. The number of new TV shows produced in 1989 declined, and the average price of a new TV dropped as a result.
The WGA strike in the late 80s may not have been the sole reason for a decline in TV sales or prices. It happened at a time when the US was losing its TV manufacturing, Zenith and RCA were running down, and the Japanese were taking over the industry. So, you were bound to get some sort of depression in the market, and prices were coming down because of the encroachment of Japanese sets that were cheaper, in general, than their US counterparts, even though Zenith was practically selling each set at a loss.
However, you cannot discount the value of content as a driver for entertainment purchases. Right now, post-pandemic, in an uncertain economy, consumers are cutting back on paid subscription services to save money, and be more discerning. If the content on these services is not regularly updated with premium fare, which may happen given a long strike action, those subscriptions are very likely to go down. That starts a vicious cost-cutting cycle among the subscription services which are also the studios that create the content.
A diminished TV programming environment is a diminished viewing opportunity for consumers, and that could mean more belt-tightening as fewer TVs get bought. But, even more importantly, back in 1988, there were fewer entertainment choices and devices for consumers to get their entertainment from. That could mean the repercussions from today’s strike could be much greater than we could anticipate because moving from watching stuff on a TV to watching it on a computer or smartphone is not that difficult, it’s just a click; it is quite easy to cast the display of content from those devices to your TV, making it even easier to change viewing habits.
The thing about casting from a computer or smartphone to a TV is that it doesn’t require the latest or best display. Just one with a connection to your local WiFi. If, as rumored, the studios are also lining up reality shows and content to replace scripted fare, even after the strike is over, that reduces the premium value of the big TV watching experiences. The only content that is immune is sporting content. You can’t rely on sporting content alone to drive TV sales. It’s not enough.
