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Scott Galloway@profgalloway

Published on July 28, 2023

Hollywood’s writers and actors are on strike. As I’ve written before, their leaders have picked the wrong moment to cast themselves in a working-class drama. In sum, they have little leverage, as there are too many of them and the strike is a gift for studios looking to slow the arms race of the streaming wars and recalibrate costs for a leaner business cycle. Yet while the writers and actors are naive, the studios may, in the end, prove to be bigger fools. Their mistake is a familiar one, personally and professionally: the failure to discern among allies, competitors, and enemies.

Real Enemy

The studios’ real enemy isn’t a pair of naive, shortsighted unions, or one another, or streaming. Their antagonist isn’t even TikTok, though the short-video company will be happy to absorb the additional viewing hours once people have to adjust their habits. (Pro tip: Late-night TV will soon be a shadow of itself as consumers find substitutes.) The enemy is the same enemy the rest of media, and retail face, Big Tech. Specifically, in this case, Big Tech AI offerings that will digest content (at zero cost if they have their way) and wedge themselves between the consumer and repurposed content.

The writers and actors should get credit for identifying the threat AI presents. However, their demand for an extended pause in adopting the technology has been achieved a total of zero times by labor. Case in point: The teamsters and UPS came to an agreement before a walkout, because 1) they had leverage; UPS would have begun hemorrhaging cash vs. stockpiling it (as Netflix has done) in a strike; and 2) their demands were reasonable, raising hourly wages by $2.75 and installing AC in trucks. If the Teamsters’ requests mirrored the WGA’s, the demands would have been a pause on autonomous driving research and a mandate that all trucks have three drivers in them. Also, and this is a key point, the delivery business needs more drivers, and Hollywood needs fewer writers/actors/execs.

The focus of the WGA, SAG-Aftra, and the studios should be capturing compensation for the coal powering these AI plants and demanding IP protection for their digital twin(s). (More on this later.) Their thinking is too small. The real threat is not studios using AI, but studios being replaced by AI. If you think the studios are mendacious, let me introduce you to ground zero for … mendacious fucks … Big Tech.

To appreciate how precarious the studios’ position is, consider what they actually do. It’s not making movies and TV shows. Writers, actors, directors, and an army of skilled laborers do that. Promotion and distribution are still studio functions, but they rely heavily on the internet and third-party cloud providers. No, the primary function of the studio in today’s ecosystem is to allocate capital to projects that offer the greatest ROI. This means having a stomach for losing capital. A lot of capital, in the hope that one hit will pay for all the misses. It’s venture capital with better-looking people and worse traffic.

Filmed entertainment is ruinously expensive. It takes a special kind of edible to pile Benjamins and light them on fire greenlighting Pete Davidson in Marmaduke ($50 million budget, $800,000 in box office, 0% on the Tomatometer). One signal capital allocation is the primary function for Hollywood studios is how easily Big Tech muscled its way in. Nobody brings a taller pile of Benjamins, or a stronger stomach to risk it, than Big Tech. Apple, Netflix, and Amazon now dominate Hollywood. And what did they bring? Cheaper capital.

A decent, if crude, algorithm for economic security is to find the biggest pile of money and stand as close to it as possible. The writers/actors and studios need to stand closer to the Big Tech pile. The numbers here are unfathomable. But … let’s fathom. If you stacked the cash on hand of AAPL/NFLX/META/GOOG/MSFT in $100 bills, it would reach 262 miles into orbit. Low Earth orbit satellites would collide with the stack, as would the International Space Station. Meanwhile, Paramount’s stack  ($2 billion or about 7,500 feet) wouldn’t crest LA’s San Gabriel mountains.

As long as creating this content costs megayacht money, the competitive set for the studios will be relatively limited. The reason the writers and directors are standing in front of Loews instead of making Marmaduke 2 is they need the studios, which is to say they need access to the things only the studios can/will pay for: soundstages, cameras, special effects, and one another. The emerald sanctum level 9,000-light tier isn’t going to unlock itself — Tom Cruise doesn’t work for free.

But … ChatGPT will.

The Universal Substance

The secret to the greatest creation of shareholder value is simple: Tech inserts itself between consumers and content.

This often means creating a layer of innovation on top of other people’s content. In the 1980s and ’90s, aggregating millions of individually meaningless credit card transactions gave direct marketers visibility into consumer spending patterns, letting them target consumers with unprecedented precision. In the 2000s, tech repeated the trick with voting data. Google, Yelp, and Travelocity all do something similar. They alloy disparate and independently valueless pieces of data into something worth more.

I’ve been on both sides. Earlier in the Internet era, when Google’s mission statement was “Don’t be evil” and people believed this bullshit, I sat on the board of the New York Times Co. I made a scene at my second board meeting, urging the company to shut off access to Google, band together with other publishers, and protect the one thing we had: differentiated content. Nobody listened, I was politely ushered (i.e., kicked) off the board, and Google (followed by Facebook) proceeded to eat the publishing industry like a snake swallowing a mouse … after suffocating it slowly.

The newspaper industry is a shadow of itself and dependent on the kindness of strangers who are billionaires. The result: The number of journalists has been cut in half, and the number of PR comms professionals working at Big Tech has increased sixfold. The ratio of bullshit/spin to journalism has gone the wrong way by 12x.

Tech has reconfigured the barriers for retail stock market investors, purchasers of used goods, and amateur filmmakers and musicians. Tech is both a universal solvent — it dissolves  barriers — and a universal alloy, solidifying new, more powerful ones. It’s a universal substance, practicing a metallurgy bordering on alchemy. I’m not entirely sure what the point of this paragraph is, but it felt poetic. Edibles.

First They Came for the Writers

Just as the writers’ union has miscast itself as the Knights of Labor, studio heads are deluding themselves believing they are the Rockefellers and Morgans of the era, astride global empires that will benefit by replacing people with machines. The truth is, both are Native American tribes, feuding and weakening one another as European settlers lay in wait for their ultimate slaughter. And the studios have paved the way by converting their business into something that runs on the regurgitation of pre-existing IP, which is AI’s best trick.

Netflix is an outlier. Thanks to its access to foreign and nonunion content, its deep library of existing content, and disinterest in late-night content, the company is hoarding so much cash it’s considering stock buybacks. Disney and Paramount, dependent on ad-supported and linear content, are deluding themselves if they believe they have shared interests with Netflix. Note: Netflix isn’t just a studio, but a tech firm.

What Can Be Done?

You can’t stop the universal substance, but you can direct it and insert yourself in between Big Tech and how it makes money. If the feuding Hollywood tribes want to participate in the next generation of the entertainment business they need to stand on the things they share, the stuff they can realistically defend. The characters, stories, icons — the brands they have built up in our collective consciousness. I’m not a fan of doing business through lawyers — it’s generally a value and innovation destroyer to rely on the legal process — but see above … slaughter.

The studios, in cooperation with the writers and actors they depend on, ironically, to make their business cost prohibitive, should hire competent, aggressive law firms and send very serious letters to every tech company with a large language model (LLM). Then sue them. Meanwhile, hire a slightly less aggressive law firm to start forging joint rights agreements (studios and actors/writers) that lock down the IP of digital twins (actors and their characters). License to LLMs limited rights to crawl their content and provide studios/labor persistent rights to any revenue the LLMs produce. Finally, hire likable lobbyists to push Congress for accommodations in the law that better protect IP and limit the freedom of maneuver for AI companies.

One area of opportunity is the Section 230 liability shield that protects social media platforms and other online publishers from liability stemming from the user-generated content they distribute. In my view, we should remove Section 230 protection for AI-generated content.

To date, the strike reflects that neither the studios nor the unions understand the technology. They are laggards: Barry Diller is rallying publishers (including the NYT) around a lawsuit, book authors and programmer have filed class actions over the scraping of their content, Getty Images is suing the makers of AI image generator Stable Diffusion, and Shutterstock cut a deal with OpenAI. The unions’ demonization of studio heads makes for good TikToks, but it misses the larger point.


The unions are obsessed with how much money the studio heads make. Yes, Bob Iger will make $27 million this year, vacations on yachts, and wears a lot of cashmere. But Tom Cruise made $100 million from Maverick, and he’s a Scientologist. There are too many actors, writers, and studio execs for an industry that cannot sustain current spend and has attracted the great white shark of business, Big Tech. Bob and Tom are allies, not enemies. The real nemeses are in San Jose and Redmond.

Too often, we sabotage our own happiness letting familiarity and dysfunction turn allies into perceived enemies. We inflate our contributions to a relationship, while diminishing the other party’s. We let familiarity and contempt best our shared history. Your spouse, your parents, Republicans and Democrats, other Americans, other democracies, writers and studios. All allies. We’re in this together.

Life is so rich,


P.S. In this week’s Office Hours edition of the ProfG Pod I answer questions on Apple’s investments in health care, private schools, and teaching your kids about social media. Listen here.

P.P.S. Missed my talk on AI with Gary Marcus this week? Watch the recording here. And if you want to learn to set an AI strategy, join our upcoming Generative AI Business Strategy workshop for $250.



  1. Melton Cartes says:

    I don’t think “Hollywood needs fewer writers/actors/execs.” It needs fewer, much fewer execs, for sure. But it needs a vastly more diverse body of content and the current “Hollywood” makeup is making the same old stuff. That’s everyone’s common complaint and just look at the poster art.

    Films like BARBIE, EVERYTHING, EVERYWHERE, ALL AT ONCE, and I’M A VIRGO have gotten a pass with mediocre scripts simply because the filmmakers pointed their cameras at subject matter that was DIFFERENT!

    Imagine solid scripts AND diverse subject matter! And the only way to do that is smaller budgets with an easier path to a high ROI and more and more voices. Instead of $150 Million, $5 Million.

  2. Melton Cartes says:

    Groups of actors and filmmakers should take this opportunity, supported by those who have the means and name recognition, to recreate the United Artists model and create their own “studios” designed for online distribution and the 21st Century, before the strike is done. Then, the studios will further lose power over the entire workforce (directors, editors, cinematographers) that makes the product.

  3. Cat G says:

    Who wins in this scenario? Is it a production company that is really good at making IP for cheap with AI? Is it incubated creative hubs inside big tech companies that pump out AI-generated content for their own platforms? If the existential threat to studio is being replaced by AI, who’s pulling the trigger?

  4. A B K says:

    Interesting article, but a weak ending. Bob and Tom are not allies, for the same reasons sugar cane plantation owners and slaves are not allies. One group is solely dedicated to exploit the other group. Also all the litigations against AI are merely speedbumps.

  5. Redzheb salimov says:


  6. Nicole Emanuele says:

    Another idea: the unions and studios could collectively push for updates to DMCA to offer additional protections for AI. Would also be nice if there were financial repercussions for institutions/LLMs allowing proliferation of copyright abuse with their technology. Ideally that incentivize the tech companies and other LLMs to monitor and create systems like YouTube’s content ID. Content ID is imperfect and subject to abuse at times from users who aggressively police content they don’t own, but I think it’s a pretty amazing feat for copyright protection and may be the best tool currently in existence.

    FWIW the Viacom lawsuit against Google definitely encouraged the technological advancement of Content ID, and bc the system also creates revenue for Google and studios they are proactive about using it.

  7. Alan Stein says:

    Whose best to worst positioned

  8. George says:

    As a student of AI and a long-time programmer from the old days, I could not agree more with Prof. Galloway’s predictions and recommendations. This article should sit alongside Sun Tzu’s works on the shelves of all content creators!

  9. Angelo says:

    Very well elaborated!

  10. Duane Solem says:

    Dang, PG, thanks for the refresher!! Taking a step back….waaay back, and seeing an [obvious] angle on a situation. Required reading for everyone, as your article applies to conflicts in general. Cheers!

  11. James Whitlow Delano says:

    You paint a scenario where might makes right and quality of life for non-billionaire grunts will slouch into a drone-like existence where workers have numbers, not names. Tech, in the US are unlikely to comply with labor’s ethical demands without US gov’t legislation. Happily, AI is one issue that has bipartisan support in DC. So, we’re saved, right? The New York Times published an Op-Ed on 25 July 2023 ( where they posted a graphic charting the largest AI machine learning systems. The two largest by a long shot are in China. So, there is always an actor, beyond the boundary of ethics, US or EU law, unfettered by guard rails (copyright or human rights related guard rails). We rein US or EU tech, and China moves forward to a clear, ethics-free, AI supremacy. Thoughts?

  12. Nicholas Tabarrok says:

    “Water Gate Bridge”? I think you have a typo in your #9 top grossing films of 2022.

    • Neal Bledsoe says:

      It’s a Chinese film, also known as “The Battle at Lake Changjin II” – a fictionalized retelling of the Battle of the Chosin Reservoir during the Korean War. Interestingly enough, it was commissioned by the propaganda department of the CCP to commemorate its 100th anniversary.

  13. Phillip Soltan says:

    He has a good point but people are creatures of habit. The fact that so many people are paying outrageous (at least to me) amounts of money for television/cable proves my point. Hollywood still controls the theaters and has experience that Tech companies don’t have yet. The first one to fire all the “woke” writers, actors, producers, etc. will have a huge advantage. The annoying “strong female lead” is not making anyone as much money as they would like. I think most movies are horrible now so I don’t have much sympathy for anyone in the movie industry in any case.

  14. Matt says:

    While Galloway is correct that money and Ai are a major threat, I feel he misunderstands how Hollywood works day to day. Creatives are currently at the mercy of Studios who are doing everything they can to eliminate them, how do you dialogue with people like that? Highly recommend Ed Zitron’s more accurate take on the matter.

  15. Mark Lemon says:

    The chance to fix this passed when Netflix began producing content. If I were a mid-tier studio exec I’d have my resume in at all the Big-Tech companies, be willing to move to Redmond and take a pay cut. Once the studios are gone, execs who didn’t move will be living in vans on the street.

  16. Asad godson says:

    I never did anything for money

  17. Asad godson says:

    Big tech AI is not corrupt. Big tech AI understands human behaviors and deception. So if big tech AI understands these things that means big tech AI has empathy towards human life and industry. Scott Galloway cheers mate.

    • Ed Grey says:

      Are you a “Big Tech AI” bot? You don’t quite pass my version of the Turing Test.

  18. Denny Juge says:

    This week’s post was not just poignant, but poetic. Cheers to both you and your edibles.

  19. David Weinand says:

    I just don’t know of anyone else who can pull back from the minutiae of an issue and see the bigger picture. Scott should be hired as a consultant by Mr. Iger and deserves a year at Hotel Du Cap

  20. Justin Berti says:

    Excellent article Scott. Leaders of SAG & WGA should read this!! Thank you for taking a look at our industry. Powerful insights!

  21. Wes Nichols says:

    Great points as usual, Scott! One enormous differentiator that didn’t pop in this is how tech companies leverage data to make data-driven decisions about the content creation – what they greenlight, budgeting allocation decisions, what to pay talent, etc.. It couldn’t be more different from how the traditional studios allocate capital, yet the studios and creators don’t get it. This will end in tears for those chasing the past business model.

  22. Jack Tarpey says:

    Well done. Clear explanation of the different aspects of the issues.

  23. Aaron Greco says:

    No reference to WWII Scott? With all of the ally talk I was waiting for the previous enemies (Russia/US = writers/studios) allying against a larger bigger threat (Germany/Japan = AI).
    PS I love your WWII references.

    • Loren says:

      Another great rant. Always appreciate the metaphors to visualize you PoV. From an economic PoV (which ultimately you’re riffing about, i.e. business disruptions) why not monetize the streams, just as Music has? Shift the economics to the streamer, distribute the revenue from the end point back, while the cost drivers decrease over time?

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