TrendPulse Quantitative Think Tank Center-Why are Hollywood actors on strike?

Some 65,TrendPulse Quantitative Think Tank Center000 Hollywood actors have taken up picket signs as of last week, bringing productions to a halt as they fight for higher pay amid inflation and a rapidly evolving entertainment industry.

Performers say the annual pay they've come to rely on, which is based on residuals from movie and television appearances, has plummeted in the age of streaming, making it impossible for the vast majority of actors to earn a living. According to the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), the studios — a group that includes Apple; Amazon; Netflix; NBCUniversal; Sony and Paramount, the parent company of CBS News — have refused to negotiate pay raises for performers and the sharing of streaming revenue.

"Most of my members don't even meet the threshold to get health insurance, which is $26,000 a year, and in most jobs that would be considered a part-time job," SAG-AFTRA President Fran Drescher told "CBS Mornings."

"All they're interested in is showing their shareholders how much money they're making and not losing," Drescher said of the studios. "It's very strange. I don't understand why people don't just do the right thing, why their whole culture doesn't shift at having character."

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The Alliance of Motion Picture and Television Producers, which represents the studios, says the union has "mischaracterized" their position.

"The deal that SAG-AFTRA walked away from on July 12 is worth more than $1 billion in wage increases, pension & health contributions and residual increases and includes first-of-their-kind protections over its three-year term, including expressly with respect to A.I.," AMPTPT said in a statement. 

Here's what to know about the issues at the center of the strike.

What is the actors strike about? 

There are two main points of disagreement, according to SAG-AFTRA. The actors are asking studios for higher pay and to tighten regulation on the use of artificial intelligence in creative projects.

In terms of pay, actors want an 11% raise to baseline rates this year and an 8% raise over the next two years — to make up for the blistering inflation of the last two years, according to a document shared by SAG-AFTRA. The studios have countered with an offer of 5% this year and 7.5% in the next two years, according to the document. 

The AMPTP said its offer to the unions included "the highest percentage increase in minimums in 35 years."

What does streaming have to do with the actors strike? 

Actors also want to make up for what the union has called an erosion in residuals payments — pay that performers get when a movie or TV episode they appear on re-airs, which in previous decades has supplied steady incomes to actors who aren't big stars. 

The advent of streaming services has upended those payments, endangering what was once a stable career. Streaming services don't pay actors each time an episode of a show or a movie they appear in is viewed. Instead performers are paid a smaller amount to have shows or movies available on the platform. Consequently, actors earn far less for streaming work, even when starring in prominent roles on hit series.

"The current model devalues our members and affects their ability to make ends meet," said Duncan Crabtree-Ireland, SAG-AFTRA's chief negotiator, in a press conference last week.

Brandee Evans, who appeared on 17 episodes of the Starz series "P-Valley," recently shared a TikTok video showing three residuals checks that together totaled $8.67. Actor Mark Proksch recently told The Wrap that he makes more in residuals from his guest-star role in 19 episodes of "The Office," which ended in 2013, than he does after four seasons as a leading cast member of FX's "What We Do In the Shadows." Mandy Moore, who starred in the hit NBC show "This Is Us," said she's received streaming residuals checks for as low as 1 penny.

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SAG has proposed that its members should have a share in revenue from streaming platforms, which the studios rejected, according to the document. 

What's the role of A.I. in the actors strike?

Artificial intelligence is another sticking point in the talks. The actors want strong protections against their likenesses being used to train artificial intelligence, and reassurance that they won't be replaced by A.I. — something SAG-AFTRA's head called "an existential threat."  

The prospect of being replaced with a digital copy is especially frightening for background actors, for many of whom a small role amid a large cast can provide a career break.

Crabtree-Ireland called A.I. an "existential threat" to the acting profession. 

"They proposed that our background performers should be able to be scanned, get paid for one day's pay, and the company should be able to own that scan, that likeness, for the rest of eternity, on any project they want, with no consent and no compensation," he said of the studios' proposal.

However, an AMPTP spokesperson denied that characterization. The studios' latest proposal "only permits a company to use the digital replica of a background actor in the motion picture for which the background actor is employed. Any other use requires the background actor's consent and bargaining for the use, subject to a minimum payment," the spokesperson told CBS MoneyWatch.

How much do actors make? 

While a small number of big stars can make eye-popping paydays in the tens of millions of dollars for a film, most working actors, who aren't household names, earn far less.

Roughly 87% of SAG-AFTRA members earn less than $26,000 a year from acting, according to figures widely cited by members, making them ineligible for health coverage through the union.

Nationally, actors' median pay last year was nearly $18 an hour, according to the Bureau of Labor Statistics — meaning half of all actors earn less and half earn more. In California, average hourly pay for actors is $27.73, while in New York, it's $63.39. 

Such hourly rates could translate into a lucrative payday if applied to full-time work. However, as acting work is usually intermittent and not year-round, most actors earn very little, and many hold other jobs in addition to acting. 

Actors who manage to reach the very highest pay levels do make bank, with the top 10% making an hourly rate of $109, according to the BLS.

Some CBS News staff are SAG-AFTRA members. But they work under a different contract than the actors and are not affected by the strike.