Media Localizers Hit as Hollywood Actors Go on Strike

1. Media Localizers Hit as Hollywood Actors Go on Strike A strike in Tinseltown is bringing film and television production to a grinding halt. On July 14, 2023, the Screen Actors Guild joined 11,000 film and television writers in their ongoing strike over contract negotiations with the Alliance of Motion Picture and Television Producers. Among the actors’ goals in their June 2023 negotiations with AMPTP were improved wages, working conditions, pension benefits, and guardrails regarding the use of AI in future TV and movie productions.

2. More specifically, performers fear that malicious use of AI, including AI-enabled dubbing, might make them appear to say or do something without their knowledge or consent. The Writers Guild of America, on strike since May 2023, has also expressed concerns about the use of AI in scriptwriting. Actors rejected a proposal by AMPTP suggesting that a performer be paid the equivalent of one day’s work to be “scanned,” with the production company then owning the likeness indefinitely, for use without further consent from, or compensation for, the performer. Even before an estimated 160,000 performers walked off the job, Netflix, Warner Bros. and Disney were among some of the companies to have already postponed film production. Ripple Effect Now, the ripple effect is being felt in the media localization industry. In a July 14, 2023, trading update UK-based media localizer ZOO Digital attributed lower-than-expected revenues in part to the strike and its “impact on the levels of localisation and media services work on new titles.” The update wiped about a third off of ZOO’s stock price. ZOO, whose clients include Disney, NBCUniversal, HBO, and Paramount Global, reportedly “has frameworks in place with all major Hollywood studios and streaming services.” The company also became a key localization vendor for an unnamed “major Hollywood studio” in February 2023. Compounding the impact for ZOO specifically was that its auditor, Grant Thornton, pointed out that the company was not properly accounting for suppliers’ invoices, a situation that will take USD 1.2m off its operating earnings, according to an article by The Times. Prior to the strike, ZOO Digital was the top-performing publicly traded LSP in 2022. As of May 2023, ZOO had raised USD 15.5m in share planning to finance the acquisition of a Japanese subtitling and dubbing provider — a deal that is, according to the trading update, still in the works, with ZOO “financially strong with net cash of USD 23m.”

3. ZOO reassured investors that “despite the short term industry-wide uncertainty […], ZOO expects to be in an even stronger position with several customers following a rationalisation of their supplier bases with ZOO selected as one of a smaller number of vendors”. The demand disruption caused by the strikes is likely to also slow down business at ZOO’s competitors such as Iyuno, VSI, Visual Data, and TransPerfect.