Hollywood writers are on strike because they're rightfully afraid that the networks will launch "InterNetworks" off their backs and re-use TV content online without offering the writers an extra cut of the revenues.
This is my strategic theory: After the networks find critical-mass in market share, they will cut out the Writers Guild and rely on non-union writers or user-generated stories and shows. It's a classic strategy in which you first find differentiation to brand your channel and then change to low-cost content providers to boost margins.
So if the networks succeed online, of course they'll launch shoot-off channels online filled with network content. But here's where it gets interesting: After these channels are established, they'll blow off anything that costs money and go for the lowest-cost programming available: reality TV and UGC.
So, what's the brouhaha over digital distribution royalties? The Writers Guild is also petrified that the Internet will do the same thing to them that it did to musicians when people started downloading music for free from file-sharing networks. Think about it -- if you're a writer for a TV show and all of a sudden your half hour gets knocked off by some schmo on YouTube, what's a Hollywood writer to do? Call your lawyer, who calls NBC Universal (which is also worried about its content being reappropriated online), who then calls You Tube? Bottom line: The union just wants to stake its turf out now before it's too late.
Michael Eisner called the strike stupid. (Maybe if his shop was union he'd be singing a different tune.) But he nailed it when he said that the studios have nothing to give the writers for Internet content because there's nothing to give them. A source tells me that during the secret Sunday night meeting between the studios and the WGA, the writers were willing to give up their DVD rights if they got the Internet content rights they wanted. The studios said, "No deal." And that's when the writers went to the picket lines.
And so I ask, who is going to download TV shows to watch at home, when you can record the program or use video on demand to watch it when you're already in your living room?
Hollywood writers, forget about it. You're holding out for a piece of nothing.
This may be a bit late but here is my 2 cents on this article and it's argument.
One, in response to this: "But he nailed it when he said that the studios have nothing to give the writers for Internet content because there's nothing to give them. A source tells me that during the secret Sunday night meeting between the studios and the WGA, the writers were willing to give up their DVD rights if they got the Internet content rights they wanted."
-What does the internet content rights entail? There has to be some weight as in money that will be pushed around, as in selling TV shows in quality format to video distribution sites right? Those pixelated recordings of shows recorded for free just don't cut it sometimes. Why do the studios have nothing to give to the writers? Seems like they just want to hold out...?
Two, in response to "And so I ask, who is going to download TV shows to watch at home, when you can record the program or use video on demand to watch it when you're already in your living room?"
-Me! I can't afford video on demand right now in my life on my salary as a single woman. And I have never gotten in the habit of recording my favorite TV shows because I don't have any. But if something sparks my interest I may just want to download it...in my living room.
I'm glad to heat your take on this because that's what I've been hearing. Also there is a bit of a power strugal within the union since they absorbed the other one (sorry I forget the name) a while back.
I think, analytically, that the situation can only be framed in the short term. Network economics have more to do with politics than horse-sense.. and you have two politically charges Hollywood factions warring. that never makes for good business. What this situation lacks is a leader. There is no Wasserman, No Eisner. It's rumored Bill Clinton may step in to work it out. It's hard for writers to negotiate with corporate entities, flanks of lawyers and financiers. Their needs, and their culture demands, a leader who can sell creative pople security - without that, THEN INSIST ON THE MONEY.
Irony of this is, in counter point to your post - in the old days, the producers owned most of their shows - now, they work for the networks, who own the shows.. desilu, still owns lucy - ABC owns desperate housewives.. Bottom line - being a writer has been commoditized, as is acting - there's so much supply side talent now that 'being a writer' or as a lot of guys are going to be 'former writers' is great experience for little else THAT PAYS THAT MUCH... they should settle and accept without delay - if they want to save anything
Although I don't see much for them to worry about at this time, I guess they should be looking to the future...just in case. All one has to do is look at the sydnicated shows from the 50's and 60's where they may be on all over the place, but those involved are not reaping the benefits, as there was no such contract at the time. Only those who were thinking ahead to what might be, had the foresight to protect themselves.
True, people probably didn't think we'd be still watching some of these programs 50 years later, but looking at that now, why wouldn't someone want to protect their work, just in case.
Watching 40 and 50 year old reruns, and having them more popular as ever, just goes to show that you never know.
There certainly are legitimate economic issues to resolve regarding new media formats and distribution channels. The print world went through a similar sort of process during the first Internet bubble, when content creators (writers and graphic artists) pressed for additional compensation when their work was ported from print to the Internet by the major publishing houses. It seemed like a huge issue then for that industry. But the value of most print content has declined dramatically, along with the number of print publications. Top names still draw top dollar, but most of the rank and file are not so fortunate. We've now evolved to a digital sweatshop industry, centered on the blog.
Before we all side with Michael Eisner, let's take a step back for a bit, shall we?
Under full disclosure, I am a non-active member of AFTRA and NABET because I used to write for ABC and FOX network news programs. I'm also a former union grocery clerk, so you could say that union issues run in my past.
I think WGA has a valid point about the rates they are getting paid. The networks and production companies are seeing growing revenues online and advertisers are now starting to pay premiums for streaming content. If you don't believe me, ask Apple why NBC content is no longer on iTunes. It wasn't about charging more for single episode sales. It was about the inability to post ad content around the video.
Unfortunately, WGA only got organized about this recently. And it's more effective now because the broadcast season is in full swing, although a large portion of prime-time content has been available online all summer.
And the content they provide is far superior to 98% of the homegrown stuff you see on YouTube and elsewhere.
The facts are that the union writers are only asking for 6% of what they currently make on DVD sales (8 cents on a $19.99 DVD, for example) and the same rate for movies and TV shows online even if it is streamed from the Internet.
Scaring them into blogging is ineffective. Even bloggers have to find some type of revenue stream, which at this point seems to be primarily online advertising.
The larger issue here is pay for play with ad dollars as the prize. So the Hollywood writer's strike may only be the first step.
Even amateurs should be protecting themselves from losing out on revenue. Let's say you write a character-driven show about a lonely girl who gets in with the wrong crowd. Shouldn't you get paid if someone else is posting it on their site and getting money for it?
Granted, my information on this topic comes like 12th hand through the various web channels and excuse my general ignorance on the subject of the inner workings of the unions in the entertainment world, but it was reported several places about the DVD compromise that the writers offered, and it was also reported (less widely), that the writers offered to accept a percentage of web revenue rather than any fixed residuals.
Now maybe this is overly simplistic, but if there is no real web revenue currently, and none is anticipated in the near future, why not give the writers their percentage? 3 points on zero is still zero.
It seems to me that the producers are taking an unnecessarily hard line on redistribution via the net. They must be planning on making some real revenue there, or why bother drawing a line in the sand?
So, I'm not a big union person and not really sure I understand the current gripe with the WGA. I understand their fear but agree with Lou's comment that until the studios figure out how to monetize the distribution via the Internet, the point is a bit silly. I think the sticking point is they feel they have to do something. These contracts they are trying to sign will lock them into their revenue model for the next several years when digital downloads from services like iTunes and directly from the networks themselves become more popular.
Unforunately, the WGA is the first of many groups scrambling for a piece of the digital pie. The director's guild and screen actor's guild contracts expire next year and they are actively watching (and joining picket lines) in support of the WGA in advance of their own contract negotiations. Hollywood producers are drawing a line in the sand with the WGA ahead of talks with these two more powerful hollywood groups.
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