Already a Bloomberg.com user?
Sign in with the same account.
The Guild wants a bigger piece of the revenue stream for digital downloads of writers' work. The future of new media is at stake
Driving around Los Angeles these days, it's hard to pilot your car without running into a striking picketer. The whole town, it seems, is in the thrall of the writers' strike, as picketers from the Writers Guild of America gather outside the studios. Jay Leno shows up, handing out boxes of Krispy Kreme donuts. Julia Louis-Dreyfus makes an appearance, same for Desperate Housewives star Eva Longoria. This is great theater, but as for getting results? It's hard to imagine that this strike will end anytime soon, at least from the saber rattling that's coming from the writers' camp and that of the producers. "Nine months," says one source close to the studio brass. "That's how long we're figuring."
Even discounting for the bluster typical of early negotiating tactics, this walkout isn't going to be short and sweet. There's too much at stake: the future of new media, with the writers eager to make sure they get a cut of the action when their work is translated into TV shows, shorts, or any other format winging its way across the digital wires. What's more, there is some genuine bad blood between the Writers Guild and the Alliance of Motion Picture and Television Producers, aka the Hollywood suits. If you're hoping to see Leno and Letterman yucking it up anytime soon, maybe you'd better head to iTunes. As for sitcoms, enjoy 'em while the supply of scripts lasts (and that won't be more than another month or two).
Perhaps I'm being a bit of a Pollyanna, but I think there will be a little sunshine breaking through the clouds before too long. Within weeks, the Directors Guild of America, whose contract expires in June, could come to the bargaining table as well. They're the trade union made up of the folks who sit behind the camera and say "cut!" The directors, all 13,400 of them, may just be the calm and reasoned voice in all this. Maybe.
If history is any guide, the directors tend to set the pattern for the type of settlement that usually wins out in these negotiations. Maybe it's the fact that directors are closer to the business side of things since they have to balance artistic quality with the reality of staying somewhere close to budget. They tend to be easier for the Hollywood biggies to deal with. In 2004, the last time both guilds had a contract come up for renewal, the directors struck a three-year deal to boost pension and health care benefits—at that time, the issue of the day—a month after sitting down with the studio and network brass. No walkout, not much fussing and fighting.
Better yet, when the directors struck their deal, the writers seemed to see the agreement as a blueprint they could work from. Within two months of the directors signing their deal, the writers signed onto a similar deal, even though one of their top executives was quoted as saying the new contract "falls far short of what we had hoped for and what our members feel they deserve." Still, the writers acknowledged that the 2004 deal boosted their retirement and health care plans by $58 million, or roughly twice what the writers say they had been offered five months earlier.
Pennies per DVD
So are we looking at history repeating itself? Maybe. In 2004, no one went out on strike (in fact, the writers worked for six months without a contract, while still negotiating). This time, the writers have been clamoring for months for a strike, and have worked up a pretty good head of steam. And the writers haven't always followed the lead of the Directors Guild. Still, studio executives tell me they clearly want the directors to come to the table soon, even if their contract isn't up for another eight months, and have been told that it's likely to happen sometime in November. A spokeswoman for the directors would only say that the union "continues to evaluate the situation."
The parameters of the situation are known. And even though the directors have for years refused to negotiate in the press, it's pretty clear they will want the same general things as the writers are seeking: a piece of the revenue stream for digital downloads of their work. Before they broke off talks, the writers and the suits took some baby steps in that direction. The producers offered for the first time to establish a framework that would pay the unions a percentage of the revenues for "derivative works"—that is, works for TV or movies that end up being downloaded or streamed on the Internet, or cut up into smaller bit-sized mobisodes for cell phones. The writers bolted before they could hear what percentage of the money the producers were willing to give up. I suspect the directors will stick around to hear the number.
There's still a ton of work to be done, even if the directors hear a number they like. A proposal to hike the amount of money from DVDs that writers would get was taken off the table so the two sides could concentrate on new media. (Want a trip to fantasy land: The writers want a hike from the 4¢ they say they currently get per DVD to 8¢. The producers, using a different method of accounting, say the writers already get 6¢.) Still, if you have to start somewhere, I'd like to start with the idea that maybe getting the directors into action might just jump-start what seems to be an intractable situation. Then again, maybe I've been living in the fantasy capital for too long.