Hollywood has fallen out with its writers union and there is the potential for mayhem in the studios market if it doesn’t reach a conclusion before the existing agreement expires, when writers are all threatening to down tools and go on strike.
The Writers Guild of America, an organization that speaks for over 12,000 TV and film writers, is talking about going on strike to get a better deal with Hollywood studios. The deal is up for renewal at the end of October and the WGA union wants to change its royalty payments for new media, such as online ad supported business models and both online and physical DVD sales.
These negotiations always look tougher than they really are. One side says its about time we cut the huge amounts you guys get paid, and the other side starts out by asking for double. But if this doesn’t get resolved pretty quickly, then the Hollywood engine would slowly grind to a halt in the run up to Christmas, and TV as we know it would come to a halt.
US studios have taken more and more global market share on TV and in cinemas, and each successive blockbuster cinema release is beating the previous record, due mostly to new strategies for getting movies to market. The big TV franchises like Lost and 24 are now global revenue machines involving online sales, rental, advertising supported viewings, many of which writers don’t get any extra for.
Up against the WGA is the Alliance of Motion Picture and TV Producers (AMPTP), which insists that internet streaming is just a promotional tool and doesn’t increase revenues.
Statements by the WGA point out that early negotiations were comprised of nothing but rollbacks of fundamental protections writers have won in the last 50 years. It called for doubling the payout on home video sales to 0.6% for the first $1 million of revenue, and less for over $1 million, mostly on the logic that manufacturing costs of DVDs have plummeted since its last negotiated these rights in 1985. At the time AMPTP argued that it ‘needed a break’ in order to develop this ‘unproven business model,’ which has now become more than 50% of revenues for movies, and a $20 billion business.
It seems like the WGA doesn’t want to play patsy twice and is digging its heels in over next revenue streams, such as re-use on non-traditional media, including the Internet, cellular technology and any other delivery system not already covered in the agreement, for which they want equivalent revenue percentages as cable and other pay TV.
There are a whole host of other complaints and issues that the WGA is calling for, and like all these union style disputes, they will meet, we’re sure, halfway or Hollywood will roll to a halt and the writers will be paid nothing. Naturally the non-US entertainment world looks on hoping that they can fill the void if a fight is impossible to avoid, but don’t bank on it.