The Writer’s Guild of America’s contract with the producers is up on October 31, 2007 and the fight is on over residuals, the payments writers receive for reruns, DVDs, and other uses of material occurring after the initial issuance of the entertainment product. The guild went on strike in 1988 and the fall television season was delayed by only 22 days; 22 days that cost a reported $500 million. With the advent of Internet, cell phone, and iPod delivery of content, the writers want to be sure that they are in on the new revenue streams. The producers claim that these models are untested and that it is premature to set residuals for these areas. In addition, “They want a new system that withholds residual payments to writers and other creative talent until studios recoup costs for development, production, distribution and marketing.” Even if true, this position seems overstated at best.Â
So to address each claimed new issue: Development? Although it is true that some new programs are only aimed at cell phones or Web-based broadcasts, much of the content at issue is merely being sent through a new medium with perhaps some new cost for the servers needed to deliver the content. Production? Again, the content is either specific to the new medium or not. If not, then the development costs are already part of the television or film deals in place and the writer’s contract would reflect that cost as it is. Marketing? Here there may be some new costs but the current contract most likely already addresses this line item as it pertains to DVDs (i.e., the way residuals are calculated would likely account for such costs in whatever medium).
In short, most of the claims seem like stalls to extract as much revenue as possible before cutting in the writers (and as the article notes, directors and actors contracts come up next year). That being said, insofar as there are some new costs, the producers should state them more clearly (it is possible that the producers are correct about the business claims, but right now they seem to be offering little to support their position) and the writers may want to agree to some sort of escrow for residuals related to content that is purely aimed at the new media such as cell phones and the Web as these products may indeed have new costs and models that must be sorted out. As far as taking a television show or film and delivering it over a new medium, however, that seems too similar to pay-per-view, DVDs and the like. The issue should be solved honestly and quickly. Of course, the industry (producers, writers, and next year actors and directors) could play hardball, precipitate a strike, and watch as more people turn to user-generated content and video games with the resulting, astonished cry of where have all the eyeballs gone being almost inevitable.
Then again maybe when one has that much money at stake Pink Floyd has it right:
Money, it’s a crime.
Share it fairly but don’t take a slice of my pie.
Money, so they say
Is the root of all evil today.
But if you ask for a raise it’s no surprise that they’re
Giving none away.Â