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This relates to the strike about "new media" and shows how idiotic it was, this being written by the people who did the strike over "new media" that has in no way replaced all that was lost in 2007 etc.



(Posted June 18, 2008)

It's the System That Needs to Change 

Jeffrey Korchek, a lawyer for toy company Mattel and former Universal Studios lawyer, wrote in the Hollywood Reporter recently (June 11, 2008)  that the industry doesn't have the money for the studio lawyers at the AMPTP and the industry unions to indulge in the luxury of a "fight" to resolve a contract negotiation. He thinks union contracts should be for longer than three years and thinks it's more important to keep everyone working than to hold out for an acceptable contract. He advises SAG to follow the example of the DGA, which, in his view, did not need to strike to achieve an acceptable contract. Mr. Korchek is wrong on three points worthy of a response.

First, Mr. Korchek characterizes the strike as a luxury in resolving the contract negotiation. If the studios thought of it as an optional strategy, the WGA certainly did not. The strike was born out of necessity in the face of a November 4 walk out by the studios that left a devastating offer on the table. The situation hadn't changed much when the studios walked out on resumed talks December 7. The issues were not small. The offer included pennies on the dollar for new media compared to long-established standards of residuals and the elimination of key provisions of the contract. In the end, writers were successful in avoiding the rollbacks, and they won residuals for new media that largely conform to the standards of prior contracts for other uses.

Second, while the DGA brought its own leverage and negotiating skill to the table, there is no doubt that the WGA's strike added to the DGA's ability to get a deal and exposed the AMPTP's willful scuttling of negotiations with the WGA. If the companies had conducted the three weeks of substantive negotiations that resolved the WGA contract in February of 2008 back in July of 2007, the WGA would have welcomed it. Those conversations and that offer were not available then. The studios and networks are well-informed about their businesses. We must take it at face value that they made a business decision they judged in their interest to delay the offer that long.

Finally, Mr. Korchek describes the industry's economics as "shaky" and opines that the pressure of a strike is "too great a strain." Actually, while industry revenues are shifting, they are growing. The entertainment business only appears shaky to those who do not look closely or those who have no strategy to adapt. Industry CEOs continue to brag to Wall Street that the economic outlook is bright and even claim that the strike improved their profits.

Mr. Korchek has raised a worthwhile criticism of the industry's labor relations. He writes that "The whole labor negotiation process has become contentious and distracting and costly." That is certainly true. If the studios and networks look back and agree with Mr. Korchek's conclusion that they should have found a way to make the offer earlier that they were eventually satisfied to make, there is a change to make. The cause of unnecessary conflict is a labor negotiating process disconnected from the operating divisions of the studios and networks. In February, when two seasons of television and the Academy Awards were about to go down the drain, and it became too costly not to settle, the CEOs got involved and the issues were resolved. That was the serious negotiation the WGA had sought from the start, but could not achieve without the pressure of a costly strike. Reconnecting the labor negotiating process to the operating realities of the business is a change that would solve the problem that Mr. Korchek raises. His solution to "just stop messing with the system" is neither specific nor helpful. It's specifically the system that needs to change.

-Chuck Slocum, WGAW Staff

(Posted June 16, 2008)

From the Computer Screen to the TV Screen  

In the LA Times (Monday June 16) Scott Collins wrote an insightful piece on Hulu, NBC Universal and News Corporation's online video joint venture. The occasion was the addition of Comedy Central’s Daily Show to the Hulu roster. As he points out, the greater significance of that appearance is that it inaugurates a relationship with Viacom. If Hulu wants to be the “department store” for video on the web, new partners are the metric of success to watch. Collins also helpfully assesses another important metric of success for a video site, which is depth of content. Hulu’s 700 titles are only a start at what they will need to develop a habit among viewers for dropping in. 

If Collins misses anything it is in his contrast of Hulu on the computer with the TV set. These are not the competitors he poses, but rather stops along an evolutionary path. For replays of traditional media content, computer viewing is just the first incarnation of Internet delivery and it may not be the most significant one. As Apple TV and the new Roku Netflix set top box demonstrate (with pay television business models), the next step for the Internet is migration from the computer screen to the TV screen. This process is one writers need to be keenly aware of. When Hulu, and other services like it, compete with cable-based Video On Demand on the TV set they will move from the minor leagues to the majors. Under the Guild’s new Minimum Basic Agreement, ad-supported VOD via cable or via Hulu to the computer, or eventually to the set top, will pay 1.2% of distributor’s gross receipts for feature films produced after July 1, 1971 and 2.0% of distributor’s gross receipts for television programs produced after 1977 (and a small number produced prior to 1977). Great potential is there for reuse of network and studio libraries on current and future digital platforms—and thanks to writers’ resolve it will be covered by our new contract.

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