How To Break The Hollywood Writer’s Strike—The 1.5 Percent Solution
Erick Schonfeld
29 comments »
It may be hard to sympathize with the TV and movie writers on strike. As the New York Times describes it, “instead of hard hats and work boots, the people on the pickets had arty glasses and fancy scarves.” But there are some serious issues at stake in this strike, particularly how the people who make TV shows will be compensated for the use of that material online. This actually is important because if Hollywood gets it right, it could set a precedent for all Web video.
Currently, the Writer’s Guild of America wants a flat 2.5 percent of all gross revenues (as defined by Hollywood accounting) for video shown on the Web, over mobile networks, or any future unspecified digital delivery networks. The producers want to keep the current rules, which give writers nothing for ad-supported video streams and 1.2 to 2.5 percent for videos that consumers actually pay for (whether downloads or streams). The producers are hiding behind the fact that the business model for Web video is still unknown in order to get out of paying the writers much of anything.
But if one thing is becoming clear it is that ad-supported video could be a bigger opportunity than paid downloads (Amazon, iTunes, and Netflix notwithstanding). There is nothing stopping the studios from negotiating to give the writers a percentage of future revenues, even if they are difficult to estimate. If no digital revenues are generated, then the studios won’t have to pay out anything. But if the Hollywood bosses figure out how to make a killing on the Web, then the writers (and actors, directors, and other contributors) should get a small cut.
Jay Adelson, the CEO of Digg and chairman of Web video production house Revsion3 (producer of Diggnation and the GigaOm Show) agrees:
I’m a big believer that those who make the content should be the primary
ones who benefit from it, particularly in this new, dis-intermediated
world the Internet has brought us.Considering the cost of distribution has dropped for digital streams and
downloads, it should mean greater margins for the studios who control
the content. Therefore, I don’t think its unreasonable to expect some
greater recognition for the content creator.
How much recognition? The Writer’s Guild is asking for 2.5 percent. That is a starting point for negotiations. The studios should come back and offer 1 percent and they can meet somewhere in the middle—say, 1.5 percent. And they should treat streams no differently than paid downloads. It should be 1.5 percent of gross revenues, however they are made. Of course, those traditional writers will be competing with far nimbler teams of creative professionals in the Web video world. Ultimately, they need to be more worried about competing with the economics of five or ten people (writers, cast, crew, editors, and directors) putting out regular video fare, compared to 50 or 500 people. But they should hold their ground in these negotiations so that they can at least get a taste of those Web residuals down the line—maybe enough for them to jump over to the Web full-time and cut out the Hollywood studios altogether.
Okay, now that we’ve got that settled, can we get back to watching some TV?
Even I could write better material than most of those predictable sissy hacks!
http://fakesteveballmer.blogspot.com
What strikes me most about the whole industry is how strangely it operates compared to others. I am a software engineer, and when I contribute to a software project, I certainly don’t get paid based on the revenue of the product. I might get stock options, but certainly not if I am an independent contractor. Is the world so different for writers?
The problem with these deals is that they create a one-size-fits-all model for content, and that just doesn’t work out. There are different types of writing, and each of them has a different value proposition. Maybe sometimes I, the writer, would prefer to be paid all up front instead of on the backend. Is that possible?
Furthermore, it’s hard to even imagine that something like a writers guild can even exist. Who are they striking against? Even large industrial unions go on strike against a specific company, not an entire industry. It strikes me as fairly non-competitive. If I’m a writer for SNL, can I decline to join the writers guild?
I’ll be honest… I just don’t know how it all works, and I’ve tried to find more information, but it isn’t easy. If anyone can point to a good place to learn how the industry works wrt these contract, I’d be very interested.
Steve - As a software engineer you know better than anyone when you are done with your project your off working on the upgrade or moving on to its replacement 2 years from now. In the TV world that show or movie can be viewed for infinity. Not many people now a days are buying windows 95 or the original doom most of the time there off using the next great incarnation. For me I could watch Seinfeld for the rest of my life.
Now if you invented a game or a program odds are you are going to move up the corporate ladder and get paid quite handsomely or end up leaving and starting your own business. A writer is a writer where ever he is.
This is why unions are bad in certain respect
Hollywood accounting is on profit, not on gross revenue. The writers (and anyone smart enough to know) won’t get screwed by a gross revenue deal, because it’s extremely tough to hide the gross revs, while extremely easy to hide profit, as the writer of Forrest Gump found out. Funny thing is he is an attorney and should have known better…
Internet homemade video got higher ratings than TV shows.
Besides… There is nothing else to watch on TV.
TV Writers out there stop lying to yourselves… Stop saying your got higher rating than Youtube, Yahoo, Google, Facebook.
It’s illegal to strike… WGA should get fired or layoff its employees.
You only see 50 - 80 years union workers. They are doing lousy job. Why don’t you fired them and cut their health care costs?
STOP GIVING GOOD STUFF!!!
They want to retire. So help them out!!!
LAYOFF it employees.
When you drive down the street. What do you call Union screenwriter who strikes WGA?
Writer’s block. Heheheh
Hold out WGA writers! Spit on 1.5%! Spit on 2.5%! Anything less than a 50% split is an insult to your creative contribution. Lock up the broadcast networks for as long as possible. Drive folks online for video content. Push up studio cost for online shows. Strike! Strike! Strike!
Sincerely,
Independent Online TV Producers Everywhere
The more you strike… Most likely you will lose your creativity. You will suffer development hell and writer’s block. You will never TV box office.
Many startup guys here agree.
1.) Do you job and shut up.
2.) Don’t strike. Just write and entertain
3.) Don’t join the union monster.
4.) Work hard.
5.) Don’t think about money.
All your TV show belong to Techcrunch deadpool.
I don’t have time for this shiiit!!! I’m programming now.
Some of these comments are nothing short of retarded. Silicon Valley shouldn’t bother trying to make sense of Hollywood. This strike has nothing to do with the internet. Studios are making record profits and screenwriters just need a better deal. Simple as that. People aren’t going to flock to the internet for their entertainment. Youtube is a joke and Revision 3 is only for nerds who can’t get a date to a movie to begin with. Most people won’t even notice the effects of this strike even if it were to last for months.
The gentleman above me summed it up rather well, but I’m already here so I might as well ask… What in the world makes these people think they deserve points? LOL! They are workers! Employees! If they want a share of the profit, they can buy some stock and work their tail off!
if they WORK HARDER now:
• their investment goes up in value
• their customers are pleased
• They earn the genuine admiration of their employers
if they PICKET on their owners property, LOSE their bid, and end up just having to WORKER HARDER later to catch up:
• they look pathetic to millions
• they are exposed as weak and feeble
• everybody loses money
• people move on to other media
The gentleman above me summed it up rather well, but I’m already here so I might as well ask… What in the world makes these people think they deserve points? LOL! They are workers! Employees! If they want a share of the profit, can’t they just buy some stock like anybody else? Is somebody STOPPING them?
These writers ought to stand down now. If they shut up and get back to work:
• their investments go up in value
• their customers are served
• they earn the genuine admiration of their employers
OR, on the other hand, if they continue this embarrassing display of begging and laziness:
• they LOSE (and they will)
• they end up just having to WORK HARDER (during the holidays) to catch up
• they look pathetic to millions
• they are exposed as weak and feeble
• their kids have a shitty Christmas
• everybody loses money except the lawyers
• customers move on to other media
I think these writers are fighting a losing battle. I don’t see anybody taking their their side. Certainly American TV viewers are already apathetic and BORED as it is. Not just because the writing stinks, but also because the top-down decision-making has been wholly unproductive. The place is in ruins, and I’m not talking about the Chaparral –– broadcast network comedy has COLLAPSED into a liturgy of urban relationship sitcoms and bland teen dramas and comic book series, while cable TV has been overrun by Bush-bashing stage acts who blather on with sketches and lame monologues so utterly predictable they might as well just repeat the same act from the day before! (how? I don’t know — if writers have guilds and unions, entertainers must then have cults or something; I have no other explanation for how these ‘comedians’ produce such congruently BORING content)
If Hollywood writers are so miserable, as they evidently are, I assume it’s because of the environment they live in. They may think they’re on strike for ‘fair wages’ or something, but they’re not. They’re on strike because they can’t stand the way they live, and they think money will solve the problem. They know their lives are embarrassing and pathetic. They know how LAME TV has gotten. Put all this together, and it’s just too much stress for them to handle. So forget all this ‘inequality’ and ‘fairness’ hogwash ––– it’s all the maxed out credit cards, prescription drugs, smog and illegal aliens these workers are actually picketing against, not their “unequal” pay grade.
Today, with the exception of South Park, TV writing SUCKS. It’s disintegrated into urban relationship comedies and comic book shows and cable TV has disintegrated into Bush-bashing drivel so utterly predictable they might as well just rerun the SAME SHOW they played the day before. and pounding on the owner’s private residence at midnight.
These people, the ‘Hollywood Underclass’ — they are a disease. A bunch of materialistic elitist snobs. They feel miserable because they can’t afford the lifestyles of the celebrities they fantasize, so they load their bodies up with prescription drugs and max out their credit cards with designer crap just to make it to the next day. Ugh
Re: Jesse
Thank you. Seriously.
Why is TechCrunch writing about the Hollywood Writer’s Strike? Unless you guys are a bunch of closet script writers for large Hollywood companies, stick with what you are paid to do. This is getting out of control. TechCrunch is turning into a “whatever is news or might gain some search traffic gets posted”.
Really Michael Arrington? This is the direction TechCrunch is going?
Can I get my news about the war in Iraq here as well? Maybe you guys have an insight on who the nominees will be for the democrat and republican parties? Feel free to give me your weight loss and dietary advice as well…
Jason S:
Because this has to do with INTERNET video.
Jason F:
I understand the paid downloads thing, but this would be like giving writers a cut off of commercials in a movie theater, or on a DVD? Writers should only get a cut where the video is syndicated. Why not write this article on what Hulu is being paid by NBC? Why not expose some of the financials that everyone is looking for behind Amazon, iTunes etc?
Instead of regurgitating mainstream information, leverage the “power” in the industry that TechCrunch has. Right?
Jason S:
I 100% agree with you on that. Hollywood writers get paid enough as it is. I’m just saying that this article is relevant to techcrunch because it involves internet video.
Let market forces dictate compensation. This seems to work in all other industries so why is it that content creators (print, TV and online) don’t value the model?
Good post Schonfeld. While the writers are already making a decent penny even before these additional profits, it makes no sense why big business should get even richer while the workers stay at the same revenue level. I see web based advertising supported media as one of the next big things - so the writers will really lose out.
I’m really surprised by these comments.
Do you understand that these writers get paid if I watch their show on tv, but get paid NOTHING if I watch it streaming online, or pay to download it from itunes? Based on where my house is, and lack of an outdoor antenna, I get NO tv channels. I watch EVERY show streaming or downloaded. The networks make high revenue from the ads on their streaming shows, which are getting more and more popular in this technical age. The quality of writing is ESSENTIAL to the success of a show. Why would you want to pay the writers NOTHING, just because the show was watched by internet instead of cable? It’s completely illogical.
Since when is striking illegal? Their contract was up. Isn’t the POINT of a union to unify workers giving them the power to negotiate? And as someone asked, no, I don’t think anyone is ever REQUIRED to join a union, unless their employer chooses ONLY to hire unionized workers.
I completely agree with Amanda. Writer deserve more money. All you have to do is watch the WGA Explanation for the Strike and you can’t possibly disagree: http://writerspay.hollywoodstrikes.com
I work for **** but in their **** department which couldn’t be more unrelated to what is going on between the feuding sides. Yet, “the other side of the story” comes in terms of what the news is neglecting to report: myself, my co-workers, my bosses, as well as countless others in other departments face potential lay-offs simply because we have the misfortune of being stuck on the same roller coaster as this whole dilemma. What angers me most is that people who support either side seem to be fueling the idea of refusing to give in or negotiate, as if it is some fun game or a symbolic statement of “the demise of the working-class”. The sad thing is, I don’t even care about the symbolism or the fighting. I just want it to end. I love my job, and have never worried myself over making sure I broker a good deal or secure contractual terms. I simply go to work, do my job, get my paycheck and do what I can to help the department, and the company as a whole. Is that so much to ask? I just can’t logically see the fairness of a situation where even one family must face potential loss of livelihood.
I have an idea, perhaps they should lower the % of revenue they seek, and keep negotiating but go back to work. When half the writers that are on strike are no-talent cliche-spewing hacks, why do they deserve to be rewarded with THAT much more money?
Write good shows/movies, then ask for more money.
When you talk about the quality of writing in the shows, remember that the writer’s don’t have the last word on what gets used. They have to go through censors and the decisions of the same people who are claiming they want too much money.
Also, why such animosity towards people exercising their option for gaining better compensation for their work? Just because they can’t afford agents or lawyers to negotiate compensation plans like executives where they get paid for succeeding and for failing doesn’t mean they can’t use the means at their disposal.