TV Writers Settle; Will Make It More Difficult For Hollywood To Adapt

from the bad-long-term-strategy dept

I've already explained why I think the TV writers were striking over the wrong issue. Even though it's easy to feel sympathy for the writers (and to dislike the studios who certainly have a long history of not playing fair), the unintended consequences coming from the now completed deal will cause harm to the industry over the long term. By trying to get a cut of internet usage on top of existing deals, the writers have just made it more expensive for the entertainment industry to adapt to the internet and more difficult for them to experiment with different business models -- even if the deal terms aren't as complete as the writers were originally demanding. Part of the reason the recording industry is having so much trouble adjusting to the modern era is that there are so many different royalties, making it nearly impossible to do anything new or innovative -- even if the end result would be more content and more money available for participants. There's a reason why most businesses work with pay-for-hire arrangements rather than royalties. It makes the process much more efficient and allows the company producing the product to have more flexibility in trying to sell the product. While it may seem like a victory for the writers, by limiting what mainstream content producers can do to adapt to the internet, it merely opens up more opportunity for others to route around this deal and do something more innovative, leaving the big studios that employ these writers in the dust.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Goto Ao, Feb 13th, 2008 @ 12:55pm

    Narrowcasting in future via broadband

    This is absolute nonsense. All that is required is for WGA and SAG members to form their own broadband Web network for all Web-based content subsequently accessible online.In other words, any narrowcasting of any and all content created by
    WGA and SAG can only be made available through (in this instance)the membership owned broadband network. As the related union contracts run out in future, the broadband and narrowcasting provisions for both WGA and SAG kick in. And that settles that.

     

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  2.  
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    Anonymous Coward, Feb 13th, 2008 @ 1:07pm

    What Hollywood has not discovered yet, just like the steel companys in the 1950s, is that consumers will go for the cheapest price.

    If Hollywood wants 20$ per movie and Ballywood wants $5 per movey delivered over the internet then it is good by Hollywood; hello Balleywood.

     

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  3.  
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    Anonymous Coward, Feb 13th, 2008 @ 1:16pm

    Mike, you often talk about how it isn't peoples responsibility to support outdated business models or provide a crutch for failing industries. Now, in this post, you are saying that fairly paying writers for the work they do would hurt the industry by not allowing them to maneuver as easily.

    Right or wrong, the way that writers get paid is mostly royalty based. When things eventually move from being on a TV screen through broadcasts to being server through the internet, the way those writers get paid would have slowly disappeared. Actors get royalties, musicians get royalties, writers get royalties, and so do many others. Excluding the writers ability to make income in the way that they have for a long time just to allow the industry to move a little easier doesn't make a whole lot of sense to me. Can you explain where I may be misunderstanding?

     

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  4.  
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    Anonymous Coward, Feb 13th, 2008 @ 1:45pm

    Re:

    I think it has to do with the fact that without the networks and studios, the writers don't have a job at all. So, making it harder for the studios to compete means it will adversely affect the writers.

    Now, obviously there needs to be adequate compensation to the writers since without them the studios would also be adversely affected.

    There needs to be a middleground where both have their needs satisfied. However, I think the point Mike was making was that the writers might very possibly be trying to take more than their industry can realistically give and still work properly. Making it a bad deal for both writers and studios.

     

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  5.  
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    Anonymous Coward, Feb 13th, 2008 @ 1:45pm

    I fail to see how giving writers a small percentage of each sale is going to affect any online transaction, to be honest. It's not exactly hard to simply add another royalty payment on top of something else. And if the companies think they can justify increasing costs due to a 0.6% or 2-3% payment to writers, they're gonna be met with resistance from pretty much everyone who buys it.

    I've always maintained that this strike was never about "getting more money". I'm sure that most of the people involved don't mind the increase, but that's not what it's about. To me it always seemed that the writers have realised that the future is gong to be online distribution, and they've decided to get their fair share of that deal now, rather than waiting until DVD sales etc... have stopped, when they'll need to start getting royalties from online sales to be able to keep living in the down time between shows (most TV writers don't write constantly. They work on a show for a few months, and then when that's done they have to look for another project, which can take ages. That's where they rely on royalties to keep them going.)

    And as you said yourself, Mike, the studios have a history of not playing fair. It's not like when that day comes, the studios will simply go "Oh yeah, here, have some money for this" of their own accord. In my opinion, this is just a form of future-proofing for the writers, and if nothing else, I applaud the strike for simply showing today's audience where the real power in hollywood comes from.

     

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  6.  
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    Dawn, Feb 13th, 2008 @ 1:48pm

    The writers got screwed once already taking less than they thought they should get in an effort to help technology grow. I don't blame them one bit for making sure they didn't get burned twice.

     

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  7.  
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    Mike (profile), Feb 13th, 2008 @ 1:49pm

    Re:

    Mike, you often talk about how it isn't peoples responsibility to support outdated business models or provide a crutch for failing industries. Now, in this post, you are saying that fairly paying writers for the work they do would hurt the industry by not allowing them to maneuver as easily.

    I'm saying that a pre-defined royalty based model that goes across so many people is the problem. You say it's "fairly paying" but that's an opinion. I'd argue otherwise. It's not fairly paying, it's loading the playing field, locking it into a particular business model.


    Right or wrong, the way that writers get paid is mostly royalty based.


    My point is that it's wrong. And, not just wrong, but wrong in a way that will hurt the overall industry.

    When things eventually move from being on a TV screen through broadcasts to being server through the internet, the way those writers get paid would have slowly disappeared.

    No, it would have changed. It would have adjusted. If companies need to produce content, they'll figure out the right business models to do so. Forcing a royalty scheme across the board doesn't help that. It defines the business model at the beginning, making it nearly impossible to adjust and change.

    Actors get royalties, musicians get royalties, writers get royalties, and so do many others.

    That doesn't make it any less limiting in terms of business models.

    Excluding the writers ability to make income in the way that they have for a long time just to allow the industry to move a little easier doesn't make a whole lot of sense to me.

    I could just as easily say that excluding the recording industry's ability to make income in the way it has for a long time just doesn't make a whole lot of sense.

    Or... excluding the way buggy whip makers make income in the way it has for a long time doesn't make a whole lot of sense.

    Models change. Locking in a specific business model on a new platform is not sensible and will hinder the ability of these writers to successfully adopt new business models.

     

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  8.  
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    Anonymous Coward, Feb 13th, 2008 @ 1:56pm

    Re:

    But what if it's not a sale? What if a network wants to give away free steaming of a show sans even ad support to build it's popularity? Ooops, now the network is 'cheating writers out of their deserved royalties.' Demands are made that some payment is given anyway. So now it costs the network more to reuse their own product. The network opts to not do so. End result: the show doesn't get promoted, the show fails, and the writers make less money because they work less.

    I come from a writing background and I have to say... I believe the writers should be on a work for hire model, albeit possibly supported by limited royalties in some cases. But I don't think a royalty structure should be the default.

     

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  9.  
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    GeneralEmergency (profile), Feb 13th, 2008 @ 1:58pm

    Re:

    Plumbers don't get royalties.

    Imagine having to pay each plumber who ever worked on your pipes or toilet each time you flushed.. and all the paperwork nightmares and auditing headaches and zero value added effort expended to manage this overhead.

    Why is a Writer's labor more special than a Plumber's?

    The only thing proping up this antique business "Guild" is the left of center politics of most studio personnel. But sooner or later, "Work-For-Hire" contracts will sweep this away because of two forces:

    1) Democratization of production.

    2) Foreign competition.

     

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  10.  
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    Lord, Feb 13th, 2008 @ 2:00pm

    This is backwards

    Pay for hire would greatly increase up front costs, increasing the risks involved. That flexibility would come at a high price. Royalties allow for lower up front costs, lowering the risks involved.

     

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  11.  
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    drjones, Feb 13th, 2008 @ 2:20pm

    Re: Re:

    Hollywood has made a career out of NOT "fairly paying" anyone that will let them get away with it. Look at the new lawsuit brought by the Tolkein Trust, where they got a paltry $62,500, for a set of movies that grossed close to THREE BILLION.

    Lack of royalties for the new mediums simply encourage the studios to push their alternate mediums, not because they want a better business model, but so that they dont have to pay royalties.

    Somehow, I dont think the raised cost is going to put much of a dent in their pockets, unless you can prove its significant enough to stifle any attempts or "maneuvering" into new mediums.

    Shaft the writers enough, and they will longer choose to make a living from their craft, nor will they be able to afford to. Then who will really hurt?

     

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  12.  
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    drjones, Feb 13th, 2008 @ 2:23pm

    Re: Re:

    Sorry, the whole royalty business model is something the entertainment industry helped shape. From music to movies, to any creative works you can think of... they encouraged and help define the laws that make such things possible.

    But apparently, if it costs them a little extra out of pocket to do the same thing for people they hire, then suddenly, they dont want to play by their own rules.

     

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  13.  
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    drjones, Feb 13th, 2008 @ 2:30pm

    Re: Re:

    Radio stations have to pay royalties for every song that gets played on the air, even though its beneficial for the artist more so than the radio station.

    Big entertainment cartels created this hostile environment, with never ending royalties for anything and everything. Look at the superbowl suing church groups for displaying the superbowl on TV's that are too big, to an aerobics instructor who has to pay the RIAA for playing songs in their classes, and on and on. The entertainment industry created, defined, and got FAT of the royalty model, and they were hoping to find a way to shaft one of the major driving forces of their industry out of THEIR royalties.

    Not really sympathetic here...

     

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  14.  
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    Anonymous Coward, Feb 13th, 2008 @ 3:34pm

    [quote]Part of the reason the recording industry is having so much trouble adjusting to the modern era is that there are so many different royalties, making it nearly impossible to do anything new or innovative -- even if the end result would be more content and more money available for participants.[/quote] That's not 'part' of the problem, that IS the problem. How many GOOD TV shows have been canceled to make way to some shitty reality show? And they wonder why I wont pay 60$ to get cable when I can pay 25$ and get everything off the net 10 minutes after it aired? Dumbasses.

     

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  15.  
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    GeneralEmergency (profile), Feb 13th, 2008 @ 3:50pm

    Re: Re: Re:

    You are defending the status quo. With technology comes change. South Park is a great example of how technology is democratizatizing media production, and this rate of change will only speed up.

     

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  16.  
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    drjones, Feb 13th, 2008 @ 4:09pm

    Re: Re: Re: Re:

    Regardless if the writers got royalties for new mediums or not, it might as well be written in stone... the status quo isnt going to change.

    The status quo is a long way off from changing, and as long as the writers are still stuck in the system, they should take what they can get. Letting the studios get away with shafting yet another group of people in their gravy train will only give them a little more money to throw in a politicians pocket to keep the status quo moving along.

     

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  17.  
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    Corey, Feb 13th, 2008 @ 4:30pm

    Re: Re:

    Here's why the plumber argument is a bad analogy. YOU hired the plumber to fix YOUR toilet. He fixed it, therefore providing a service, and you (the customer) paid for that service.

    If I write something (movie, song, book), my customers are the people who watch, listen to, or read it, therefore when they buy the product, I get paid. So, both the plumber and writer get paid per customer - the only difference is the writers product can be mass produced, so he gets more customers per product.

     

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  18.  
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    Wolferz (profile), Feb 13th, 2008 @ 5:22pm

    Re:

    "What Hollywood has not discovered yet, just like the steel companys in the 1950s, is that consumers will go for the cheapest price."

    ... for a COMMODITY. Services and finished goods are not so black and white.

     

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  19.  
    identicon
    tek'a, Feb 13th, 2008 @ 5:51pm

    Re: my customers are the people who watch, listen

    wrong, corey.

    In todays marketplace, your "customer" which is to say, your boss, is the Studio, Publisher or Agency your currently working for. The only partial exception to these is super-big name actors/writes, who have a lot more flexibility in controlling the structure they work with and even then its limited.

    The Production Agencies/Publishers Are the boss. they have decided that your output, when matched with their specifications, will create a profit. They Pay for the Service you provide in the creation, and they pay for control (however its set up) over that content.

    Unfortunatly, the current market is lazy. that is to say, Publishers/Content agencies slowly tricked the Creators of content into taking more and more of their payment later in the form of royalty (pushing it back to make it easier to chip off nickels and dimes from the eventual check).

    Now, content Creators have been convinced they have some Glod-given right to receive checks until the end of time and done their best to have it codified into law and contracts. This must change.

    If studios refused to deal with guilds, refused to deal with artificial job scarcity and started to pay an upfront wage for services rendered, things would be all the better for the Writers, the Studios and ultimately, the Consumer (us).

     

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  20.  
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    Anonymous Coward, Feb 13th, 2008 @ 6:08pm

    The reason the plumber analogy is idiotic is because when you hire a plumber to fix your toilet, you are hiring him to do a service to a piece of equipment YOU own. The plumber does not own the toilet. He is merely servicing it. A writer is not a worker-for-hire in that respect. Writers OWN their work. They OWN the scripts they write, and they sell the rights to those scripts to the studios in exchange for residuals. When a writer for 'The Office' writes a script, he owns that script, and then sells it to the studios, while keeping the rights to residuals.

    It's more like collecting rent from tenants in an apartment building.

     

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  21.  
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    Celes, Feb 13th, 2008 @ 6:39pm

    Re: Re: Re:

    So everyone who works in a hotel should get paid per guest instead of per hour? The guests are the customers, after all...

     

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  22.  
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    Corey, Feb 13th, 2008 @ 7:28pm

    Re: Re: my customers are the people who watch, lis

    Wrong, tek'a.

    Most screen writers don't work for movie studios, they are sell them individual scripts, or are contracted out to write individual scripts. They are not paid hourly, but are more of a partner in the creation.

    You also used publishers for your example. I am an author. I don't work for any individual publisher, but find a publisher on a book by book basis - Also, although I may get paid an advance on royalties, I do not get paid anything else from the publisher - I don't get paid for the expenses researching a book, for the time, nothing. I do not work for the publisher - its a partnership, I researched and wrote the book, they pay for editors, cover design, and promotion, and we share the profits (my share is my royalty). The music business works exactly the same way.

     

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  23.  
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    For review, Feb 13th, 2008 @ 9:07pm

    Re: Re: Re: Re: Re:

    Another example may be that of a project team.

    An analyst (Writer) typically plays an important part of writing specifications, creating documentation, making the project plan.

    All this is something the Program Manager (Producer) executes upon.

    The Project Team (Actors) are involved, but for the most part, they follow the plan the analyst wrote.

    If the effort is to implement a system that generates $250M annually, no one is paid a royalty. They are paid for those hours of work towards that work product.

    __________
    During the Gold Rush, many cities in CA were formed While the wealth from Gold was virtually non existant, material wealth was acquired by some at the expense of many in the form of local commerce (Read: shops, general stores, etc.)

    As the enconomy of Los Angeles evolved from lies into the damned lies of entertainment, the same lineage of people got their hands into that bigger cookie jar.

    GeneralEmergency- you forgot one other force...
    A big ass earthquake.

     

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  24.  
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    GeneralEmergency (profile), Feb 13th, 2008 @ 9:19pm

    Re:

    You are assuming the status quo is the ONLY model under which you can employ a writer. It does not matter what the labor is, in work-for-hire employment situations, the employer provides the equipment and the work product is the property of the employer. This is how much of the world's software is written (not that it make it any better). This is how all the world's toilets are repaired. It is the old corrupt GUILD system that keeps this imaginary property rights nonsense in place using various forms of coercion to prop it up.

     

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  25.  
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    Willton, Feb 14th, 2008 @ 7:06am

    Re: Re:

    The "old corrupt GUILD system" is still in place for entertainment because it is the cheapest way for studios to do business. Paying large sums of money up front for an unproven work, regardless of where the work comes from, is not an attractive way to do business. With the current system, studios only pay for works that actually make money. This allows studios to not have to waste money on deadwood.

    The status quo is certainly not the only model under which a studio can employ a writer. But it's certainly the cheapest.

     

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  26.  
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    jack hidary, Feb 14th, 2008 @ 7:10am

    writing in plain view

    i agree that the entire strike was an anachronistic throwback to the old studio system. writers now have the ability to create new shows on the net which they will own outright - why settle for pennies on the dollar?

    production and distribution have come down in cost to the point where the latest video flipcams now cost $100! you can edit the footage online and then upload to any number of distribution points.

    i sympathize with the plight of the writers but they should take the reins of ownership directly instead of trying to argue for residuals on a very slippery revenue stream that will be hard to track.

    Jack

    www.jackhidary.com

     

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