Strike Days: Blunt Instruments

Appearing today in various media outlets--notably the New York and Los Angeles Times A sections--was a full-page text ad from the AMPTP billed as "An Open Letter..."
Beginning with a reference to a "paradigm shift in how entertainment is distributed and consumed", it went on for the next two paragraphs hinting that the writers have a "fundamental misunderstanding" and went on to assert that writers "do receive residuals for digital downloading...the notion that we are not sharing new media revenue with writers is simply not correct", and then got into particulars:

The Writers Guild is proposing to change the formulas for digital downloading. For electronic selI-through (like buying a movie on iTunes), the Guild is seeking at least a 700 percent increase over what writers currently receive, and more than a 200 percent increase over what they receive for Internet "pay per view." There is no way that these increases can be deemed reasonable

Sounds huge, no? Read on (below) for WGA's translation of those numbers into the pennies they represent. Meanwhile, the letter states the writers are asking for "a percentage of what the internet site owners receive in advertising revenues, even if the producers are getting none of that money themselves" (again, there's rebuttal below) and finally, save for a plea that common ground can be found, the letter ends by noting that "No labor agreement in history has given writers, actors or directors a portion of advertising dollars."

Before going on to the WGA's quite avid demurrals, wouldn't any ordinary schoolboy debater ask why lean on precedent when the letter's thesis is about a unprecedently large paradigm shift? The strike itself may hasten the marginalization of TV advertising as the moeny shifts toward the old Internet ads that would seem to be the new revenue model. To put it another way, astronauts on prolonged space voyages have problems with their bone density, and cavemen didn't. But does that mean the astronauts should ignore the problem?

The WGA's rebuttal dared a couple witticisms, after beginning with this:

Nice try, AMPTP. In the words of the late Senator Daniel Patrick Moynihan, everyone is entitled to their own opinions, but not their own facts.

It then addressed the percentage numbers:

In our abandoned negotiations, the AMPTP insisted that the residual rate for digital downloading be pegged to the current rate for DVDs, a penurious third of one cent on the dollar. Let's repeat that: A THIRD OF A PENNY!!

The 700 percent increase they refer to roughly translates as 2.1 cents, the 200 percent as 2.5 cents.

The next point stated:

The AMPTP "offer" would allow them to continue to air the streamed content FOR FREE for the first six weeks after its initial broadcast release. In other words, the time period during which there would be the most demand from the public and the most bang for the advertising buck. After that time is over, they would throw us a fraction of the bone of whatever's left.

As their own ad notes, technology is rapidly changing the way our business works....
They offer streaming video for free, but make millions for the copious advertising that accompanies the content.

Screenwriter Stephen Schiff, who spoke of both these issues and his work on the Wall Street sequel recently in this space, amplifies the point:

What's probably clouded the picture a bit is the general belief that writers are paid nothing for any internet download. This isn't quite true, and the fact that it isn't quite true makes it easy for the AMPTP to thunder about writers lying, distorting, or whatever the hell else they're thundering about. But here are the facts. Writers are indeed paid zero for those Internet downloads which the companies have decided to call "promotional." By which we mean rebroadcasts of TV shows within a certain very generous time window. In short, reruns. Except reruns, from which writers used to make residuals, are going the way of the videotape. If you call reruns "promotions," that means you don't have to pay the writers when you use their work again - not even if you broadcast those "promotions" with advertising, for which the companies (but of course not the writers) get paid.

Schiff also found "crazy disingenuous" the AMPTP's statement that writers are getting a percentage of what the Internet site owners receive in advertising revenues connected with the streaming content, even if producers are getting none of that money themselves.", pointing out that the companies have shown great readiness, going forward. To sue anybody who's purveying their content without paying them for it.

The adversarial volleys arrived a day after WGA President Patric Verrone and Screen Actors Guild President Alan Rosenberg journeyed to Washington to consult with various politicos. Despite the general labor-friendliness of the Democratic leadership John Edwards, who offered a statement of support to the writers as did Hillary Clinton and Barack Obama, trumped them with an annoucement late Thursday that he'd be rallying with guild pickets on Friday in Burbank. Despite having longtime Democatic congressman Dan Glickman in place as the late Jack Valenti's replacement in heading the Motion Picture Association of America, the suits-controlled MPAA, as discussed in this space recently, isn't a likely source of diplomacy in the negotiations.

Meanwhile what the WGA hoped would be a united front among the guilds stands in some jeopardy as the clock starts ticking for the directors guild to start their own negotiations--traditionally, about half a year before their contract expires (on June 30). The Los Angeles Times saw it this way:

But that option is now fraught with complications.

In such an emotionally charged climate, directors have so far been reluctant to pull the trigger on their negotiations because the move probably would be perceived by writers as undercutting their fight.

In previous negotiations, the union has put greater emphasis on getting increases in its health and pension plan. In 2004, for example, the guild negotiated the largest benefits package in its history, worth $60 million.

Following that, writers were able to get the same deal. Still, writers complained that directors had undercut them by refusing to push for higher home video residuals.

Writers had been seeking a higher pay rate and felt undercut when directors agreed to the formula the year before. When the home video and DVD business boomed, writers thought they had been shortchanged.

Paul Haggis, as a writer-director with a strong knowledge of both guilds (but a fairly evident bias towards the writers), isn't optimistic about the directors as the solution. As he told me on the picket line last week amid blaring horns, "You know, we've always done this--the writers are always alone and we only get in trouble when we wait for someone else to help us. People say the directors will come to our aid --I'm a director, and its never gonna happen. And SAG is a great union, I love `em, they're very militant. But we have to do our job . We're always out in front. And I think the strike's gonna be a very long one. I think we're seven, eight months on his thing."

Around the time he spoke, the mail was bringing WGA members thick envelopes--The Strike Fund Committee's paperwork for assistance to WGA members who qualify as being "in serious jeopardy of losing a house, a car, medical coverage, or a facing a similar emergency...'

(Paul Haggis, right, leads pickets on Overland Boulevard in front of Sony Pictures)