by John M. Curtis
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Copyright November 19, 2007
All Rights Reserved.

nlike the 1988 Writers Guild of America strike that lasted 22 weeks costing an estimated $500 million, major studios have less leverage and more to lose than before. Back then, cable broadcasting was still in its infancy, with the three major networks—CBS, NBC and ABC—monopolizing content. With the rise of cable programming, network viewership has progressively lost market share. Since the strike began Nov. 5, the WGA and Alliance of Motion Picture & Television Producers have kept back-lines of communication open, announcing Nov. 14 that the dialogue would continue after the Thanksgiving holiday. WGA called the recent strike after the AMPTP refused to negotiate residuals for so-called “new media,” primarily involving Internet downloads for movies and TV shows. Producers were reluctant to cut deals on new media before assessing feasibility.

      Most, if not all WGA strikes, have been about residuals, payments for subsequent use or sale of copyrighted content. Many TV and film writers never receive residuals for reruns, despite the WGA's best intent. Even the Screen Actors Guild has trouble getting residuals for its members, despite strict contracts. “This announcement is a direct result of your efforts . . . the hours you've spent on the picket lines, the days you've spent educating friends and colleagues, the boundless energy you've put into engaging with not only the Hollywood talent community but people all over the country and the world,” said Patric Verrone, President of the WGA West. Verrone refused to be bullied by the AMPTP, realizing that, more than ever before, writers have more clout. While there's no definitive word yet on an early resolution, it's become clear that Hollywood producers have a lot to lose.

      Before the writers went on strike, the WGA and AMPTP met 17 times since July 16, discussing residuals for DVDs and new media. When the last session broke-down Nov. 3, Verrone decided to play hardball. Expanding DVD sales didn't go far enough, leading the WGA to press producers on downloads, especially from iTunes where content has already being sold without contractual relationships with producers. AAMPT president Nick Counter expressed renewed interest in talking to writers after Thanksgiving. There's growing speculation that lost revenues pushed producers to consider greater concessions especially in the untested “new media.” Despite picket lines, back-channel discussions have continued, leading to some hope that the strike won't go much longer. Calif. Gov. Arnold Schwarzenegger offered to mediate and jumpstart talks.

      As with the strike in 1988, producers worry that TV and film audiences will lose patience, resulting in a growing exodus from mainstream media. An estimated 10% of the audience never returned to network TV following the last strike. Today's strike could have far worse consequences for producers since the industry is far more dependent on content than 1988. With so much more programming on cable, producers must recognize the integral and interrelated role writers play in today's fast-moving content-driven market. Producers have less leverage than they had during the last WGA job-action. Shows like NBC's “The Tonight Show” with Jay Leno, CBS's “The Late Show” with David Letterman and NBC's “Late Night” with Conan O'Brien have gone into reruns, losing considerable market share. Advertising revenues and market share shrink when reruns begin.

      Producers are kidding themselves thinking they'll get back market share once the strike ends and new episodes begin. “I think our shows and our movies have a loyal following, and it's not as if there are great alternatives for them to watch now,” said WGA East representative Nancy Huck, reminding producers they can't take the audience for granted. Talent agencies have tried to provide common ground for a negotiated settlement. Creative Artist Agency partner Brian Lourd hosted a get-together with WGA and AAMPT officials hoping to bridge the gap. After his eventlast Friday, both sides announced they'd meet after Thanksgiving. Too many top-rated shows like NBC's “The Office” and ABC's “Desperate Housewives” have gone off production, raising revenue concerns from major studios. Talk shows like LA-based “The Ellen DeGeneres Show” also cancelled new programs.

      All indications point toward a swift resolution of the current WGA strike, affecting some 12,000 Hollywood writers. Late-night TV and popular shows like NBC's “The Office” and ABC's “Desperate Housewives “ have stopped production, prompting writers and producers to go back to the table. Unlike the strike in 1988, the industry can't afford a protracted hiatus, costing today about $2 billion a week. TV historians Harry Castleman and Walter Podrazik believe major studios can't afford to drag out the strike much longer. “The dirty little secret that's not appreciated by the public yet is that while the fall used to be the big deal of the TV season, it's not that way any more,” said Castleman, pointing out that Winter and Summer shows like Fox's “American Idol,” ABC's “Lost” and Fox's “24,” heap pressure on producers to settle the strike before losses hurt the bottom line.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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