The Strike

04Nov07

The big news in the world of American television is the upcoming strike of the Writer’s Guild of America, planned to start Monday, November 5. While I’m not an expert on the convoluted world of Hollywood labor policies, I thought I’d blog a bit about what’s going on and offer a bit of analysis from the perspective of a TV scholar – if you want up-to-date news on the strike, check Variety.

Whenever a guild renegotiates their contract, there are a number of issues in play, but it seems that most of this conflict stems from a stark disagreement on how writers should be compensated for home video and online distribution. Writers are typically paid a during the pre-production process for writing & revising scripts; they also get residuals when their produced work is resold, whether it’s in TV broadcasts or DVD sales. The current agreement on home video sales was created in 1985 for the newly emerging VHS market – 80% of the revenue gained by selling videotapes was deemed ‘manufacturing costs’ and not subject to the typical residual rate of 1.2%. But remember that in the early 1980s, most videotapes were priced for rental markets, at upwards of $80 per tape, so the residual numbers were reasonable. Fast forward 20 years – the cost of manufacturing is minimal, the revenue per DVD is much smaller, and thus writers typically get less than a nickel per DVD sold.

The WGA is proposing to double the portion of DVD revenue subject to residuals, effectively raising the residual rate to around .6% of revenues (it’s a little more complicated than that actually). This would still be a tiny portion of DVD revenues, which are a major income stream in Hollywood – the WGA sees this as a major correction of an unfair policy that has been in place for years, as there’s no doubt that producers see net revenues of more than 20% of DVDs. More importantly, they want to undo this precedent for newer media of downloadable and streaming content, where they hope to establish residual rates more consistent with other distribution avenues like syndication and airline use.

And whether these residual policies are even being followed effectively is in question. As veteran sitcom writer Ken Levine writes in his fabulous blog: “The producers say we already receive royalties from DVD sales. There are no less than fifteen box sets of TV series with my scripts in them. I haven’t received a dime. I have gotten $0.19 from American Airlines for showing eight of my episodes on maybe 10,000 flights. If I save my AA royalties for 147 years I might be able to buy a snack box.”


Not surprisingly, the producers (represented by the AMPTP) see things a little differently. They highlight how much money writers make – neglecting to compare writer compensation with producer & executive salaries – and how the entire industry is falling apart due to increased competition, eroding audiences, and those nasty file-sharing pirates. The AMPTP proposal is to extend the DVD formula to online and downloaded content, which is patently ridiculous given that the manufacturing costs of a digital file is virtually nil. And they claim that free online content (like on network websites) should not be subject to residuals, as it is ‘promotional’ for the broadcast or video sales, even when it is ad-supported – and the presence of online content reduces its syndication value, which is a major potential revenue stream for writers.

Yes, the media industries are transforming and the old business models are less stable. But much of the competition is shifting internally – viewers are migrating from network programs to cable channels that are owned by the networks. And even though ratings are dropping, ad rates are not falling at the same rate – as ratings become more scarce, their value rises. So ignore the industry’s cries of poverty and desperation. What the AMPTP is doing is trying to maximize its own profits by squeezing creative workers who generally have little leverage. While some writers make a lot of money, most make very little, and residuals are most important to writers who achieve modest success by getting one or two scripts produced. I’ve yet to see any arguments in favor of the producers that doesn’t rely on misleading claims of industry collapse, or spurious accusations of writer greed and overcompensation.

One interesting facet of the strike that particularly concerns television – as many have noted, TV is a ‘writer’s medium.’ Most scripted programs are run by the head writer & creator, and that showrunner (officially an Executive Producer) has an ownership stake in the show. That means that many WGA members are also serving as producers, overseeing not just writing programs but the production and post-production process. There’s a lot of debate between the different guilds as to how such ‘hyphenates’ are supposed to act during a strike – officially, WGA members are forbidden from doing ‘writing activities,’ but should a showrunner overseeing an edit of a program be considered writing? According to the WGA, cutting a show for time is a writing activity, but the Director’s Guild feels otherwise. It will be interesting to hear how the programs with scripts already completed are produced and edited, as it complicates the division of labor within the industry and highlights how central writing is within television.

So here’s hoping that the AMPTP is shamed into negotiating on DVD & digital residuals quickly, as erosions in audience share for television will probably be long-lasting, and felt immediately in the more quickly-produced forms of late-night comedy and soap operas. We cannot afford a world without Daily Show and Colbert Report, so I’m banking on a quick and decisive victory for the WGA!



6 Responses to “The Strike”

  1. Like you, Jason, I’m amazed at how the industry likes to speak of itself as on the brink of extinction, when television remains the dominant cultural medium.

    But I also find the strike interesting for how it’s different from many other strikes. I think in particular of writers’ behavior in recent weeks, who in many cases, I’ve read, have been rushing to finish up stories, writing in natural breaks, should their last script handed in be a season ender, etc. Strictly speaking, this isn’t behavior union workers should be engaging in at all: a strike works by disrupting the smooth running of the business, so it’s quite rare to see unions scrambling to get work done before a strike, thereby damaging the effectiveness of their own strike.

    On one level, this points to the fact that they’re artists, not just cogs in an industrial wheel. Certainly, one might wonder what happens during the strike itself, especially with established shows – surely writers for such shows will take advantage of the extra time to think over what happens next. Many interviews with industrial personnel discuss how harried a process writing for TV deadlines is, yet here they seemingly have the luxury of writing time. If they weren’t artists, they wouldn’t take this time, but I’d imagine that for many, the value of their writing goes well beyond how much they get paid for the script.

    On another level, it points to the precarious situation that many of them are in. Variety reports, to no surprise, that networks will likely use the strike as excuse to cancel several shows, even – using force majeur escape clauses – some that they’ve supposedly picked up for the season. So whereas, for instance, when garbage men or nurses go on strike, they know that when they come back, in all likelihood, the same services will be required, many individual writers likely have no such confidence. I think here of Aliens in America, which Variety reported has almost all scripts in for the season. This alone could help the show live, whereas other shows that did as well/not as well in the ratings as AiA might be axed. So a strike is inherently more dangerous on many writers than it is for many union workers in other professions, since they have no guarantee of coming back to a job. That is what the industry holds over them, and what could prove the ace up their sleave.

  2. 2 Fred

    You’re far more optimistic than I am. I think this may well lead to the end of scripted TV as we currently know it. What happens if the reality shows and news/exploitation shows that will soon glut the airwaves prove more profitable than the more expensive scripted shows. They may not attract numbers as high as the scripted shows (some anyway), but the cheaper price tag may make it worth it. As much as I support the writers in their demands, I think there’s a very real chance they’re shooting themselves (and thus us) in the foot on this one.

  3. 3 Jennie Chamberlain

    “If you want up to date news check “Variety”” I would suggest instead unitedhollywood.com — a blog from the trenches. You’ll find several unconfirmed facts in the Variety articles. Dave McNary admitted to the WGA that his front page article about the WGA taking reality off the table was based on his own speculation, not any factual evidence. Variety also reported that several hundred scribes picketed on Day One of the strike, but it reality there were several thousand and the numbers have been increasing. You can also check wga.org – you will find lots of good information, from statements issued by our negotiating committee and president, to copies of the agreements taken on and off the table. I hope this helps to uncover the truth of things. – Jennie Chamberlain, WGA member


  1. 1   The Strike by sweetthings
  2. 2 The Chutry Experiment » Striking Screenwriters
  3. 3 WGA Strike: Bring on the new new Hollywood « Derek Kompare’s Media Musings

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