Hollywood Strike Set

(This Forbes.com article is reprinted with permission of author Lacey Rose. It outlines what the AMPTP stands to lose in the wake of a strike. Click here for the original article.

My only clarification is that the sticking point for the WGA is not the DVD residual model, but Web Content.

It's the AMPTP who refuses to continue negotiations because they want us to take the old DVD model as the new model for Web Content.

Confusing?

Yep. That's the point. The AMPTP is saying that DVDs are the same as the Internet - therefore we should apply the old DVD model (0.3%) to our earnings for the reuse of our content over the Internet -- instead of our residual model for Network Television reuse (2.5%). )

Hollywood Strike Set
Lacey Rose, 11.02.07, 4:50 PM ET

On the eve of a work stoppage, Hollywood would be wise to listen to Jeff Zucker.

"A strike will happen at everyone's peril," the NBC Universal chief told a breakfast of industry insiders earlier this week. It's a sentiment shared by many in the Hollywood community.

Yet after three-plus months of acrimonious negotiations, the Writers Guild of America and the Alliance of Motion Picture & Television Producers remained far apart at the bargaining table when their contract expired at midnight on Oct. 31.

Writers Guild of America President Patric Verrone drew loud cheers when he announced in a closed-door session Thursday night that the union could strike as early as Sunday, several writers told The Associated Press. Then, on Friday, Guild officials announced that the strike is set for Monday.

At issue in the talks: compensation for content on the Web and increased residuals for DVDs. While the former was the anticipated sticking point (and still remains a critical issue), it was the latter that caused an 11th hour impasse. Writers are adamant that they be better compensated for content on DVD, looking to receive what amounts to about eight cents for each disc sold, rather than the current four cents. Producers feel differently, arguing that the revenues are crucial to moving projects out of deficit amid sharply rising costs.

"We cannot move further as long as that issue remains on the table," said Nick Counter, president of the Alliance of Motion Picture & Television Producers, in a statement. He may regret it. The last writers' strike in 1988 resulted in a 22-week work stoppage that not only delayed the TV season, but also crippled the industry. In addition to losing about 9% of its audience--much of it to cable--when new fare finally returned, industrywide losses were estimated at $500 million. Nearly two decades later, the stakes are even higher for companies like General Electric, News Corp., CBS, Sony and Disney.

Television will see the most immediate impact of a strike, with late night programs hit first. Without writers on staff to create monologues, shows like CBS' The Late Show With David Letterman and Comedy Central's The Daily Show With Jon Stewart will likely go into repeats fairly quickly. Within a month or so, daytime soaps will probably follow suit.

Prime-time schedules would appear relatively unchanged for a couple of months, since a handful of episodes have already been prepared. But if the strike drags on the 2008 schedule will be heavy on reality shows (not covered by the current contracts) and reruns.

Like many in Tinseltown, Lisa Klink, who worked on Star Trek: Voyager and Roswell, worries that audiences will flee out of boredom or frustration as schedules fill with repeats. Television is already struggling to maintain its relevance--and viewers--in the face of new technology. "It's tricky to get them back," she said.

Emmy-winning writer, director and producer Ken Levine, whose TV credits include M*A*S*H, Cheers and Frasier, agrees. "It's like if you're a restaurant that's struggling, it's not a good idea to close on the weekends."

Though CW Entertainment Chief Dawn Ostroff says they're prepared, with new reality series like Farmer Wants a Wife and Crowned waiting in the wings, she, too, sees no advantage to striking: "It's just better for everyone if habits aren't broken and if people that are getting into characters and shows are able to continue to do so."

The film side is in slightly better shape, at least in the near term, since movies have longer production timetables and major studios have reportedly readied their 2008 scripts in preparation.

But that doesn't mean a strike won't have an impact in the coming months, says director/producer McG, whose film credits include We Are Marshall and Charlie's Angels. Any film he has ever been a part of has had a writer involved in every step of the process.

"I don't care how much stockpiling has been done," he says. "No one is immune."