The writer’s strike is ridiculous. Not because Hollywood’s scribes and Hollywood’s producers don’t have real differences — they do — but because they’re easy to solve. The two sides are supposed to start talking again after Thanksgiving. Here’s the obvious solution to their problems, why the two sides won’t follow our advice, and how a certain power player could save the day.
- Give the writers a bigger piece of a lucrative business that already exists — the DVD market — and do a modest, short-term deal for digital rights that expires in three years. Then we’ll have a better idea of what that market actually looks like, and the two sides can agree to something meaningful.
- Why won’t this happen? Because the studios are arrogant and the writers are contemptuous. The studios have been happily soaking the writers for 20 years; the writers think it will be another 20 years before they have the leverage they have now.
- So how could it happen? Bring in a neutral but very interested player to broker a deal. He’d have to have respect and power, and he’d have to have skin in the game – as well as his own incentive to get the strike settled quickly. Our suggestion, and more details, after the jump.
Do a long-term DVD deal. Now.
The writers were screwed 20 years ago in a deal that ended up paying them about 5 cents per DVD; the studios sell each new release for about $13. The writers (and actors and directors) deserve a raise on this predictable, lucrative ($17 billion in 2007) line of business. The guild has proposed $0.10 per unit. Split the difference and get it done.
Do a short-term deal on digital, with a mandatory update within three years.
The digital business today is equivalent to home video was in 1985, except that everyone knows that digital will be huge. They just don’t know what form it will take. Will the dominant model be ad-supported, subscription-based, or pay-to-play? Downloaded or streamed? No one knows.
The studios do realise that they’re going to pay writers for digital rights Hence ABC’s deal on Lost webisodes that pays 1.2% to 2% of the licence fee to the writers. But the prevailing haze means both sides need to do a short-term deal they revisit in three years. This isn’t as hard as it sounds, and the dollars at stake for the next few years are tiny. We estimate that the gap between both sides on digital, even four years from now, is all of $71 million. It’s just not enough to warrant a strike-driven mutual suicide pact.
Why it won’t happen.
Simple, right? But bad blood on both sides means a nuanced deal based on mutual good faith is practically impossible. The guild believes it will be decades before it will ever see this kind of momentum and leverage, and wants to lock in the best deal it can get now. The studios promised in the past to re-evaluate the “hated DVD formula,” but never did. Meanwhile they’re worried about having to renegotiate a series of deals: Not just for the writers, but for the actors and other parties who will want a piece of the digital pie. So they figure they have more incentive to hold the line.
Who could make it happen.
This is the business equivalent of Northern Ireland or the Middle East. It requires a peace-making envoy who knows business, media, digital — and one who has a vested interest in keeping Hollywood strong. That’s why we’ve nominated Michael Bloomberg. New York has never hosted as much TV and film production, or had as many writing, acting and directing jobs, as it has now. The city needs Hollywood to go back to work as much as anyone. Mayor Mike: Get in there and get the job done!