AMPTP agrees not to spin, spins anyway

by Paul William Tenny

Apparently back-channeling isn't only used in Hollywood for getting waring partners back to the negotiating table. Even though the AMPTP agreed not to send out any press releases or public statements about coming back to the table (the WGA will do the same) to avoid inflaming the situation more than it already is, that hasn't stopped them from sending out what amounts to a press release to their own employees knowing full well it will be leaked to, and reprinted by the media.

Sadly, the irreverent protector of fair and balanced reporting over at Deadline Hollywood bought the bridge and is now passing this love letter around as a sign that real progress is about to take place. All I see in the future is what I see in this letter: bullshit.
Rather than spend time ragging on Nikki for being suckered, I'm just going to point out a few things about this "memo" that was sent to the employees of Time Warner/Warner Brothers. Nikki thinks this is "exactly the right tone", whereas I think it's nothing but spin that below-the-line employees couldn't care less about, and are probably wondering why they were sent this thing in the first place.

The resumption of talks is very welcome news indeed to everyone in our business. We are all, producers and writers alike, looking forward to an end to this strike and realize that there's no way it can be resolved unless both sides are talking. Sitting down for serious discussions is an important first step in the resolution of our differences.

I'm going to throw a bone here to actual producers and point out that when the AMPTP talks about itself as producers, they mean that in the strictest generic sense. They are not an association of actual producers, and those guys that are aren't happy about their titles being dragged through the mud everr time the AMPTP decides to talk out of its rear end. The AMPTP is more or less a trade association like the MPAA or RIAA. They don't really produce anything, they pay for everything and then hire a bunch of other people to turn an empty warehouse into a working movie/TV set full of creative people that will actually do produce the thing.

Think of studios as a bank that can leverage unparalleled interference with a business seeking a loan while still doing none of the real work.

It's also kind of bizarre that the AMPTP (or Warner Bros. here) intimates that they just now figured out that a deal can't be had unless they actually bargain. Did they really want to admit to being that stupid to the people whose lives depend on them getting through this as quickly and smartly as possible?

One crucial fact that has been somewhat overlooked in all the noise surrounding the strike is that we, the members of the AMPTP, as producers of television programs and motion picture entertainment, have always believed that writers should be compensated when their work is distributed through new media and that they deserve to share in whatever success new technologies create.

The AMPTP since they first wanted to begin negotiations about three months ago have flatly refused to pay writers for streaming video, regardless of how long it is or what it is. Doesn't matter if it's the lowest rated TV show they own, or the biggest block buster film of the year - they have flatly refused to pay writers for streaming.

While it is true that some networks have paid writers for download-to-own media from iTunes and I suppose Amazon Unbox, they are only paying at the DVD rate, which is horribly outdated and unfair. This paragraph is pure spin straight out of every press release the AMPTP has published thus far, and was clearly written in such a way to make people think "new media" means all new media - it doesn't. It only includes what they want it to, which is download-to-own, not streaming.

Streaming is probably far more valuable in the long run for the same reason that live TV is more valuable than DVD sales. Sure, lots of people buy TV box sets, but they only account for a small fraction that watch the first run episodes live. If they can turn to the Internet to watch TV, that doesn't mean they are going to run out and start buying the DVDs in higher numbers than otherwise would happen.

If you want to believe the networks in their claim that the future of digital media is unknown, fine, be naive. Every single network streams their shows off their websites and only NBC allows you to download them outside of iTunes. Not only does NBC and Fox stream from their own websites, they set up a partnership ( to stream even more of their stuff for free.

Writers want to get paid for that, and streaming isn't something the AMPTP is willing to pay them for. That position hasn't changed, which makes the above paragraph really dishonest.

In fact, the industry has already paid millions of dollars in residuals for permanent and pay-per-view downloads. So while the terms of those payments may be on the table, the basic principle that writers should be compensated is not the issue.

"The industry has already paid millions of dollars .. for .. downloads." Not streaming, the about-to-be primary digital market that every single network is pushing into. The basic principle is still there: since writers contribute at a primary level to the creation of this content, when the networks/studios make money, they want to make money. All the "free" streaming video have commercials in them, from which the networks/studios make money, so why is it so hard to share?

This is more than just principle, because we're talking about leaving writers behind in the next paradigm shift in entertainment delivery that will make the conglomerates like Viacom flush will billions while this "promotional" material as the AMPTP is trying to define it, makes writers exactly $0.00.

Suffice it to say that while we are committed to hammering out a fair deal with our WGA members, Warner Bros. cannot make an agreement that places our company at a disadvantage or makes it impossible for us to meet our commitments to our many constituencies—other employees, shareholders, the producers with whom we work, and the public that, these days, is constantly redefining the way they experience our content.

The way the congloms write this story, you'd think writers are demanding such a large piece of the pie that it could possibly put Warner Brothers at risk of going bankrupt. That hardly jives with the 2.5% writers want for new media, does it? Does anyone really believe that kind of snowballing?

A while back, somebody either in the trades, in the AMPTP camp, or one of the L.A. papers said that if the writers got the increases they were demanding, it would cost the congloms something like $220 million per year. That's money that (if even accurate) would cover a new residual structure for an entire class of people, and yet those same companies and CEOs have no qualms about giving Chris Tucker and Jackie Chan a combined $75 million for Rush Hour 3.

One studio gave two actors, in a single picture, 34% of what would cover every possible writer getting residuals for the entire year, but they won't cough up that money to others. Compared to what is spent on A-list actors these days, 2.5% for new media sounds like a hell of a bargain for keeping an entire segment of the equation happy.

Still, think about what that number implies. If the congloms are paying out $220 million per year on the 2.5% schedule, that means they'd be making about $9 billion per year on their end (not accounting for what the other two big guilds would also want/get from a new, fair deal.) How is it these companies can complain that they'd have to pay $220 million per year more to give the WGA what it wants, saying that it's "too much" and "we can't afford it" while implying that their take is in the $9b range.

What the hell?

But they don't wrap it up with the standard press release spin, they have to end it with some of the most two-faced bull I've seen so far.

The producing organizations and the writers who are so integral to our business are both facing the same challenge. We live in a new-media world, and all of us must wrestle with the 21st century realities of our business. Going forward, we must work together to craft a new contract that is fair and keeps our business strong.

Here they claim that writers are "so integral to our business" that they refuse to pay them at all for streaming media, and insist on screwing them over for going on the third decade in a row with the outdated and unfair DVD residual formula that pays writers about four cents per sale.

Four cents.

There's no information in the letter that these employees didn't already have, nor is it really confidence inspiring even if you buy what they're selling. This letter which the media will spread is just another underhanded tactic by the AMPTP to get their message out even after they agreed not to do it.
in Labor


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