Michael Eisner Calls Writers' Strike "Stupid", Says They Can't Afford To Pay Writers More -- Time Warner Announces $1 Billion Profit On Huge Summer Box Office

by Paul William Tenny

$250 Million dollars -- About 1/28th what Time Warner
made this year.
Two different stories from two different corporations on two different websites emerged today, that when put together, says all you need to know about why the writers are striking right now and how dishonest and pathetic the major studios are. Former Disney CEO Michael Eisner was on Wall Street today telling the stock market bigwigs that the writers' strike is "insanity" and "too stupid", according to The Hollywood Reporter, that "writers had been premature in pressing for digital revenue when the model was still unproven, and should have postponed action for at least three years."

NBC and Fox recently initiated a beta test of their new video publishing website called Hulu.com that will stream the two networks most popular shows free to users, but with television-style advertisements. Most TV shows on the big four networks can be bought on iTunes - yet they claim the model is still unproven. All the major networks and studios have been claiming poverty to writers in Los Angeles while bragging about record earnings in New York, a point the Writers Guild of America (WGA) has been making for much of the past three months without much success, despite damning evidence every year that such is actually the case.
On a continual bit of hysterical irony, the major studios continue reporting to Wall Street huge earnings and a solid future both in traditional media, as well as bright prospects for future platforms such as the Internet. In only the latest example, Time Warner reported on Wednesday that revenue had risen 9% to a staggering $11.7 billion with actual profit standing at an equally massive $1.1 billion dollars. Media conglomerate Viacom has reported much the same in the past few weeks as a record setting $4.3 billion summer box office guaranteed huge gains for almost every major studio.

Studio profits more than doubled to $268 million.

Revenue surged 33% to $3.2 billion on worldwide theatrical coin from Warner Bros.’ “Harry Potter and the Order of the Phoenix” and “Ocean’s 13,” and New Line’s “Rush Hour 3” and “Hairspray” - along with boffo home video sales of “300.” TW also cited higher TV licensing fees from off-network sales of “Two and a Half Men,” “Cold Case” and “The George Lopez Show.”

At the Networks biz, profit rose 24% to $681 million.

Writers were demanding a doubling of the fee the studios pay for the reuse of material they helped to create - called residuals - from about four cents per DVD sold to eight cents. The studios stated early on that such a demand was unthinkable, and that they wouldn't bargain in good faith (or at all) unless it came off the table. The WGA believed that some movement could be made at 11th hour federally-mandated talks on Sunday night on their demands for jurisdiction over new/digital media, but only if they dropped the DVD demand.

After the writers' acquiesced, the studio and network representatives simply walked out the door anyway.

Is it any wonder a strike seemed inevitable when the studios claim they can't possibly afford a four-cent-per-DVD increase in payment to writers at the bargaining table, while Viacom and Time Warner are announcing huge profits on soaring revenue to the money men on Wall Street?

These reports couldn't possibly have come at a worse time, or better, depending on how you look at it.
in Digital Media, Film, Labor, News, Streaming Video, Television


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