SAG and DGA bend over with a smile, WGA next?

by Paul William Tenny

Writers Guild of America logo

The burden of setting the standard for wage and rights gains for all of Hollywood is going to fall to the Writers Guild of America, per usual, even if none of the other guilds realize those gains for several years yet.

Both SAG and AFTRA took less than a month to secure early deals with the AMPTP focusing mainly on health care contributions, most likely in response to the recently passed Democratic health insurance reform law which will eventually increase taxes on such plans.

The DGA usually does whatever the AMPTP tells it to do, and sets the low bar for capitulation on all matters. The studios write the contract, tells the DGA to sign it, and then the DGA signs it. Then the studios demand that everyone else agree to the same deal, otherwise it wouldn't be fair to the DGA (called pattern bargaining, in Hollywood it's always good for management, and always bad for the workers. Basically the opposite of what it is everywhere else.)

Same as it always was.

The WGA deal which expires in May of next year is supposed to be a big one. The last strike was supposed secure fair residual rights for writers from the vague and scary "new media" which the studios claimed nobody understood and may not turn into anything that makes money. Despite the strike, the WGA really didn't get much on that front but promised to watch the emerging streaming market carefully and fight hard for it next time if it turns out there really is a business there.

It took all of five seconds for everyone to realize after the strike ended that streaming media was a booming market that the WGA had just given away for almost nothing.

Stories are making the rounds talking about Netflix being on the verge of cornering the streaming TV market the way Apple did with music downloads, making it one of the most powerful media companies in the country. Hulu, which the studios repeatedly said was losing money and may never take off, is charging for access to its content and is on the verge of a billion dollar public stock offering next year.

Hulu made $240 million in revenue in 2010 (more than double that of 2009), and showed 800 million ads to an estimated 30 million users. Yet that is the same service the studios swore up and down during the last contract negotiations was losing money and may never be profitable. Ever.

Both of these companies were around during the strike and the WGA was right to point to them as proof that "new media" rights were critical and more important than just about anything else.

Now we know just how right the WGA was to strike and how stupid it was to end that strike without getting reasonable new media rights.

SAG caved, the DGA caved, and now it's all on the WGA to go after new media rights just as that market is exploding. There's talk of Amazon going after Netflix with a streaming service for TV shows, and Apple is testing a rental business model for TV shows streamed directly to the newest Apple TV set-top box. Netflix just created a streaming-only plan for (originally) half of what Hulu was charging for Hulu Plus.

Giants Microsoft and Sony are thinking about jumping into the streaming television business as well.

Not only did the market emerge just like analysts said it would, there's already a vibrant and growing ecology of businesses with different ideas about how to serve the "cord cutters", people abandoning cable and satellite television for online-only viewing. Prices are low, competitors are popping up left and right, new hardware is being created to bring Internet TV to your real TV, and of course the people responsible for creating all of that content are being left out in the cold.

While Starz, 20th Century FOX, and other studios and rights holders are making $250 million dollar deals with Netflix for content, writers and actors are seeing very little -- if any at all -- of that money.

It'd be hard if not impossible to ask working writers to endure another strike in the midst of a recession, but what choice do they really have? If the WGA fails to secure these rights for two contracts in a row when it's questionable whether they could even get them after giving up even once, what are the odds they'll get them in 2014 and beyond?

All of this underscores how important it was to get these rights during the last strike and reminds everyone what a painful failure it was to let slip away exactly the rights they needed and deserved right from the outset.

in Digital Media, Labor


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