We stole this comment from another blog (that no longer exists) pertaining to the upcoming writers strike. The blog post was trying to make sense of the strike, what it means to industry personnel and also what it might mean to us: the fans. A commenter, who claims to be part of the Writers Guild of America (WGA), put in his/her own terms…

I’m a WGA member (and one of the people striking on Monday)… Let me try to clear some stuff up, at least from my POV and to the best of my understanding.

     There are a lot of unresolved issues on the table, but the main two issues, IMO, are (1) DVD residuals and (2) New Media (basically Internet)

     DVD: Current residual formulas come to about FOUR CENTS per DVD. Yes that’s right. When you buy a DVD, the writer gets 4 cents. In comparison, about THIRTY cents go to the company that presses the DVD. This formula has been around since the days of VHS, when writers bought into the studios/network’s argument that home video is an “untested market”, agreed to the formula, and have resented/been screwed by it ever since. The problem is that when the formula was first set up, the companies argued that home video could wipe out, that VHS tapes were really expensive to make, etc. But then two things happened. (1) Home video became a runaway success. (It’s currently where studios make the majority of their money, esp. now that they’re releasing old TV shows, etc. In fact I’ve heard that theatrical releases of movies are now basically advertising for the DVD release) and (2) DVD replaced VHS. DVDs, as you know if you’ve bought blanks, cost almost nothing to make compared to tapes. Ie, the costs of manufacturing went down in 25 years. Unfortunately, the writers formula never changed in that period, and the writers still make… four cents. The writers are currently asking for about 8 cents per DVD.

     Issue #2, “new media”: Again the companies are arguing that this is an “untested” medium. Everyone knows it’s going to replace DVDs eventually, but the AMPTP (ie, the companies) are saying “no, it’s too new. It’s untested. We can stream online, we can sell online, but we can’t really pay yet”– sound familiar? It’s the 80s all over again. So when you watch streaming TV episodes on the Web today, the writers typically aren’t getting ANYTHING. Even though you may have noticed these videos are usually advertising-supported. Meaning the companies ARE getting paid. Jon Stewart made this point well on his last show.

     The companies have offered to use the DVD formulas for shows PURCHASED (as opposed to streaming) by customers online. They call this something like “online DVDs” or “online DVD sell-through” This is the equivalent of spitting in the writers faces, as the writers have been pissed about the DVD “home video” formula for 25 years. Totally unacceptable. Using this formula, the studios would pay the writers like four cents for an online download even though the studios’ costs to deliver to the customer would be practically zip.

     One last bit on the Internet. From what I’ve been learning, the current negotiating proposal from the companies is that “promotional” streaming to customers not pay the writers anything…ever… even if the “promotional” streaming is showing the entire show/movie AND even if the companies DO make money (such as via ads). In other words, they reserve the right to show ad-supported free streaming of shows online and pay the writers zip. Or looked at another way, they could move their entire networks to online streaming, still supported by ads, and the writers would make nothing.

     What this strike is really about: According to the company’s proposals, writer’s residuals for TV would disappear as content moves from broadcast to online. Current TV residuals would disappear to zero online residuals. (Residuals are the payments writers currently make that– for most writers– allows them to live in between gigs.)

     The issue mentioned above about writers not making money until the show does is totally a non-starter. Whether a show makes money or not is (1) subject to stuff like scheduling, advertising, editing, casting, and a million other things that the writer has nothing to do with, and (2) Hollywood accounting does not have the best reputation, as anyone who followed the lawsuits over Lord of the Rings, which supposedly made no money might know. I also heard that the “Simpsons” is officially a money-losing show. Yeah, right. It’s funny how many of these companies tell their investors “Our industry is doing great! The Internet is the future!” and then tell the writers “Oh we’re doing terrible. The Internet is untested and could go away.” Puhlease.

     I’m not a particularly active WGA member or anything, so the above is all to the best of my understanding. I recommend you check out http://www.unitedhollywood.com for some writer blogs or the WGA (www.wga.org) for more info.

     Blah. Sorry for rambling, but I guess that’s what editors are for ;) Hope this helps.

A WGA member

     Obviously this is an industry personnel’s opinion and only from one side’s perspective of the argument. Still, it helps to put thing into place so we can all understand.

     From what I hear, the WGA also wants royalties paid out before the studio and distributors even break even. So the writer gets paid for his/her work, but as of now, they also get a certain perentage of ticket sales even if the movie is a bomb. AMPTA (Alliance of Motion Picture and Television Producers) believes that royalties should not be paid out until the production company breaks even. As I understand it, this actually makes sense. The writer should receive their royalties along with everyone else; i.e. when the TV show or movie is a hit. If I’m wrong on this, please correct me. But in this regard, I believe AMPTA to be in the right. As for DVD and internet distribution profits, the WGA definitely has a leg to stand on with their argument.