Ok, so you've all heard of the hollywood writer's strike. It's basically why we are not seeing new episodes of shows, and why these shows stopped midway through the season.
When i first heard this, my initial response was that the writers should work, and not strike b/c i was sure they were getting their fair share of money. But, once you learn more about the writing process, and how things work in Hollywood, you'll realize that basically Hollywood is screwing the hell out of the writers.
Basically, when the writer's write a script, they are payed, and usually receive pay when their shows are syndicated. But, recently Hollywood studios are airing the shows on websites, and making money off airing them on websites by putting advertisements between the shows. Then, Hollywood studios claim that the full length episodes aired on their site are for promotional use only.
So, you might think you can support them by buying the DVDs of the show? This is not entirely true. When Regan was president in the 80s, and vhs tapes were just coming out, the studios asked the writers to take a pay cut on the money they get when a tape is sold, to cause a growth in the market. They cut it by 80%, and when the market picked up, they would get their money back. But, 20 years after this promise was made, they still haven't received the money, and make a meager 4 cents for every $20.00 dvd that is sold. They just want an increase to what was promised 20 years ago.
On Jenna's (Pam's) blog from The Office, she talks about some of this stuff:
Quote:
Understanding the Strike
By now you may have heard that The Office has shut down production. This is true. They cleaned out my trailer and just delivered me 3 boxes of my stuff. It is pretty surreal. We cannot produce new episodes of The Office until the Writer's Guild strike is over.
You might be confused about the issues of the strike and I'm hoping that this blog can make it a bit clearer. (I should probably tell you that I support my head writer/producer Greg Daniels and the writing staff of The Office in their decision to strike.)
The big issue in this negotiation involves the internet. If you go to NBC.com right now, you can watch an episode The Office for free. The network runs advertisements while you're watching it, which gives them an extra source of revenue. The actors, writers, producers and director, the people who created the content you are watching, are not compensated in any way for this.
The Writer's Guild has taken the position that the writers should receive residuals if the show re-airs on the internet just like they receive residuals if it re-airs on television since in both cases the studios are making money. The issue is a huge deal, because the internet is clearly where the future of entertainment lies.
Right now, a number of successful shows (like Lost for one) have stopped showing repeat episodes on TV at all, and have replaced them with ad-supported streaming video on their websites. If you're a Lost writer, or actor, or director, or a teamster that's no residuals at all for that show, and that's a big pay cut. We all count on the extra income that residuals provide as it can help us through a slump in our career when we aren't working as regularly. It is our safety net. In 10 years I may need those residual checks to cover my electric bill. You never know. Hollywood is a fickle town. If in 10 years, everything is rerun on the internet, the current union contracts say the studios don't have to pay us a dime. And, I'll be sitting in the dark.
I hope that helped to explain things a little. For more…
Here is a video of our awesome writers on the picket line. They are funny even on strike:
Oh...there are only 2 unaired original episodes of The Office left. And, I'm sad to say the one we were getting ready to shoot was going to be the funniest of the year. I'm sure of it. They've been pitching this particular story idea for over 2 years…it involves Pam and Jim being in Michael's home but that's all I'll say. I hope we get to shoot it soon. Let's all stay strong and hope that the strike can end soon.
and another one
Quote:
More about The Strike
Hey everyone! Thank you for all of your support with the strike. Trust me, all of us want to get back to work. We are hoping for a speedy resolution. We love making the show. We love being together and working together. But more importantly, we need to get back to work so we can get this town up and running again. It is already starting to get ugly.
Who does this strike effect?
This strike effects so many people. I read a comment from a girl in Chicago who said that her internship in California was cancelled because of the strike. I guess the production she was going to work on was shut down. Now, she doesn't have time to set up a new internship in time to graduate and that means her student loans will be due. She'll have to get a job to cover the bills and that means, no time for an internship and no graduation. Like a vicous circle.
Every week that we don't produce our show is a week we don't get paid. We are weekly workers not salaried employees. No show, no paycheck. The actors and writers on the show can hold out. We have savings. We can afford to be out of work while we fight the good fight. But there are a lot of crew members who are going to be struggling through the holidays this year because of the shut down of production. This is true every time a production shuts down around town. And this breaks my heart. A lot of these folks live paycheck to paycheck.
Our crew is amazing. They have been dedicated to our show from the beginning often working long difficult hours without all the spoils of having your face on TV. AND, they continued to show their support even as the show was being shut down. Check out our PA Dan's blog about his last day at work...
Who benefits from the strike? Who are we fighting for?
Some people have asked if everyone will benefit from the strike or if only the writers benefit. The Writers Guild only negotiates for writers. However, they are the first union contract to be up with the studios. The Actor's Guild contract is up in June 2008 and you can bet we will be fighting for the same residuals. It is important to support the writer's strike because the results of this strike will trickle down to the other union contracts...just like how a court ruling effects future rulings. We are a union show and hire union crew members.
And, as James put it in his blog: "This is for middle-class writers – your regular TV staff writers and people who may have done one or two small feature films. Residuals are a way they can make perhaps a few thousand dollars a year between gigs. This is a way they can put food on the table and pay the rent during downtime – and downtime is something almost all writers (and actors and directors) have."
Let's say you write a movie script and you sell it for $100,000...that's GREAT money! Your movie gets made and yada yada. You start churning away writing more scripts. But it takes you 4 years before you sell your next script. That $100,000 windfall is now stretched to $25,000 a year for 4 years. (And, I'm not even counting the 30% that goes to taxes and 25% to your agent/manager.) If during that 4 years they sell your movie on DVD or run it on Pay-per-view you get little residual checks for $1,000 here or $2,500 there. That money is essential for getting by. This scenerio is what the majority of writers, actors and directors in Hollywood face. You have a few flush years and then a big drought.
The future of media is the internet. In a few years it is more likely that you will download a movie or television show than buy it on DVD. But as it currently stands, those downloads produce no residuals for the creative types that made them. All the profit goes to the studio.
This is a great video with snazzy graphics that helps explain the strike. The studios stand to earn a projected $2 billion over the next few years from internet downloads. But they dont' want to share.
James writes more about how you can help in his latest blog...
Angela, Creed and Oscar were on the picket lines today. Tonight I'm picking up Dr. Wesley Von Spears, my beloved mutt. He's going to spend the weekend with me and you might just see us out on the picket lines tomorrow. He's very passionate about the strike. Andy on the other hand plans to picket our front door. He is striking on behalf of his right to live in a house without a crazy muppet dog smelling his butt all day. While I appreciate Andy's passion, I think he's gonna lose this one.
Finally...I LOVE FRIDAY NIGHT LIGHTS! I'm not sure I can say it enough. And boy...Riggins. Riggins! The tortured soul! The bedroom eyes! Jesus! Let's end the strike for Riggins!
so, people keep saying to support the writers, but what can you really do?
I forget that in the rest of the country this might not be the everyday news that it is out here. When production shuts down, there are all sorts of related professions that shut down and those people (not being actual strikers) don't have strike funds to see them through, and there can be other economic effects when their incomes are effected.
One of my clients that works in the industry told me about the DVD residual matter. The poor, poor studio execs came to the Writers Guild reps this week saying they can't give them the royalty rates promised years ago.
Typical corporate interests cannibalizing that which feeds them to keep the quarterly profit outlook high.
They should really look at the dead and buried major music labels who similarly made screwing everyone else common business practice.
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Transformers sold 8.3 million copies in the first 6 days. At $.04 per copy that's $332,000 for the 5 writers in the first week.
Now, what am I supposed to have a problem with?
Yeah but I would consider that the exception more then the norm. That was also a big-budget movie compared to say the DVD sets of The Office which won't ever sell near the level Transformers did. I can see your point, its kind of like trying to find sympathy for pro-athletes wanting more money but overall I support the writers (and those that are also affected as mentioned above).
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Transformers sold 8.3 million copies in the first 6 days. At $.04 per copy that's $332,000 for the 5 writers in the first week.
Now, what am I supposed to have a problem with?
that's 5 writers out of the thousands and thousands that write for movies and tv shows.
what about all the writers for television shows, independent movies, etc? Transformers is a summer blockbuster, which there are only a handful of each year, and transformers is one of the better selling dvds, ever.
so you think that something that was promised to someone shouldn't be fulfilled to the rest because of one movie?
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that's 5 writers out of the thousands and thousands that write for movies and tv shows.
what about all the writers for television shows, independent movies, etc? Transformers is a summer blockbuster, which there are only a handful of each year, and transformers is one of the better selling dvds, ever.
so you think that something that was promised to someone shouldn't be fulfilled to the rest because of one movie?
You made the point of saying that $.04 is "meager". I'm just pointing out, in some cases, that's not the case.
As for the other writers - go write a blockbuster.
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Let me flip that around. If the residuals returned to original levels, writers would get $0.20 per DVD instead of $0.04 per DVD. Massive difference to the writers, but less than a 1% impact to the profit margin of the sale.
Not even the industry execs would bring it all to a screeching halt for the DVD residual issue, in my opinion. The internet revenue is the biggest sticking point, and as Kuri noted, there's not a solid precedent to work from in resolving that one.
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You made the point of saying that $.04 is "meager". I'm just pointing out, in some cases, that's not the case.
As for the other writers - go write a blockbuster.
it is meager because they should be making significantly more than that. What about all the other dvds that sell around a million or less copies, and has multiple writers?
saying everyone should go and write a blockbuster would throw away all creativity for writers. What would happen to a lot of real good independent films, or low budget films that became classics, if everyone was trying to write a movie about giant machines that destroy stuff?
in any case, saying that full written episodes is just a promo to cut out the creators is very deceitful of the studios. I'm pretty sure that no one can really argue with this, except the people who are doing it.
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saying everyone should go and write a blockbuster would throw away all creativity for writers. What would happen to a lot of real good independent films, or low budget films that became classics, if everyone was trying to write a movie about giant machines that destroy stuff?
That's a personal choice on the genre you want to write in. But the guy who writes the blockbuster, or a movie with greater mass appeal, is going to be able to command a higher price from the studios.
I would never take a pay cut from my employer's request unless it was a super small business where I had a good and personal relation with the owner. And even then, if I took a pay cut, I would expect the owner to take one as well.
The internet is a huge issue. I think the author's should get paid for their work. Its just that laws for the internet are pretty old and there arent many clear cut rules to accomodate how technology has evolved so far.
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LOS ANGELES: As Hollywood digs in for a second week of a strike, the screenwriters might want to send a few angry picketers over to Will Smith's place. Or Steven Spielberg's.
And maybe the studio executives should think about joining them on the line.
As it turns out, the pot of money that the producers and writers are fighting over may have already been pocketed by the entertainment industry's biggest talent.
That is the conclusion of a surprisingly bleak new assessment of financial dynamics in the movie industry titled "Do Movies Make Money?" The researchers' answer: not any more.
The report, by the research company Global Media Intelligence in association with its partner Merrill Lynch, concludes that much of the income - past and future - that studios and writers have been fighting about has already gone to the biggest stars, directors and producers in the form of ballooning participation deals. A participation is a share in the gross revenue, not the profit, of a movie.
Through the twists and turns of contemporary deal-making, major studios in theory give away as much as 25 percent of a film's receipts under such arrangements.
The actual take is lower, because of certain adjustments. (This is Hollywood, after all.) But a Hanks, Cruise or Carrey whose movie brings $600 million back to the studio from all sources might easily wind up with a $20 million salary, and an additional $50 million on the back end, while an A-list director and producer could take in tens of millions more.
Industry-wide, the tab piled up to $3 billion or more last year, by the research company's reckoning, helping push the business of making films, which was somewhat profitable a few years ago, into a loss.
Roger Smith, a former film executive who worked more than six months on the report, said the effect of participations is huge, because "they can easily be paid out on money-losing pictures."
For the study, Smith and his team examined all films distributed in recent years by the six major studios, plus DreamWorks, which was independent before its acquisition by Paramount Pictures. It included movies from the primary studio operations, along with the bigger movies from specialty film units like Warner Independent Pictures. And not all of the films are completely owned by the studios, since some have equity investors.
The study estimated that all such releases last year would yield a combined loss of $1.9 billion after collecting the revenue from an entire first cycle of sales to domestic theaters, foreign theaters, home video, pay television and every other source of income.
Total sales for last year's slate, the company figures, will ultimately be about $23.7 billion, down about 4.6 percent from 2004. Total costs, meanwhile, rose to $25.6 billion, up 13.2 percent.
As he began working up the numbers last spring, Smith, who is the executive editor and motion picture analyst for Global Media Intelligence, a unit of the London-based Screen Digest, anticipated a harsh response from the studio owners. But with writers on the warpath for a larger share of what they see as expanding corporate profits, Smith said he was now braced for skepticism from the labor side.
In fact, neither side should be cheered by figures that describe an industry that has increasingly doled out its wealth to star performers and filmmakers, at the expense of almost everyone else.
Part of the bad news for the film industry came from a sharp decline in foreign DVD sales. Those dropped 15.5 percent in the period, while domestic DVD sales fell at half that rate.
But the real killer was the growth in participations. Their precise amount is difficult to reckon, because deals vary and details are seldom disclosed publicly. But Global Media noted that at Disney - which is unusual in that its financial reports break out annual outlays for participations and residuals - the figure had grown at a compound annual rate of 37.6 percent for the last five years, to $554 million.
If the other companies are spending at a similar rate, said the researchers, they are paying out shares worth $3 billion, while piling up an almost $2 billion loss on their new films.
A relatively small part of that goes to the guilds in the form of residuals, the contractual payments that writers get when their work reappears in various media - and which the writers are insisting be increased for media of the future.
According to a report from the Writers Guild of America West, which represents most of Hollywood writers, movie residuals were just $121.3 million in 2006, a mere drop in the $3 billion bucket.
A big star, by contrast, can easily make $70 million or more from a single hit, if he or she enjoys a so-called first dollar gross deal.
There is a marketplace justice to such arrangements. Unlike the much-derided "net profit" deals granted to weaker players - those points seldom get paid, because there is always some studio charge in the way - gross participations give valuable talent a real share of the action.
"Profit participations are negotiated between a willing buyer and a willing seller," said Steven Blume, chief operating officer of Content Partners, a Los Angeles company that buys participations in return for cash.
The terms, he noted, can change with every movie, making them more flexible than residuals, which become locked into long-term master contracts with the guilds.
But, from the studio point of view, this sort of payment is a bit like having a mortgage that does not amortize.
"These participations are paid in perpetuity," Blume said.
And therein lie new problems for studios that may have gotten too comfortable with such payouts in the last decade or so.
According to Global Media Intelligence, studios a few years ago could count on rising DVD sales to lift their properties into profitability in a five-year first trip through the marketplace. Then, fully paid for, the movies would provide a smaller but near-endless stream of income from library sales over the decades.
Now, however, those same releases are joining the library with multibillion-dollar losses in tow - and they continue to be weighed down by gross participations that never stop.
Even Disney's strong corporate performance in the past year does not necessary bode well. The company's studio unit, which was profitable for the year, had essentially flat revenue, at about $7.5 billion.
Despite a huge hit with "Pirates of the Caribbean: Dead Man's Chest," much profit, company executives said, came from the mining of its library with clever ploys like the "Little Mermaid" Platinum Release DVD, which sold nine million units without the burden of star participations.
Once it is understood that the biggest stars and directors can rake in dollars even from money-losing movies, it becomes easier to understand why companies dug in their heels when asked to make richer residual payments on media of the future than they offered on home video of the past.
These would trigger higher payments to other guilds, and would probably create pressure from lawyers and agents in search of still fatter participation deals for their star clients.
It is also not hard to see why the situation is especially galling for movie writers, who typically do not share in the most lucrative gross deals.
When it comes to finding a fix, some of the stars and filmmakers who have joined them on the picket lines may have a thought.
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I would never take a pay cut from my employer's request unless it was a super small business where I had a good and personal relation with the owner. And even then, if I took a pay cut, I would expect the owner to take one as well.
i agree but look at a lot of writers in the business now. A lot of them are 20s-40s, and were not even writing when the decision was made 20 years ago. So, they're basically getting screwed for a decision that someone else made for them years ago.
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The report, by the research company Global Media Intelligence in association with its partner Merrill Lynch, concludes that much of the income - past and future - that studios and writers have been fighting about has already gone to the biggest stars, directors and producers in the form of ballooning participation deals. A participation is a share in the gross revenue, not the profit, of a movie.
Let's not forget how much the industry spends to market and advertise.
That's an industry that is way out of control. It's as bad as government.
The Writer's Strike
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