I'm about to get myself in a lot of trouble. So be it... Listening to both sides in the looming writers' strike, it's clear to me that politics is about to trump sound economics. Neither the Writers Guild nor the Alliance of Motion Picture and Television Producers is looking at the issue properly.
If you look at the amount of money that was at issue during the last writers' strike in 1988, I bet it was less than the amount the strike ended up costing all concerned. And I believe that will be the case this time around, too.
Expecting movie studios and television networks to change with the times is not asking too much. New technologies have dramatically altered Hollywood's economic landscape, but the AMPTP is still clinging to a revenue model that was created back in the days of Lew Wasserman and Abe Lastfogel - and was, as I understand it, adopted from the record business (you remember records, don't you?). The movie business took the formula used for calculating record royalties and basically transferred it to the sale of videotapes (you remember videotapes, don't you?). What's more, the current royalty formula for DVDs factors in the cost of manufacturing (today's electronic DVDs and web downloads, of course, cost absolutely nothing to "manufacture"). Clearly, the media world has gone through a major evolution since Lew and Abe, and it's time for its business practices to follow suit.
On the other hand, what the representatives of the Writers Guild have to remember is that all union contract negotiations are to set minimums, and that the effect of the change in residuals from DVDs and New Media they are seeking will not rise to the level of revenue they are asking for - or what the strike is going to cost the Guild's active members. Once again, the eventual cost of a strike will exceed the financial gain being sought.
Going on strike to lose more than you gain is not smart negotiating.
Both sides should also keep in mind that TV ratings have fallen significantly over the last few years, and the movie box office hasn't been all that great either.
But, who knows, maybe clearer heads will prevail - and sound economics will supersede political posturing. Let's hope so, not only for the sake of the writers, the studios, and the networks but for the millions of people in the community who will be hurt by a strike, including below-the-line workers and all those who aren't in show business but whose livelihood is dependent on a Hollywood that is up and running.
Read more thoughts about the strike on Huffington Post's writers' strike opinion page
And her share of DVD sales - five cents each.
It's a personal account, but one that rings true for the greater problem - the producers rarely admit to making a profit on a movie; and the residuals formula for after market monies should have been addressed in 1988.
For the producers to revoke their "offer" of residuals rollback is a lark. It was never an offer any more than me offering to take my fist out of your face is an offer.
Accounting needs to change, residuals need to be fair. It's time for a hard reset for the perception and reality of writers. Writers without producers = writers. Producers without writers = ???
If someone creates something they should get royalties as long as it makes money.
Reagan, just like Clinton and both Bush's and Hillary clinton is are anti-individual and pro-big business.
We need some real Americans who support individual freedom over freedom of the collective or big business.
Having worked at a Big 5 agency, and seen people like Ari 'up close and personal' as opposed to an episode of Entourage, this comes to mind.
1) What kind of 'sound economics' will Ari apply the next time an agent comes into his office asking for a raise/promotion?
Agents leave over two things; power and money. Would Ari say ICM 'trumped good economics' when they let the highly respected Ed Limato leave over salary and (deserved) position within a corporate structure?
Would Ari apply his logic to the defection of several UTA agents to CAA? Last I checked, when an agent goes, their clients ('revenue stream') often go with them.
By AriLogic, UTA (and CAA/ICM/WMA/Endeavor) should realize the 'cost' of keeping them outweigh letting them go. We know better and agencies will continue letting agents go over a few dollars.
2) Ari says, "Going on strike to lose more than you gain is not smart negotiating."
If this is how Ari feels about labor negotiations, every agent at Endeavor should ask for a raise; per AriLogic, a $100K a year payraise, 'trumps' losing commission on a $10M payday for Talent X.
3) Ari says, "Both sides should also keep in mind that TV ratings have fallen significantly over the last few years, and the movie box office hasn't been all that great either."
I can see Ari telling his top agents, "...I can't give you a $100K raise, as the box office didn't perform...TV lost more of their audience."
Does Ari apply his logic to his (or network president, studio chief, media mogul) million dollar plus salary? If less than 50% of his clients had a 'hit' movie/TV over the past year, he'll reduce his salary by a fifth, fourth, third?
What's that you say Ari? You said NO?
The only one 'posturing' is Ari (ironic, considering he evokes Wasserman; a true fountain of knowledge from a bygone era when talent reps stayed outside the limelight).
As I understand it, the writer's get no residuals for DVD's.
When studios are making millions off of repackaging the DVD (aka "Friends: The Thanksgiving Episodes"), shouldn't the person who wrote it get at least a tip?
All the writers want is, if the corporation makes money with their content online, then the writers should get a cut instead of bupkus. I'm sure an exception can be made if the company maintains a site for promotional purposes. Writers don't get a cut of the promos on TV or anywhere else, because they hope to share in the box office.
I'm sure Detroit thought they were going to be the car capitol forever, and Pittsburgh was going to be steel city until the end of time! You think Hollywood as the entertainment capitol can't die out?
Where the hell is Governor Arnold's leadership on this issue?! He should be doing something, no only to help prevent this strike, but to provide competitive incentives to prevent productions from going overseas as well.
The same should be true for screen writers. Period. Come on, without the writers there is NO SHOW, not for the actors, not for the producers, not for the directors. I am sick and tired of those who have the imagination and talent being given the short end of the damn reward stick.
Huh?