Now that the strike is over and everyone is licking their wounds and getting back to work, there's something that's been itching my brain lately. Most of the coverage I've heard about the settlement has said that it's a win for the writers as well as a win for the producers. The writers now have permanent access to residuals from online content and the producers can get their moneymaking machine rolling again.At first glance, the internet content agreement seems like a pretty important victory, especially with services like iTunes and Amazon offering downloads of movies and TV programming, not to mention the monetization of the free episodes (with limited commercial interruption, whatever that means) available online from the major networks. But what percentage of viewers watch episodes and movies online right now? Not much. At least not enough, in my opinion, to justify a strike based so heavily on the internet download issue.
Remember early on, when the DVD residual issue was on the table? Remember when that same issue was withdrawn by the Guild because "[the production] Companies said [it] was a stumbling block"?
A stumbling block? Well, yeah. Duh. That's why you call for a strike. Because of stumbling blocks just like this. At first, the WGA asked for a four cent increase to the existing four cent residual for DVD purchases. But when the AMPTP freaked out over the DVD issue, the Guild did a little freaking of their own and withdrew it, choosing instead to focus on the internet residual issue.
According to Roger Smith in a recent episode of KCRW's The Business, the Guild really missed the boat by championing the internet issue over increased DVD residuals. According to Smith, the estimated revenue from all internet media (including online rentals, online purchases, and ad revenue from online episodes) for the last year of the current contract (2011) is about two billion dollars.
The estimate for future DVD purchase and rental revenues? About 17 billion.
It's a pretty simple assumption that more people are currently purchasing and renting their media on shiny disks rather than shiny computers. Moreover, since the AMPTP was completely unwilling to negotiate with the WGA unless the DVD residual issue was taken off the table, that pretty much shows you where the money is. Nevertheless, you have to at least applaud the Guild's ability to think of the writer's place in future technologies and developments. I just think it's the right victory for the wrong issue at this time.
On a completely different tangent, here's a insider's view of what the producers were working on while the writers were striking.
