WGA Strike, Corporate Control, and Pushing Writers Out
I told myself that I'd take today off most of my blogs, including this one, but the writers' strike in Hollywood continues to beckon, and time is a-wastin'. Although most people reading this blog are unlikely to be WGA members, the strike and the issues there are important, because they tie in very closely to what freelance non-fiction writers are facing, often from the same large parent corporations.
The issue between them is that the writers want a share of the Internet revenue and the studios absolutely refuse, saying, "Oh, we're not making any money, it's just promotional." That is so much hogwash. They may be making little profit - though you never can tell with the accounting tricks studios are notorious for employing in their attempt to keep every possible dime - but they are making money. It may not be much in comparison to what they make through more traditional distribution, but it exists. If they get to distribute programming without a cut to the writers on the Internet now, because, hey, they said they weren't making anything, then that fiscal arrangement will never change.
That's the way the studios would like it. What happens when television is delivered over high speed Internet connections? Voila - no royalties to writers! What a way to boost the bottom line.
The problem, if you ask Alec Baldwin, is that Hollywood is largely in thrall to people who don't understand how to make compelling entertainment. They want guaranteed results without risk, which, in business, is like saying that you want to make scrambled eggs without cracking the shells. Shy of a science fiction novel - product of a writer, of course - in which you remove the egg through a fourth-dimensional twist past the three-dimensional shell, it simply will not happen. Business is the controlled use of risk to get a return on capital, and what makes it more dependable than out and out gambling is that you have people at the top who understand their businesses and how to make decisions that minimize risk and maximize pay-back.
To accuse writers of greediness for wanting to make a profit - as Damon Lindelof, co-creator of Lost, suggests - has a doubly-bitter irony. As Baldwin says, the studios are blaming the writers for their own screw-ups. In addition, they're trying to vilify the writers for wanting to make a profit, which is just the thing the studios are trying to do, only they want to increase their share by decreasing even the tiny portions going to others.
And now back to freelance writing as you and I know it. Publishers have been saying, "Oh, we can't pay for the web." As I've pointed out, that is nonsense. They're developing new publishing enterprises requiring investment. But because they hadn't been operating them at a profit (not sure that is true any longer), they wanted the writers to take give up their compensation. Do the web hosting companies provide bandwidth for reduced rates because they publishers are trying to start new types of businesses? Do they get free electricity and computers and storage and software? Nope, they don't - they have to pay for them. But without the content, they have nothing to store, to run through computers, to send over the Internet pipes, and to land in someone's browser.
They also want free use to adapt articles for television, to read entire books on satellite radio, and to do anything else that makes money. The publishers have two realistic choices, if they want to continue to have content that will actually attract people, and not crap churned out by people happy for their name printed somewhere, but who cannot deliver in the long term what makes for a working business model. They can give writers a cut of what they make, or they can pay writers enough up front that they can afford to be more generous with rights.
However, the current approach - saying "Sorry, but we need more and have to pay you less" - cannot work over the long run. Of course, by the time it gets really screwed up, upper management hopes to be out the door and into retirement, leaving the problems for the next generation, as well as the shareholders of the companies. Perhaps it's time for the shareholders to realize that although things may look good in the short run, they are going to be losing far more over the long term. Perhaps they should insist that many of the magazines, particularly the big consumer titles, stop burning money in all the ways they do that anyone who works there or deals with them knows. Paying the writers would be nothing in comparison, and the return could be tremendous.
The issue between them is that the writers want a share of the Internet revenue and the studios absolutely refuse, saying, "Oh, we're not making any money, it's just promotional." That is so much hogwash. They may be making little profit - though you never can tell with the accounting tricks studios are notorious for employing in their attempt to keep every possible dime - but they are making money. It may not be much in comparison to what they make through more traditional distribution, but it exists. If they get to distribute programming without a cut to the writers on the Internet now, because, hey, they said they weren't making anything, then that fiscal arrangement will never change.
That's the way the studios would like it. What happens when television is delivered over high speed Internet connections? Voila - no royalties to writers! What a way to boost the bottom line.
The problem, if you ask Alec Baldwin, is that Hollywood is largely in thrall to people who don't understand how to make compelling entertainment. They want guaranteed results without risk, which, in business, is like saying that you want to make scrambled eggs without cracking the shells. Shy of a science fiction novel - product of a writer, of course - in which you remove the egg through a fourth-dimensional twist past the three-dimensional shell, it simply will not happen. Business is the controlled use of risk to get a return on capital, and what makes it more dependable than out and out gambling is that you have people at the top who understand their businesses and how to make decisions that minimize risk and maximize pay-back.
To accuse writers of greediness for wanting to make a profit - as Damon Lindelof, co-creator of Lost, suggests - has a doubly-bitter irony. As Baldwin says, the studios are blaming the writers for their own screw-ups. In addition, they're trying to vilify the writers for wanting to make a profit, which is just the thing the studios are trying to do, only they want to increase their share by decreasing even the tiny portions going to others.
And now back to freelance writing as you and I know it. Publishers have been saying, "Oh, we can't pay for the web." As I've pointed out, that is nonsense. They're developing new publishing enterprises requiring investment. But because they hadn't been operating them at a profit (not sure that is true any longer), they wanted the writers to take give up their compensation. Do the web hosting companies provide bandwidth for reduced rates because they publishers are trying to start new types of businesses? Do they get free electricity and computers and storage and software? Nope, they don't - they have to pay for them. But without the content, they have nothing to store, to run through computers, to send over the Internet pipes, and to land in someone's browser.
They also want free use to adapt articles for television, to read entire books on satellite radio, and to do anything else that makes money. The publishers have two realistic choices, if they want to continue to have content that will actually attract people, and not crap churned out by people happy for their name printed somewhere, but who cannot deliver in the long term what makes for a working business model. They can give writers a cut of what they make, or they can pay writers enough up front that they can afford to be more generous with rights.
However, the current approach - saying "Sorry, but we need more and have to pay you less" - cannot work over the long run. Of course, by the time it gets really screwed up, upper management hopes to be out the door and into retirement, leaving the problems for the next generation, as well as the shareholders of the companies. Perhaps it's time for the shareholders to realize that although things may look good in the short run, they are going to be losing far more over the long term. Perhaps they should insist that many of the magazines, particularly the big consumer titles, stop burning money in all the ways they do that anyone who works there or deals with them knows. Paying the writers would be nothing in comparison, and the return could be tremendous.
posted by Erik Sherman | 8:57 AM
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