Back To The Table

Within hours of our suggestion on how determine internet residuals, the AMPTP and WGA have announced that they will return to the negotiating table on November 26 (the Monday after Thanksgiving).

We can't say that this is all due to our idea (wink wink), but look for the new MBA, whenever it is reached, to use this measure of scheduling payments.  :)

Good luck at the table, gentlemen (and ladies!).  Leave your egos at the door and work out a deal!

Our Proposal For Internet Residuals

It seems the key stumbling block for the WGA-AMPTP negotiations is the issue of residuals for internet performances of the Writers' original work.

The AMPTP wants to give nothing.

The WGA wants a percentage of advertising revenue.

There is an alternative.

PAYMENT BY QUARTER

The biggest problem with determining residual payments for internet streaming is that there is no historical precedent for a consumer viewing a TV show or movie for free whenever he feels like it.

Under the existing residual scheme, Writers are paid a residual the first time the show airs, then another residual the second time the show airs (ie, repeat).  The Writer then continues to receive payments on a sliding scale for each subsequent airing.

This doesn't work on the internet, because an episode of say, LOST, might air a thousand times in one day, as a thousand individuals view it at separate times.

The Writers' proposal to get a percentage of revenue has no precedent, however.  Writer's residuals are, for the most part, known quantities.  Yes, Writers get a cut of theatrical box office, but this is not the same as advertising revenue.

So what we need is a method for calculating the internet equivalent of a network "broadcast."

Why not charge a residual for an availability time frame?  We propose that this window be a period of three months ("a quarter").

Continuing to use LOST as an example, let's say episode 3 airs on ABC in it's normal time slot.  The Writer receives a residual for the broadcast.  Now let's say that, the next day, ABC.com begins to make episode 3 available for streaming view on ABC.com.

The Writer would earn another residual.  ABC.com continues to make available a stream of the episode, say from November 17 through December 31.  That internet stream would count as 4th quarter 2007, and is covered by the Writer's residual.

Now, ABC.com can decide whether to keep LOST available for streaming view in the first quarter of 2008 (Jan 1 - March 31).  If they do, it would trigger a second residual payment to the Writer.

Every quarter that the show remains available for free streaming view (presumably with paid advertisements), the Writer would get a residual, paid on a sliding scale similar to repeat broadcasts on traditional network.

This quarterly residual is already tried and tested on the internet for licensing of photographs and other media.  It also closely follows the existing paradigm.

This method of calculating residuals is fair to both sides.  

Now, AMPTP and WGA, get back to the table and work out what the actual figures would be so we can all get back to work.

The Iraq War Analogy

As we are planning the coming content for this site, the one issue that we keep confronting is the fear that our intentions are going to be misinterpreted.

We disagree with the Strike.  We think the timing was ill-advised and we think the enemy was under-estimated.  

BUT...

...we support the Writers.  Their complaints with the current Agreement are legitimate and we firmly believe that they deserve a residual from for-profit internet distribution of their work.

In other words, We Support The Troops, But We Don't Support The War.

Problems With "The War"

It is our opinion that:

1. the WGA rushed to Strike (5 days after the contract expired), 
   
2. the WGA miscalculated the resolve of the AMPTP,
3. the WGA did not give negotiations (aka diplomacy) a chance.

The WGA assumed that by walking out now, they would force the AMPTP to begin earnest negotiations with the Writers before dealing with the DGA and SAG.  The fear was that joining with the other two Above The Line unions in a "perfect storm" strike would have lessened their role in the process, forcing the WGA to basically accept whatever the other two unions negotiate.

There was also the concern that Producers would stockpile works now in order to better weather the storm in the second half of the year (a tactic which worked for the Producers three years ago when a SAG strike was averted in the 11th hour -- the was still a massive work slow down for the next several months).

What the WGA failed to appreciate, however, was that the threat of a strike holds significantly more leverage in a negotiation than an actual strike holds.

Don't believe me?  

By most accounts, the last minute negotiations on Sunday, November 4 were proceeding well.  The WGA had removed a major request from the table (doubling of DVD residuals).  The AMPTP was moving on other proposals.  Work was getting done.

Then the strike happened.

There have been no talks since. (as of this writing - 11/13/07)