Bay Area Writers Guild Picket in San Francisco's Union Square Today

What is the truth about the state of the industry? Will the Guild's proposals prevent further experimentation and hinder future business models in New Media, as the AMPTP has claimed?

1. As the marketplace changes the media companies are already positioned to adapt and capture New Media revenue. There are reports almost daily in the press about business models that have been developed to generate revenue through download-to-own sales, subscriptions and advertisements partnered with content.

2. The WGA would not be the first organization to reach agreement with the Companies on sharing revenues derived from content on new media platforms. CBS and Viacom content can be found on the web service Joost. The new NBCU-News Corp online video initiative will distribute content through AOL, Yahoo, Microsoft, and a host of other sites.

3. Content distribution deals made by studios and networks include revenue sharing agreements that guarantee networks and studios a percentage of advertising revenue generated from the content. Why not the writers, actors and directors who created the content?

4. The entertainment industry is very healthy and our proposals only seek to provide writers with a fair share of the success they have created.

a. Since 2000, Media Conglomerate Revenue from Entertainment Segments has increased 51% from $63 billion to $95 billion.
b. Over the same period of time, Writer Earnings and Residuals have increased only 20% from $1.1 billion to $1.3 billion.

Entertainment Segment Revenue and
Writer Earnings and Residuals 2000-2006

(Source: WGA Analysis of SEC filings and Company Annual Reports)

5. There is some ambiguity in the emerging new media landscape, but the formulas we are proposing for new technologies are percentages of revenue -- when they get paid, we get paid. If they don't, we don't. The formulas are technology neutral, and flexible enough to accommodate experimentation with new business models. As the companies develop their business models, residuals are simply an equitable cost of doing business.

6. The WGA is committed to bargaining a fair and reasonable contract that benefits both parties; but we refuse to negotiate off of the producers' proposals that would eviscerate the current MBA.

Written by John Bowman, Chair, Negotiating Committee

As we look to Contract 2007 and the opening round of negotiations on July 16, the Guild is following a story arc different from the one the AMPTP might have in mind. In the past, management has tried to take advantage of our internal divisions and fragile relationships with sister guilds. This year, our strategic approach to bargaining has emphasized member mobilization, organizing and finding common ground with our natural allies. We believe we are better prepared than ever to negotiate a fair and reasonable agreement that will protect all of our interests in the years ahead. And that's a good thing, because we have serious issues to negotiate.

Let's first examine residuals. For over half a century, the WGA and our sister guilds SAG, AFTRA and the DGA have bargained with the Companies to win contractual residuals that grant us compensation for the reuse of our work, with different rates based on the manner of distribution (broadcast, cable, home video, etc.) and the source of revenue (advertising-supported vs. subscription). The right of the writers, actors and directors to be compensated for reuse of the content they create is firmly established by years of precedent, even when we have disputed the fairness of a particular formula.

The Internet is a new distribution channel, and we believe the existing provisions of the MBA require residual compensation for our work when it is re-used on the Internet. Management, however, has refused to accept this interpretation, and has even threatened to do away with residuals altogether in this new medium, or to impose the outdated and unfair home video formula. Given that residual income can amount to between 20 to 50 percent of a writer's income, we clearly can't allow management unilaterally to dictate this most essential contract term.

There is no need for conflict on this issue-the Companies are doing very well in the marketplace. As the chairman of one of the Big Six media conglomerates recently stated, the Internet is a source of additional income. Television and film sales to the Internet have to date not cannibalized viewers from broadcast and cable. Furthermore, the economics of digital distribution are even more favorable than the economics of DVDs. Digital has no hard media costs, no boxes, no marginal extra shipping and handling. The only substantial economic issue for Internet reuse is the residual payment to directors, actors, and writers. Our position is simple and fair: when our work generates revenue for the Companies, we deserve to be paid.

Now, to jurisdiction: First, we must establish once and for all that writing for new media is covered by our MBA. With increased viewers and ad dollars on the Internet, we must secure our future. The Internet, cellular phones and other new distribution technology are simply channels for viewing the content we create. Again, our position is simple and fair: when we create valuable content for the Companies, we deserve to be paid.

Second, the number of non-WGA covered reality and animated television programs and non-WGA covered animated feature films has grown significantly over the past several years, and the percentage of work in television and film covered by our MBA has declined. I don't need to tell you that if this trend continues, there will be fewer work opportunities for our members in the future and a general decline in conditions and standards for writers in the entertainment industry. Even though the vast majority of animation writers and reality story producers have made clear their desire to be represented by the WGA, the Companies have so far refused to do the right thing. We believe it is long past time for the talent that creates some of the most successful shows on television and some of the most popular and profitable feature films to be recognized and treated fairly. Again, our position is straightforward: when writers create programs of great value for the Companies, whether scripted or unscripted, live-action or animation, they must have the right to be represented by the WGA and covered by our MBA.

As you will see from the information in this bulletin, the Companies can certainly afford to sit down with us at the bargaining table and treat writers like valued strategic partners. Instead, the public statements and histrionics of their AMPTP representatives seem to indicate that they won't deal straight with us without a fight. From their point of view, I suppose this tactic makes sense. Our Guild has not had to battle for issues this important for a long time, and management might hope we've lost the collective will to demand what we deserve.

They are wrong. Screen and television writers are united behind important issues to a greater degree than at any time since I joined the Guild in 1989. This unity has been on display during our negotiating committee meetings, the overwhelming yes-vote for the Pattern of Demands, and our recent organizing victories at Comedy Central. I am encouraged by the clear focus and pragmatic discussions as we and our sister Guilds explore new ways of working together. We all understand how important this moment is for our futures. The future of residual income and the jurisdiction of our union are at stake here. These issues are worth fighting for.

http://www.wga.org/subpage_member.aspx?id=2402