Bears Repeating
I wish I hadn’t been so busy with holiday commitments that I couldn’t get the following story about the ongoing dispute between the Association of Motion Picture and Television Producers (AMPTP) and the Writer’s Guild of America (WGA) into print sooner. As it is, Steve Hulett, Labor Union Business Representative for The Animation Guild (TAG), beat me to it earlier this week, but it’s exactly what a lot of people in the entertainment industry are thinking, and it’s why you may never look at television the same way again.
Four years ago, the major supermarket chains that service Southern California decided they were paying their employees too much. They raised the specter of the Behemoth of Bentonville; Wal*Mart, invading the state with its superstores and forcing the likes of Safeway, Kroger (known locally as Ralphs), and Albertsons out of business.
As Hulett posted in his TAG Blog, the “supermarkets demanded rollbacks from their employees...and the employees (surprise, surprise) went on strike.”
The public identified with the supermarket workers’ potential wage and benefits loss and stayed away from the supermarkets of the big three in droves. Four years later, there are only a few more Wal*Marts in Southern California than there were before the strike.
Consumer-buying patterns shifted and at least two companies (COSTCO and Trader Joes)—with very good employee compensation packages—have reported significant increases in sales both during and, more significantly, since the strike. Thousands of the Big Three’s customers left their stores and haven’t returned.
And that is what’s happening to broadcast television. Millions of viewers from every demographic are tuning out and finding other things they enjoy doing, as much if not more than watching TV.
Damon Lindelof showrunner of the hit Disney/ABC television series LOST and WGA member picketing at the Walt Disney Company
As the Silicon Sharks Circle
Marc Andreessen is the cofounder of Netscape and an active advisor and investor in high tech startups. Where others see strife, Andreessen— also quoted in Hulett’s blog—sees opportunity. It is his belief that a prolonged shutdown of the television industry is, “most significantly: catalyzing faster development of new business models for entertainment media ....”
To Andreessen, the Internet is to TV what desktop publishing was to typesetting: a one-way ticket to oblivion.
Currently, Big Media controls the playing field for writers, directors, and actors (the talent) because it costs a fortune to produce, market, and promote content. The Internet has the capacity to not only level the field but also to tilt it in favor of content creators.
Using Silicon Valley’s business model as an example, Andreessen points out that marketing Internet-based products is virtually free, with many tech companies relying totally on Net-based viral marketing:
Let people e-mail your content to their friends; let people embed your content in their blogs and on their social networking pages; let your content be searchable via Google; let your content be easily surfaced using social crawlers like Digg.” All free.
Production is very cheap. Handheld, high-definition video cameras cost nearly nothing. You can do almost every aspect of production and postproduction on any Mac. Hell, you can even score an entire movie for free--there are hundreds of thousands of bands on the Internet who would love to have their music embedded in a new entertainment property as promotion for the bands' concerts and merchandise.
The typesetting industry, its business model rooted firmly in the 19th Century, laughed at and belittled early works designed on and sent to press directly from computers. And, to be fair, some of those early works were pretty bad. However, in less than a decade, lower-cost “service bureaus” began springing up across the country using software that eventually excelled the capabilities of the finest traditional typesetting shops. Today, virtually all prepress work is done by computer, with a publication very often going directly from designer to press.
Take Two
Writing under the name Dixon Ticonderoga, one of the two entertainment industry veterans who serve as advisors to o-meon believes that the behavior of the AMPTP is worse than Victorian—“the AMPTP is medieval”—but vulnerable.
According to Dixon, there’s one time of year when the networks (also producers) are eager to get into production, and that's right after the upfront sales.
Each year near the end of May, media buyers commit hundreds of millions of dollars “upfront” to the networks after seeing the best pilots for the upcoming television season.
Had the WGA dragged out contract negotiations through pilot season and put on a face of weakness, rather than strength and resolve, they could have brought the AMPTP to its knees by walking out just before the upfront ad revenue feeding frenzy began.
Dixon believes that ship has sailed and that by striking the day after their contract ran out, the WGA has given up the best leverage it had. True, the element of surprise is gone, but I believe the current strike may still serve a similar purpose. Pilot season begins shortly after the start of the New Year, which in Hollywood is sometime in February. No writers, no pilots. No pilots, no upfront sales, and no millions of dollars of ad revenues to bank on. This is gonna hurt the networks and the studios.
Recent WGA Hollywood solidarity rally..
Images courtesy and copyright© the WGA.
Bah Humbug!
To be fair, there are published reports suggesting that the studio heads are letting it be known they are prepared to write off not only this television season, but also next year’s as well. Reportedly, this is part of a carefully orchestrated rumor campaign organized by the AMPTP, and its newly hired PR firm Fabiani & Lehane and Steve Schmidt of Mercury Public Affairs, to damage the credibility of the WGA, which until now has enjoyed fairly broad public support.
Writing for her blog Nikki Finke’s Deadline Hollywood Daily, entertainment industry journalist Nikki Finke reported that contrary to the AMPTP’s statements to WGA’s negotiating team, the studio bosses were actually planning on digging in their heals and walking out of the recently resumed talks as early as today. According to Finke, the plan is for the AMPTP to blame the WGA for the breakdown in talks and, by extension, the loss of next year’s television season.
Is that the sound of a startup Internet entertainment business off in the distance? What do you think of The Wonderful World of o-meon as an online show title?
BREAKING NEWS
Even as this story was being finished, local news outlets began reporting that talks between the AMPTP and WGA to end the five-week-old strike have broken down. Each side blames the other for the breakdown.
Although in a statement released to the media, the AMPTP said it was “puzzled and disheartened by an ongoing WGA negotiating strategy that seems designed to delay or derail talks rather than facilitate an end to this strike.”
