There are a lot of unresolved issues on the table, but the main two issues, IMO, are (1) DVD residuals and (2) New Media (basically Internet)

DVD: Current residual formulas come to about FOUR CENTS per DVD. Yes that’s right. When you buy a DVD, the writer gets 4 cents. In comparison, about THIRTY cents go to the company that presses the DVD. This formula has been around since the days of VHS, when writers bought into the studios/network’s argument that home video is an “untested market”, agreed to the formula, and have resented/been screwed by it ever since. The problem is that when the formula was first set up, the companies argued that home video could wipe out, that VHS tapes were really expensive to make, etc. But then two things happened. (1) Home video became a runaway success. (It’s currently where studios make the majority of their money, esp. now that they’re releasing old TV shows, etc. In fact I’ve heard that theatrical releases of movies are now basically advertising for the DVD release) and (2) DVD replaced VHS. DVDs, as you know if you’ve bought blanks, cost almost nothing to make compared to tapes. Ie, the costs of manufacturing went down in 25 years. Unfortunately, the writers formula never changed in that period, and the writers still make… four cents. The writers are currently asking for about 8 cents per DVD.

Issue #2, “new media”: Again the companies are arguing that this is an “untested” medium. Everyone knows it’s going to replace DVDs eventually, but the AMPTP (ie, the companies) are saying “no, it’s too new. It’s untested. We can stream online, we can sell online, but we can’t really pay yet”– sound familiar? It’s the 80s all over again. So when you watch streaming TV episodes on the Web today, the writers typically aren’t getting ANYTHING. Even though you may have noticed these videos are usually advertising-supported. Meaning the companies ARE getting paid. Jon Stewart made this point well on his last show.

The companies have offered to use the DVD formulas for shows PURCHASED (as opposed to streaming) by customers online. They call this something like “online DVDs” or “online DVD sell-through” This is the equivalent of spitting in the writers faces, as the writers have been pissed about the DVD “home video” formula for 25 years. Totally unacceptable. Using this formula, the studios would pay the writers like four cents for an online download even though the studios’ costs to deliver to the customer would be practically zip.

One last bit on the Internet. From what I’ve been learning, the current negotiating proposal from the companies is that “promotional” streaming to customers not pay the writers anything…ever… even if the “promotional” streaming is showing the entire show/movie AND even if the companies DO make money (such as via ads). In other words, they reserve the right to show ad-supported free streaming of shows online and pay the writers zip. Or looked at another way, they could move their entire networks to online streaming, still supported by ads, and the writers would make nothing.

What this strike is really about: According to the company’s proposals, writer’s residuals for TV would disappear as content moves from broadcast to online. Current TV residuals would disappear to zero online residuals. (Residuals are the payments writers currently make that– for most writers– allows them to live in between gigs.)

The issue mentioned above about writers not making money until the show does is totally a non-starter. Whether a show makes money or not is (1) subject to stuff like scheduling, advertising, editing, casting, and a million other things that the writer has nothing to do with, and (2) Hollywood accounting does not have the best reputation, as anyone who followed the lawsuits over Lord of the Rings, which supposedly made no money might know. I also heard that the “Simpsons” is officially a money-losing show. Yeah, right. It’s funny how many of these companies tell their investors “Our industry is doing great! The Internet is the future!” and then tell the writers “Oh we’re doing terrible. The Internet is untested and could go away.” Puhlease.

I’m not a particularly active WGA member or anything, so the above is all to the best of my understanding. I recommend you check out http://www.unitedhollywood.com for some writer blogs or the WGA (www.wga.org) for more info.

Blah. Sorry for rambling, but I guess that’s what editors are for ;) Hope this helps.

A WGA member

Transformers 2, a huge blockbuster CGI spectacle, taking its sweet time? This surely never would of happened if there were no strike.

Pompeii and a “bunch of other movies” getting killed? Why would they be put down over a strike? Shelved is the word that he is looking for, and it in no means states that movies get killed.

You said:

“Why should the writers not get paid until after the movie breaks even?”

No no no… I totally agree with you here 100%. Writers should get paid for their work, when they do the work. What the Producers are talking about is After-The-Fact royalties that are paid on top of fees for the writers services.

So if a writer is supposed to get $5000 plus a 2% royalty then the writer gets his/her $5000, but then has to wait for the producer to at least break even on the project before the 2% royalty kicks in.

At least that is my understanding of the situation.

“The WGA risk nothing”

How about time and effort? If a director fraks up the movie, why should the writer be punished after working for months (maybe years) on a story or script? Again, the studio chose the script. The script didn’t choose the studio (usually).

Why should the writers not get paid until after the movie breaks even? The studio and producers are the ones who took the script and made it into a movie. They could’ve chose someone else’s script. I don’t think it’s right when they choose the script (it’s not forced upon them) and then say, “Hey, we’re gonna make your script into a movie. We think it’s awesome; but if it bombs… tough shit. You get nothing.” Sure it’s a risk, but so is hiring a director or an actor. Does Tom Cruise not make any money until after “Mission Impossibe IV” makes back its $85 million in production costs?

I don’t offer my services to my job and get paid only if they make money (in the short run anyway). I get paid for going to work and doing a good job. If someone else screws up the overall product, that’s not my fault and I should still get paid.

Maybe I’m not understanding the circumstance or the scenario correctly, but this seems right to me. If I’m wrong, please explain it to me.