Strike Talks Inch Forward
Writers present counter-offer on streaming residuals
The snail's pace of the talks, which have been whipsawed in recent days by reports of breakthroughs only to be set back by mutual recriminations, underscores the complex issues surrounding the big divide: How writers are to be paid for the use of their work on the Internet.
It also points up the sometimes conflicting agendas of the major Hollywood studios and their corporate parents, which have different priorities based on the emphasis of their various businesses. That, in turn, slows down the ability to reach a quick unanimity, as required by the rules governing the Alliance of Motion Picture and Television Producers.
On Tuesday, the Writers Guild of America responded to last week's studio proposal on streaming shows online with a tiered compensation system based on how often a show is viewed. Streaming is the free delivery of programming online.
Writers rejected the studios' proposal of a single fixed payment of less than $250 a year for reuse of an hourlong program. Instead, the guild proposed a sliding scale by which in the first year they would fetch $632 for the first 100,000 views, with pay rates increasing at each 100,000 views thereafter. After the first year, writers would get a residual based on 2.5% of the revenue collected by the show distributor.
The writers proposal prompted detailed discussions Tuesday with studio negotiators, though they didn't result in any resolution. The parties also did not discuss any of the other issues that divide them, including how much writers should be paid for shows that are sold online or created for the Internet.
Nonetheless, two people close to the guild's negotiating committee said they felt encouraged. "It felt like the beginning of a negotiation," said one. The alliance said it was studying the WGA's proposal and "look[ed] forward" to continuing negotiations, set to resume today.
Until now, the two sides have been engaged in intermittent and abbreviated negotiating sessions that many viewed as dysfunctional and highly unusual.
Though they began in July, negotiations didn't get serious until Nov. 4, the day before the writers strike. Negotiations resumed last week as both sides faced mounting pressure to get back to the table.
But just when Hollywood thought a deal might be close, the parties broke off talks Thursday and didn't get back to the table until Tuesday. Studio executives said they wanted to keep talking through the weekend, and they blamed WGA officials for stalling. Guild officials said they needed time to evaluate the studios' streaming offer.
Several veteran executives say it's odd that the parties haven't been negotiating around the clock, as they normally would given the high stakes. If the strike lasts much longer, virtually all scripted television production will shut down.
"This laissez-faire negotiations approach is very unusual," said one former studio executive who has been involved in numerous labor disputes. "What I don't feel is a sense of urgency on either side."
Many are hoping Tuesday's session will create momentum to get a deal done by the holidays. In an open letter to the industry, the alliance warned of the need for a speedy deal.
"What we have witnessed so far is just the tip of an iceberg of economic dislocation if an agreement cannot be reached before January," the alliance said.
The letter also struck a conciliatory tone. "Ours is not a take-it-or-leave-it offer," it said.
Guild leaders also have toned down their rhetoric. Last week they dismissed the studios' proposal as a "massive rollback" that was worth only $32 million a year, far below the $130 million the studios claimed. The studios said their proposal was based on residual payments for new media as well as increases in minimum pay rates for TV and movie projects, among other things.
On Tuesday, in an e-mail to guild members, negotiating committee Chairman John F. Bowman reiterated the large discrepancy but added: "We greet their public willingness to make such an offer with real interest. ... If the [alliance] is serious about this figure, the WGA is confident we are closer to a deal than anyone has suggested."
Further delaying the talks has been the complex makeup of the major studios -- whose corporate agendas don't always put them on the same page -- and decades of old bargaining rules they operate under.
Since its founding in 1982, the alliance has required its 11-member board to make decisions under a "rule of unanimity," with each member having veto power.
Achieving unanimity was much easier two decades ago, during the last writers strike, when studios had much more in common. Their businesses have spread beyond the days when they were all solely film and TV operations. Now they are also involved in cable, music, the Internet, publishing, theme parks and video games. And what's good for one company may not necessarily benefit another.
Moreover, the issues at the center of the current dispute -- pay for work distributed across new media -- are uncertain. No one knows for sure how much revenue will come from various new technologies transforming Hollywood.
Though they are broadly united on the need to protect future sources of income, studios have different priorities based on their various businesses. For example, Sony Pictures is primarily a movie studio, and though it produces TV shows it does not own a network. Hence, streaming of TV shows is less of an issue for Sony than are residual payments for movies sold online.
However, streaming is a hugely important issue for the five networks, which view the Internet as a key way to promote their shows and lure younger audiences. The networks are owned by major conglomerates such as Walt Disney Co., News Corp. and General Electric Co., parent of NBC Universal.