Robert King serves both on the Board of Directors of the WGAw and the WGA Negotiating Committee.  He and I also co-chair the Credits Review Committee, and our friendship is a testament to bipartisanship.

That’s a nice way of saying “We don’t agree on much.”

Still, we agree on a lot when it comes to this negotiation.  I asked Robert to try and outline the specifics of the issues we’re grappling with in this negotiation, because they’re a bit complicated in terms of what we had versus what we want, how we’re currently paid versus how we think we should be paid, etc.

Here’s the email he wrote me, and I appreciate his willingness to allow me to publish it.  It’s a great primer on the details…and as we all know, that’s where the devil usually hides.

Dear Craig,

My personal observation is that negotiations have moved toward a better place.  This might be just a brief respite before Negotiations Armageddon, but for the moment there is dialogue; and dialogue is essential for these difficult new media issues.

Part of the problem of negotiations—and especially this negotiation—is that both sides tend to interpret the contractual proposals and counter-proposals in one way: as an attempt to fuck them.  This is complicated by the fact that sometimes management’s proposals are designed to do exactly that; and sometimes they aren’t designed to do that, but might be used later by less enlightened souls to do that.

So dialogue, in a smaller room, with fewer people, and less of the theatrics of negotiations, allows everyone to discover what wasn’t designed to fuck; or was designed to protect against being fucked by someone else and has only the appearance of a personal fuck; what was inelegantly put; what has unintended consequences, etc.  It’s also a place where language can be designed that satisfies everyone’s fears of being fucked.

In other words, sometimes there is the illusion of being farther apart than we actually are; and smaller side bar dialogue helps us discover if that’s indeed the case.

And then again there is just plain old being far apart.

So, for the moment, during this la convivencia of Negotiation ’07, let’s look at the major new media issues; and see how far apart we really are.

In my opinion, there are four major new media issues.

Electronic Sell-Through

The clearest and easiest to understand is electronic sell-through, or Internet download (sales), or more colloquially the itunes model.  When most writers first started thinking about new media they probably were thinking about this.  Feature writers invariably are always thinking about this—because it is the closest new media issue to the old home video (DVD) model.

Management’s offer on this is still .3 percent: or a third of a cent for every dollar.  Actually to be more exact it’s .36, a little more than a third and a half of a cent.  This is the old DVD formula, or as the WGA calls it “The Royal Fucking.”

The Writer’s Guild wants management to pay 2.5 cents on every dollar.

There has been no movement from either side on this.  The complication here is that there’s no apparent paradigm-shift to get both sides to an accepted number, so a resolution can only be reached through resolve, leverage, and intellectual justification.

Intellectual justification is never completely irrelevant in negotiations, but it’s mostly important only as a way to buttress resolve and leverage.

We writers clearly, in my opinion, have the winning argument here.  The old home video formula was sold to the writers as unique from television residuals and necessary because of all the added packaging and manufacturing costs that came with creating VHS tapes and later DVDs.  Well, of course, there is no equivalent packaging or manufacturing costs with download sales, so management, for the moment, seems to be left with the argument that they want it because, well, they want it.

Advertising-Supported Streaming

More complicated and interesting is the issue of ad-based streaming.  Streaming, by the way, is when media is transmitted to your computer while you watch it.

You can currently find all sorts of TV fare on network-owned websites that allow you to catch up on last night’s LOST or discover a new show like BIONIC WOMAN for free.  Management has embedded commercials into the viewing experience, which is where they make their money.

This is probably the most angering issue for TV writers because of the hypocrisy of management’s original contention.  Management believed they could call these usages of TV and features “promotional”—even when there was advertising attached—and therefore pay no residuals to writers.  This hypocrisy has a financial impact on writers, of course, because the value of an episode is limited; if a network could immediately stream an episode of TV on their web site, they wouldn’t necessarily need to rerun that episode on TV; and therefore the writer could be out the $21,078 a network must pay for a one-hour rerun.

Management has since retooled their “fuck-you-it’s-promotional” offer by making a new proposal which asks for a promotional window of six weeks—during which they could stream the show for free with ads and not pay us.  After these six weeks, they would offer a fixed residual for unlimited reuse during the rest of the year.

This fixed residual would be 1.2% of the current network residual rate (just a reminder, that rate is: $21,078 for a one hour drama; $11,596 for a half hour comedy)—so, in the case of a one hour drama, management would pay $252 and 94 cents for unlimited streaming during the first year; and, in the case of a half hour, $139 and 15 cents.

Now, of course, the numbers are abysmally low—especially if you worry that a year of unlimited streaming might take the place of a network rerun (that’s a loss of over $20,826 for a one-hour writer); but I tend to take management at their word: that this is an initial lowball, and they’re giving themselves room to maneuver.

The Writers Guild has returned with a proposal that takes the framework of management’s fixed residual offer, but proposes that the percentage (again, based on the current network minimum) rise with any increase in number of streams.  The web sites have to keep track of number of streams for their advertisers, so the Guild proposes that that calculation be used to make the fixed residual rise with more and more viewers.

This seems eminently fair because HEROES will have more streams than, let’s say, JOUREYMAN; and yet HEROES shouldn’t have its value undercut by a residual cut from JOURNEYMAN’s cloth; and JOURNEYMAN shouldn’t be priced out of the streaming market by something fashioned for HEROES.

One other thing: features have tended to be overlooked in this streaming morass.  Management is still insisting on free “promotional” streaming use of movies.  I intentionally put “promotional” in quotes, because management is again suggesting they can embed commercials and make money from streaming entertainment and still call it promotional.   My guess is everyone is working on TV first, finding the magic formula, then we’ll all turn to features.

Subscription-Based Streaming

Subscription-based streaming is exactly what it sounds like: a Netflix-like service in which the consumer would pay a monthly fee for unlimited streaming views of product.  This is where things might get easier because the Guild already has a definition on Internet rental.  This was an achievement during the 2001 contract battle.   But we will see.

Made-For-Internet

And the last sticky issue is made-for-Internet.   This has two components.  One is derivative works.  These are shows that are spun off from current television shows: for example a ten minute webisode based on the show LOST or HEROES.

Then there are original works.  One of the fears and expectations of writers is that the more technology converges, the more the Internet will become the new TV, and therefore no contract can really go forward without insisting that minimums, and pension and health, be extended to original Internet programs.

Currently management is only accepting that minimums and Guild coverage be applied to derivative works—that is the spin-offs of current TV shows.  The offer is fairly low ball, and not really worth going into at the moment, because it’s management basically just putting their toe in the water.

The bigger worry is if management is insistent on not granting Guild jurisdiction for original Internet content.  That could get messy.  The Guild can’t really be complicit in its own suicide; and that’s pretty much what giving up Internet jurisdiction would amount to: a gradual suicide.

There are other issues—like jurisdiction in reality TV, animation, separated rights—which I haven’t gone into, mostly because I can’t speak with much proficiency about them.  That doesn’t mean they aren’t important; and other negotiating committee members could speak with great conviction.

As for new media, all the issues are difficult and, to use high school term paper talk, multifaceted.  But it does seem, to me, that management is taking the spirit of their “New Partnership” talk seriously—even if there is still the negotiations necessity of offering crazily lowball numbers.   We’re talking.   That’s a good thing.

Best,

Robert King

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