The MBA: August 2007 Archives

No, Brooks. No.So far, the WGA-AMPTP negotiations have gone pretty much how I expected. Both sides started very far apart, and any perceptible motion seems to indicate a widening of the gap. No one seriously expected a deal to be brokered; everyone’s working under the assumption that the WGA will work past expiration, and the AMPTP won’t really start bargaining until they have to face SAG or the DGA.

Still, that doesn’t mean there’s no room for journalists unfamiliar with our industry to lob Molotov cocktails of fiery ignorance into the breach. Ladies and gents, I give you Brooks Barnes and his artitorial on residuals in the New York Times.

Enjoy the slant. It’s delicious.

SCENE STEALER
In Hollywood, a Sacred Cow Lands on the Contract Table
By BROOKS BARNES

Jasper Johns isn’t paid based on the number of years his flag paintings remain popular attractions at museums. Rem Koolhaas doesn’t cash a check every time an architecture fan takes a trip to Seattle to see his space-age public library. So why should the writers, directors and actors responsible for box-office bombs like “Gigli” be able to pocket some cash every time somebody buys the DVD?

It’s a question that cuts to the heart of the biggest fight in Hollywood these days and sums up a fundamental choice the troubled entertainment industry needs to make: whether to cling to old blueprints for running the business or to draft a whole new set.

Brooks couldn’t make it out of the first paragraph without mangling logic, but I let him run on to the second paragraph, because I really enjoyed how he thinks a question he poses out of ignorance is, therefore, a really important question.

When an author creates a work of visual (or, in the case of architecture, “sculptural”) artistry, he holds copyright as well as certain moral rights (yes, even in the United States). That artist can control the display of that work. However, if the artist chooses to freely display his work, so be it.

If you paint a painting on the sidewalk of New York, and I walk by it, my simple act of looking at your artwork doesn’t infringe on your copyright or your authorship in any way. I’m not copying it, I’m not making a derivative work of it, I’m not destroying it and I’m not exhibiting it.

I’m LOOKING at it.

Hey, Brooks….I’m just looking.

That’s not at all analogous to our circumstance as screenwriters. While we do not hold copyright, we are acknowledged by the copyright holders (the studios) in very real ways as part authors of our works. Those copyright holders exploit our authorship for money.

They make copies of our work of authorship. They make derivative works. They exhibit it for money. And yes, they occasionally destroy it.

Just as an author of a book receives royalties for copies that people can possess, so too should we receive residuals for copies that people can own and enjoy.

Or, to please Brooks, if Rem Koolhaas wants to sell little models of his cool library, the manufacturer should pay him a royalty for every item sold.

Duh.

The spat, as always, is about money.

That’s a nice piece of reductive reportage. It’s a bit like saying, “John Smith awoke to find a strange man in his bedroom, rifling through his wife’s jewelry drawer. The ensuing spat was, as always, about money.”

It’s not about money per se. It’s about our rights and our due as authors of the movies we help birth.

Writers, who started talks with studios last month for a new three year contract, want to be paid the way they always have. Movie script writers get an upfront payment, now at least $1 million for a major film, according to studio executives. Screenwriters then receive a residual whenever one of their titles is put on DVD, shown abroad or otherwise resold. Under the same system, a typical TV series writer may get $30,000 an episode, plus residuals.

If any of you know Brooks, could you please ask him to just call me before he writes about Hollywood again? Movie script writers get “at least $1 million for a major film” now??? Really? Last time I checked, scale was still in the five figures. Yes, there are some of us who get paid over a million dollars for a screenplay…or for all of the drafts required to get a movie made. I’m guessing there are about 150 screenwriters in that club in the entire world. Plenty of movies get made where no writer gets paid more than a million.

The residual payments vary widely, depending on a maze of formulas.

Yes, it’s true. There is a maze of formulas. For instance, in movies, there are two.

Two.

The maze is just…arghhh! Can’t find my way out!

A lead writer might earn hundreds of thousands from the DVD sales of a blockbuster movie; a junior member of a writing team for a dud might get a few thousand or less.

Lead writer? Junior member of a writing team? Brooks, sweetheart…please…talk to a screenwriter before your fingers hit the keys. There are no “lead writers” in movies. There are no “junior members.” We’re not grips. We don’t have apprentices. Either you get credit for authorship, or you don’t. Doesn’t matter how old you are, how much you get paid or how long you’ve worked on a project. All that counts toward credit and residuals are the literary contributions you make to the final screenplay.

Studios want to junk the residual payment structure, which dates to the early 1950s, when the fledgling TV business borrowed it from radio. Under their proposal, unveiled with unexpected zest in early July by Barry M. Meyer, chief executive of Warner Brothers Entertainment, so-called creative employees would get residual checks only after the studios have recouped their basic costs.

Have a cookie, Brooks. You made it through a paragraph without getting anything wrong. Except that “so-called creative employees” really are, in actuality, creative employees. Qualifiers not required.

The two groups have reasonable arguments.

This is what I mean by “artitorial.” Is this an article or an editorial? If it’s an article, then what’s with the opinion? And if it’s an editorial…

…you’re totally wrong.

The other side does not have a reasonable argument.

In coming weeks and months, as both sides start huffing and puffing with even more intensity, the writers will declare that they can’t trust Hollywood accounting as to when costs are covered. They’ll also portray the effort to redraw the residual map as a huge rollback in wages. Young writers in particular will be hurt, they say, because they rely most heavily on residual income from failed movies and programs.

Oh, that crazy huffing and puffing! Through huffing and “portrayal” and “they’ll say” arguments, we’ll manipulate the truth!

Except that it is the truth, and no manipulation is required. Anyone whose brain stem is attached knows that Hollywood profit accounting is a joke. No film is ever reported to be in the black. Every film “loses money.” Every…single…one.

This is fact.

Expect studios to battle back with hard facts on finances.

Ah, but see, Brooks thinks that while we engage in huffery and tricks, the studios have “facts” on their side. Unbelievable.

While almost every project turned a profit when the residual structure was enacted, 6 out of 10 movies today will fail to make money even after they are distributed across multiple platforms, according to the Alliance of Motion Picture and Television Producers. On the TV side, almost 90 percent of modern series fail to make money. Studios argue that it’s ridiculous for a business to pay bonuses before it makes back its initial investment.

I’m going to presume, generously, that the above statistics are absolutely true.

So what? If 10 out of 10 films used to generate an aggregate profit of $100 million, and now only 6 out of 10 films are profitable, generating an aggregate of $900 million, then why should I give a damn? These statistics mask an obvious fact of modern Hollywood: franchises are rarer, but endlessly profitable. In short, you need fewer hits than ever to make a ton of dough.

Oh, and residuals AREN’T BONUSES, Brooks. They’re a negotiated equivalent to royalties. They are compensation for the reuse of works of authorship. They’re not a reward for a job well done. They are a payment for continued exploitation of a property.

Already lost in this tit-for-tat skirmish, say analysts and economists who specialize in Tinseltown’s peculiar business models, is the magnitude of the studios’ decision to simply put the residual structure on the table. The studio bosses probably haven’t figured out the best solution, said Josh Bernoff, a media analyst at Forrester Research, but perhaps for the first time they are insisting that cosmetic tweaks to their way of conducting business won’t work.

Hey, Josh Bernoff…you listening?

You got rooked by a frickin’ press release.

Even the studios don’t believe in this crap. It’s an opening salvo in what will be a very long negotiation. The fact that Forrester is often hired by the media corporations we’re negotiating with (and never by, say, me) may have something to do with their narrow view.

At a time when the likes of Paramount and Warner Brothers are having trouble turning a profit on movies that gross $200 million at the box office and the Internet is rapidly making the concept of intellectual property a quaint notion, the sacred treatment of residuals has an air of unreality, according to some economists.

Ridiculous. Anyone in this business knows enough to know that if you gross $200 million at the box office, you will absolutely be generating profits every single time no matter what the movie is.

Every…single…time.

“There is a good question about why they even pay residuals in the first place,” said S. Abraham Ravid, a visiting professor of economics at Cornell, who recently studied how studios price screenplays differently, based on writers’ box-office track records.

Oh God. And now a floating quote from that great center of Hollywood, the inheritor of Lew Wasserman’s throne, the mastermind behind the movie business…

…Mr. S. Abraham Ravid.

Where do they GET these people? It’s only a good question about why a company should pay residuals if you are:

• ignorant of our business
• ignorant of copyright law
• ignorant of the role Mel Nimmer played in creating the residual structure

Few components of Hollywood’s crumbling business model

Sorry, Brooks, stopped reading after you managed to call one of America’s healthiest business models “crumbling.”

John F. Bowman, chairman of the Writers Guild of America’s negotiating committee, said he disagreed with the sacred part, but that untouchable was fair enough. “These are wages to us,” he said. “They’re not bonuses.” He said he thinks that the studios are using the scary-sounding residual retrenchment to make their real target—using material on the Internet without paying a hefty residual—more palatable.

Arghhh! Bowman, you’re not helping! Residuals are not wages. If they were, then yeah, the companies could argue that “you’re paid too much” and our only argument back would be “no we’re not!”

Residuals are compensation not for labor but for reuse of copyright!

We need to start getting that right…because if we don’t, it’s not likely that the Brooks of the world ever will.