Television just isn’t the same these days. The writers’ strike in Hollywood, now in its ninth week, has given millions another reason to turn off the tube. Unless reruns and reality TV are your thing, the TV set has essentially become a content wasteland where late night and scripted TV shows are nearly absent altogether (well, except for sports programming).
It’s too soon to determine how the strike will affect the momentum wireless carriers and content providers are experiencing with the growth of mobile TV services. But the Writers Guild of America argues it is fighting for big stakes in the emerging new media space. That umbrella term for the newest forms of distribution, including mobile TV services, is the name of the game-and largely considered the future-for TV, and writers understandably want to secure their slice of that action going forward.
Impact on mobile TV
It’s difficult to argue that the dispute between the WGA and the Alliance of Motion Picture and Television Producers is having no impact on mobile television. While most mobile TV service providers and networks either decline to comment or brush the strike aside as a minor nuisance, those in the industry who don’t get their paychecks from a major entertainment company see things somewhat differently. But, it’s not all crash and burn either. The impact is nuanced and relatively unnoticed by most.
“In the sense that mobile television content is re-purposed, yes, there will be some impact,” said Karen Allen, general manager of Mobile Entertainment Forum Americas. Indeed, she believes most viewers that get fed up with the lack of content on TV will turn to the Internet first, primarily because it’s more in sync with their existing behavior.
As for mobile becoming an alternative platform for those viewers, the medium is clearly waiting for them with open arms. Overall, Allen estimates that around 1 million users are being added to mobile video services each month. “We are seeing great increases in all of that,” she said. Still, she believes there are enough mobile content providers to fill the slots for the likes of MediaFLO USA Inc., MobiTV Inc. and GoTV Networks Inc.
Adoption numbers could increase substantially if a mobile video superstar were to emerge during the strike, she said. Little else could generate so much fanfare and drive newfound interest in the medium, she added.
The latest numbers from M:Metrics Inc. indicate that for the three-month average ending in October, 3.2 million subscribers watched program video while 1.6 million watched broadcast video.
“(The strike) is of tertiary consequence when it comes to mobile video,” said Kanishka Agarwal, VP of mobile media at Nielsen Mobile. “Mobile video is seeing pretty rapid growth. The key thing that’s keeping it from being a mass phenomenon at this point is price.”
Following price would be the quality of service, and finally after that, comes programming and content, Agarwal added. On mobile, people are really expecting to see an extension of the programs they already watch at home anyway, Agarwal said. With choices diminished at home, few consumers would be surprised to find the same gaps in programming on their mobile phones.
Writers’ perspective
“Our goal is to facilitate the work of our members being available to all platforms. The writers guild is platform agnostic,” Charles Slocum, assistant executive director at WGA, said in an interview with RCR Wireless News.
“We look at mobile as a place where people can get a start that couldn’t find a path on traditional media,” he said. Calling the mobile platform a “little more nimble, open to experimentation,” Slocum said he expects it to be “fertile ground for developing new talent.”
One of the major issues in the WGA’s proposals is to secure writers’ stakes in their talent if and when it makes its way onto a platform it wasn’t originally created for. “We believe that those provisions are very important for creators,” Slocum added.
The deals in mobile “tend to be more favorable to the creative talent because the creative talent is more likely to own the rights to that talent,” Slocum said.
The numbers
The WGA is seeking to increase its residual structure for all content, regardless of the platform, to 2.5% of revenues. Furthermore, the guild doesn’t care if the content is ad-supported or paid for by consumers.
“The official view of the guild is we don’t care,” Slocum said. “Our goal is to have consistent provisions that pay the writer the same way, regardless of whether the consumer pays or if an advertiser pays.” Although the WGA believes its current contract already covers payment for ad-supported content, the reality is that most studios and networks are not paying those fees. Some are, but most aren’t, Slocum said.
As it stands now, content purchased by consumers for short-term use brings the guild 1.2% of revenues while content purchased for long-term use carries a guild fee of .35% of revenues, according to a recent report from Bear, Sterns and Co. Inc. The guild is seeking to increase all residuals to 2.5% of revenues, regardless of who pays for it and where it’s used. “We want to simplify the contract,” Slocum added.
During the latest negotiations, which broke down Dec. 7, the AMPTP offered the WGA a one-time $250 flat fee for unlimited streaming over the course of a year, following a six-week window of free streaming. Additionally, AMPTP offered to continue the current residual structure for paid content.
The WGA’s complete proposal to the AMPTP amounts to $151 million over the next three years, Bear, Stearns calculated. At least 81% of that comes from “non-traditional” re-use, it added.
“The delta between what the writers are asking for and what the studios are offering is a maximum about $120 million, despite reports that the two sides are roughly $20 million apart,” the firm concluded in its report. “From Wall Street’s perspective, we estimate the impact of accepting the WGA’s proposal is largely negligible.”
The firm estimates that the $120 million figure would impact less than 1% of annual earnings for the media companies. Many industry watchers have noted that the studios are likely most concerned about setting a precedent in new-media revenue sharing. The Directors Guild of America and Screen Actors Guild both have contract negotiations coming up in 2008, and you can bet they’ll be looking for similar concessions from the AMPTP.
However, with no end in sight for the strike, networks have begun to suffer major financial drawbacks. Earlier this month, networks began reimbursing advertisers after failing to reach required ratings before the year’s end.
Fresh ideas emerge
With so much uncertainty in the air, some film and TV writers are now negotiating with venture capitalists and other investors to develop their own Web-based distribution channels while completely bypassing the Hollywood studio system. Some expect new companies to be formed in the coming months that could include everything from privately owned studios to new distribution channels.
Still, other deals are being reached in Hollywood that could very well put more pressure on the WGA to scale back on its demands. Most of the late-night TV shows are expected to go back on air next week without writers while David Letterman’s production studio is holding standalone talks with its writing staff to strike their own deal for a return with writers in tow.
The decision to come back without writers has clearly not been easy. When Comedy Central announced that “The Daily Show with Jon Stewart” and “The Colbert Report” would be back on air Jan. 7, the two issued a brief statement that made hay out of an otherwise woeful situation: “We would like to return to work with our writers. If we cannot, we would like to express our ambivalence, but without our writers we are unable to express something as nuanced as ambivalence.”
Since writers walked off their jobs Nov. 5, more than 10,000 people have been out of work.
