Clear the set. It’s back to business as usual in Hollywood.
Members of the Writers Guild of America last week voted overwhelmingly to end the 100-day-long strike that brought most TV and film production to a screeching halt on Nov. 5.
As if on cue, a heavy fog rolled into the Los Angeles area the morning after the votes were in, hinting at the uncertainty that still hovers over the industry. Writers and studios alike are crunching numbers and counting their losses while the future of many shows they worked on are still unknown.
Later this month, the union’s members will vote to ratify the new three-year contract that calls for annual pay raises of 3% to 3.5% and 2% residuals on new media, which includes programming distributed online or on mobile.
Most have maintained that the momentum of mobile television would not be affected by the strike, however it forced much of the programming lineup into reruns as well.
Good news for mobile
Mobile TV providers are elated that a pledge has been struck to end the strike.
“We are quite pleased to see a resolution to the writers’ strike and welcome the defined economic arrangement for new media. This adds needed clarity to the production and syndication costs of our multi-platform, broadband and mobile content. We also are glad to see the writers get back to work as many of them endured personal hardship during the process,” GoTV Networks Inc. CEO Tom Ellsworth, wrote in a prepared statement.
Most opted not to comment on the specifics of the deal, and instead focused on putting the dispute in the past. However, the deal does not address the numerous legal issues that need to be clarified on the mobile side for programming to flourish across platforms.
“There’s definitely a lot to be worked out on licensing and other issues, especially as we move cross-platform on other delivery opportunities,” a MobiTV Inc. spokesman said.
The networks’ mobile divisions are equally thrilled that a deal is in place.
“I’m glad the parties have reached an agreement. I can’t wait to see new episodes of some of my favorite shows on all the networks,” Salil Dalvi, general manager of wireless platforms at NBC Universal, wrote in response to questions.
The WGA was seeking to increase its residual structure for all content, regardless of the platform, to 2.5% of revenues. 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 report from Bear, Stearns and Co. Inc.
The new contract falls short of the 2.5% the writers’ guild was seeking and maintains the 17-to-24-day window that studios have to stream shows for promotional use without paying residuals.
“The strike is over. Our membership has voted, and writers can go back to work,” Patric M. Verrone, president of the Writers Guild of America, West, wrote in a letter to members. “This was not a strike we wanted, but one we had to conduct in order to win jurisdiction and establish appropriate residuals for writing in new media and on the Internet. Those advances now give us a foothold in the digital age. Rather than being shut out of the future of content creation and delivery, writers will lead the way as TV migrates to the Internet and platforms for new media are developed.”
$3B impact on L.A.
The guild told writers to report back to work this week as the Los Angeles economy puts a stop to the estimated $3 billion it has lost since the strike began. More than 10,000 people have been out of work since early November.
“We are profoundly aware of the economic loss these fourteen weeks have created not only for our members but so many other colleagues who work in the television and motion picture industries. Nonetheless, with the establishment of the WGA jurisdiction over new media and residual formulas based on distributor’s gross revenue (among other gains) we are confident that the results are a significant achievement not only for ourselves but the entire creative community, now and in the future,” wrote Verrone and Michael Winship, president of the WGA, East.
“The success of this strike is a significant achievement not only for ourselves but the entire creative community, now and in the future,” Winship added. “The commitment and solidarity of our members made it happen and have been an inspiration not only to us but the entire organized labor movement. We will build on that energy and unity to make our two unions stronger than ever.”
