Understanding The Coming Hollywood Strike

Strike-ImageOver the past few months we’ve been dropping mention of the big coming Hollywood strike, and I think it’s time to talk about about it specifically, what’s happening, why it’s happening, when it’s happening, who is involved and what the issues are. I hope this will make things a little more clear… to be honest I’m not 100% clear on all the issues myself… but one thing is for certain… come June 2008, the streets in Hollywood will be silent. Ok, let’s take a look at this horrendous mess shall we?


Alliance of Motion Picture and Television Producers (AMPTA)

The Writers Guild of America (WGA)

The Screen Actors Guild (SAG)

The Directors Guild of America (DGA)


The current collective contract of the WGA runs out on October 31st. However, the Writers Guild has decided to postpone taking any action until the collective contracts of the SAG and DGA also run out in June of 2008. This is CLEARLY a co-ordinanted move in order to give all three unions a stronger bargaining position and leverage. Therefore, for all intents and purposes, the agreements that currently exist for the WGA, the SAG and the DGA will expire at the same time… JUNE 30th 2008. At this point, all three entities can (and will) call upon their membership to strike unless new agreements are reached before that date.


The issues between the AMPTA and the WGA BASICALLY break down like this:

1) The WGA wants provisions for internet distribution in any new contract

This is understandable for the WGA to want. As things stand, Studios are selling their product through the new medium of the internet for which there are no provisions really in the current contract for writers to be compensated for. However, the AMPTA is wanting to put off the issue of the internet for 3 years because “it’s a new avenue” and they’re not clear how it will work. I can understand their apprehension to commit to something that may just die in 18 months… but at the same time there is no denying they are making money off the internet right now… and therefore it is totally reasonable for the WGA to want their agreement to cover that NOW instead of 3 years down the road.


2) The AMPTA wants to withhold royalty payments until the Studio makes back its investment

Under the current agreement, royalties are paid on project right away. The AMPTA want to change this to a more fair system where royalties only begin to be paid out after a project has recovered its investment. In other words, if a movie cost $53 million to make, then royalties on that movie will only be paid out after the producers have made back their initial investment. This is totally reasonable and the way things should be. Those who risk are the ones who should reap the rewards. The WGA risk nothing, and therefore it is reasonable that a Producer should at least make back their investment before handing out additional royalties. This would mean a serious thrid party accounting system would have to be put in place to protect the WGA from studio accounting misconduct, but it is still the right way to do thing nonetheless.


3) The WGA want reality and game show writers covered under the new agreement

This one is absolutely ludicrous and I’m not going to waste any time writing about it.


There are other issues, but from what I understand these are the BIG contentious ones. Obviously item #3 doesn’t apply to the DGA or SAG, but you can bet they are also looking at items #1 and #2. I’m unclear right now what additional issues the DGA and SAG will bring to the table.

So there you have it. Doomsday in Hollywood right now is June 2008. Unless an agreement is reached (and i seriously doubt there will be) all productions have to be at least in post-production by that time in order to have any hope of finishing. This is why no Transformers 2 plans have been made… this is why they’re quickly moving Wolverine into a November shooting start date, and this is why we’re hearing (like Pompeii) about movies getting killed because they were looking at shooting schedules into or after June 2008.

By no means am I an expert on this issue… so if you have more to add that is relevant to this topic, please include it in the comments.

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22 thoughts on “Understanding The Coming Hollywood Strike

  1. I’m a WGA member (and one of the people striking on Monday)… Let me try to clear some stuff up, at least from my POV and to the best of my understanding.

    There are a lot of unresolved issues on the table, but the main two issues, IMO, are (1) DVD residuals and (2) New Media (basically Internet)

    DVD: Current residual formulas come to about FOUR CENTS per DVD. Yes that’s right. When you buy a DVD, the writer gets 4 cents. In comparison, about THIRTY cents go to the company that presses the DVD. This formula has been around since the days of VHS, when writers bought into the studios/network’s argument that home video is an “untested market”, agreed to the formula, and have resented/been screwed by it ever since. The problem is that when the formula was first set up, the companies argued that home video could wipe out, that VHS tapes were really expensive to make, etc. But then two things happened. (1) Home video became a runaway success. (It’s currently where studios make the majority of their money, esp. now that they’re releasing old TV shows, etc. In fact I’ve heard that theatrical releases of movies are now basically advertising for the DVD release) and (2) DVD replaced VHS. DVDs, as you know if you’ve bought blanks, cost almost nothing to make compared to tapes. Ie, the costs of manufacturing went down in 25 years. Unfortunately, the writers formula never changed in that period, and the writers still make… four cents. The writers are currently asking for about 8 cents per DVD.

    Issue #2, “new media”: Again the companies are arguing that this is an “untested” medium. Everyone knows it’s going to replace DVDs eventually, but the AMPTP (ie, the companies) are saying “no, it’s too new. It’s untested. We can stream online, we can sell online, but we can’t really pay yet”– sound familiar? It’s the 80s all over again. So when you watch streaming TV episodes on the Web today, the writers typically aren’t getting ANYTHING. Even though you may have noticed these videos are usually advertising-supported. Meaning the companies ARE getting paid. Jon Stewart made this point well on his last show.

    The companies have offered to use the DVD formulas for shows PURCHASED (as opposed to streaming) by customers online. They call this something like “online DVDs” or “online DVD sell-through” This is the equivalent of spitting in the writers faces, as the writers have been pissed about the DVD “home video” formula for 25 years. Totally unacceptable. Using this formula, the studios would pay the writers like four cents for an online download even though the studios’ costs to deliver to the customer would be practically zip.

    One last bit on the Internet. From what I’ve been learning, the current negotiating proposal from the companies is that “promotional” streaming to customers not pay the writers anything…ever… even if the “promotional” streaming is showing the entire show/movie AND even if the companies DO make money (such as via ads). In other words, they reserve the right to show ad-supported free streaming of shows online and pay the writers zip. Or looked at another way, they could move their entire networks to online streaming, still supported by ads, and the writers would make nothing.

    What this strike is really about: According to the company’s proposals, writer’s residuals for TV would disappear as content moves from broadcast to online. Current TV residuals would disappear to zero online residuals. (Residuals are the payments writers currently make that– for most writers– allows them to live in between gigs.)

    The issue mentioned above about writers not making money until the show does is totally a non-starter. Whether a show makes money or not is (1) subject to stuff like scheduling, advertising, editing, casting, and a million other things that the writer has nothing to do with, and (2) Hollywood accounting does not have the best reputation, as anyone who followed the lawsuits over Lord of the Rings, which supposedly made no money might know. I also heard that the “Simpsons” is officially a money-losing show. Yeah, right. It’s funny how many of these companies tell their investors “Our industry is doing great! The Internet is the future!” and then tell the writers “Oh we’re doing terrible. The Internet is untested and could go away.” Puhlease.

    I’m not a particularly active WGA member or anything, so the above is all to the best of my understanding. I recommend you check out http://www.unitedhollywood.com for some writer blogs or the WGA (www.wga.org) for more info.

    Blah. Sorry for rambling, but I guess that’s what editors are for ;) Hope this helps.

    A WGA member

  2. I love how the reviewers only example of a movie getting rushed is Wolverine, because we all know that would of been a masterpiece if it wasn’t.

    Transformers 2, a huge blockbuster CGI spectacle, taking its sweet time? This surely never would of happened if there were no strike.

    Pompeii and a “bunch of other movies” getting killed? Why would they be put down over a strike? Shelved is the word that he is looking for, and it in no means states that movies get killed.

  3. I’m not sure where you got your information, but TV Games show writers – at least some of them – are covered under the WGA. And you can’t write for certain games shows unless you are a member of the WGA.

  4. Most TV shows will probably wrap up their filming before the stirke too, Melbye. Even game shows get taped in a short period of time, and then broken out to be aired. Some shows, like SouthPark and live shows do things during the season, because they want to stay relevant to current events, but dramatic series like Heroes and reality shows like Survivor are filmed in a short period of time compared to the length of their season.

  5. I am actually more afraid of what this strike does to tv-shows than movies. What if they went on strike in the middle of the season, then a show would just stop before the seasonal storyarc was even resolved. But since this strike isn’t happening intil June this luckily won’t be a problem, if i understand it correctly

  6. Hey Drew,

    You said:

    “Why should the writers not get paid until after the movie breaks even?”

    No no no… I totally agree with you here 100%. Writers should get paid for their work, when they do the work. What the Producers are talking about is After-The-Fact royalties that are paid on top of fees for the writers services.

    So if a writer is supposed to get $5000 plus a 2% royalty then the writer gets his/her $5000, but then has to wait for the producer to at least break even on the project before the 2% royalty kicks in.

    At least that is my understanding of the situation.

  7. Also, I’m not sure this is totally accurate either:

    “The WGA risk nothing”

    How about time and effort? If a director fraks up the movie, why should the writer be punished after working for months (maybe years) on a story or script? Again, the studio chose the script. The script didn’t choose the studio (usually).

  8. I’m no expert, but not sure I entirely agree with you on issue #2…

    Why should the writers not get paid until after the movie breaks even? The studio and producers are the ones who took the script and made it into a movie. They could’ve chose someone else’s script. I don’t think it’s right when they choose the script (it’s not forced upon them) and then say, “Hey, we’re gonna make your script into a movie. We think it’s awesome; but if it bombs… tough shit. You get nothing.” Sure it’s a risk, but so is hiring a director or an actor. Does Tom Cruise not make any money until after “Mission Impossibe IV” makes back its $85 million in production costs?

    I don’t offer my services to my job and get paid only if they make money (in the short run anyway). I get paid for going to work and doing a good job. If someone else screws up the overall product, that’s not my fault and I should still get paid.

    Maybe I’m not understanding the circumstance or the scenario correctly, but this seems right to me. If I’m wrong, please explain it to me.

  9. Hey John,

    Thanks for clearing up what all those abreviations mean. Because if you hadn’t, I would’ve just fealt like I was reading the alphabet all mixed up. haha. I mean, I love movies, but that doesn’t mean I am suppose to know what all those organizations are, right. hahaha. anyways….

  10. Hey Alex,

    I don’t think you’re wrong… that’s why I put this in my post:

    “This would mean a serious thrid party accounting system would have to be put in place to protect the WGA from studio accounting misconduct, but it is still the right way to do thing nonetheless.”

  11. The problem with the AMPTA withholding royalty payments until they make a profit is that we know the shady way that hollywood does their accounting, so therefore, no one would get a penny because they’ll claim the film hasn’t turned a profit. Just look what happened to the writer of “Forrest Gump.”

  12. As one who had worked in “The Industry” for almost 8 years, I can tell you that what “writers” on reality shows do, and what actual screenwriters do are two totally different things and don’t deserve to fall under the same name.

    Reality writers do work hard. But;

    This is nothing more than a posturing move on the part of the WGA to try to increase their influence and power. By having sway also in the realm of the lucrative Reality TV genre, they would radically increase their influence and leverage against the Producers Association.

    I’ll One Hundred Percent guarantee you the Producers Association will Never, and I mean EVER agree to this. Never. Nor will the DGA or the SGA stand by them if the other issues John pointed out get resolved.

  13. Yeah, I actually have a step cousin who is a writer for one of the reality shows that’s out, Intervention on A&E. Anyways, even though he gets credited as a writer, he spends much of his time reviewing tape. It’s a complicated variation on being a writer. Instead of taking a “treatment” of a movie/movie idea and fleshing it out into a script, they have to use hours of video tape to formulate a script. They’re different than editors because they ARE still making the story as they go. They may be guided in certain directions because of events that happen on tape, but it is not that different from being guided in certain directions because the treatment or director wants you to go in that direction. Kevin Smith tells the story of how he was writing a script for a Superman movie and the director wanted him to include a Giant Spider. Kevin didn’t want a spider, but he was guided by the director. The writers on the reality show have just as much flexibility with their video. Are they editors? No. They don’t actually take the scenes and fit them together and they don’t even pick out the exact scenes and angles to use. The Editors do that. The writers write out how the story will be told using the available footage. The Editors actually have to go through and find the exact pieces of video that will fit together to tell the story that the writer had put together.

    The reason they have writers is because they will actually go through revisions of the script before it is approved. Even though the footage is already shot, it’s not simple for them to put it together one time and be done. The writers have to tweak and make changes until the director or even producer feels that the episode will be compelling enough. Then the editors actually get to work on finding the video to make it work. This is part of the reason why they have so many cameras involved in reality shows. We all know they need to be there to “get the shot”. The trick is, half the time, the cameramen don’t know that they “got the shot” until way after they recorded it, because it’s not known what will be used and what will be discarded.

    I’m going to relate this to casting. Most times, when an actor is being cast for a role, the role already is written, and they are trying to find an actor who fits the role. But other times, a big name is wanted to draw attention and after they find the big name actor that will sign, it is then that a role will be written for that actor. In this example, you can see that sometimes, the role exists first, just like in regular TV and movies, the script will exist first. The actor is hired to fill the role, just as the video is shot to fill the script. In reality TV, the video exists first, just as when an actor might be hired first. Then a script is written to hold the video, just as a role would be written to fit the actor. Was there still a casting crew? Yes. There was someone(s) to figure out which big name to hire. It there a writer? Yes. There was someone(s) to figure out how to write the script.

    I hope this helped clear it up for you, John.

  14. I know this has been said, but Reality TV writers do a hell of a lot of work and deserve to be included in the bargaining agreement. A writer (in my opinion) is someone who puts ideas down to paper, for directors and actors to express. Reality TV show writers definitely fall under that description as they are are constantly, often through the life of a show, writing and putting ideas down for the directors/actors(more performers, actor’s implies some sort of standardized skill) to express. I have worked on a handful of reality tv shows and have seen ENTIRE story arcs and conflicts between “reality stars” mapped out and storyboarded in the writer’s office. Granted, the writers are often taking cues from the producer, but they are still essentially writing down a script for the performers to play out.

    I think reality TV’s terrible reputation really cast a shadow over all those who are involved in it. Just because the people on them are often talentless and attention-craving hacks, doesn’t mean that the people putting on the shows are of the same breed. Those shows are rated highly for a reason.

  15. Actually the writing that story editors do on reality shows is monumental. They comb through hundreds of hours of tape trying to find stories and way to jigger votes and audience opinions one way or the other.

    While I’m not entirely sure that their job description should fall under “Writer” using the strictest definition (maybe Editor?) they do have a right to be compensated on the same level as their counterparts on the fiction side of the table.

  16. Hey Alfie

    I never suggested writers for reality tv or games shows shouldn’t get paid. But to suggest they should be counted, covered and compensated in the same manner that actual screen writers do is just nonsense.

    While I agree some “manipulation” obviously occurs on reality tv shows… there is a world of difference between that and what real screenwriters do.

  17. why shouldn’t reality t.v. writers get paid?
    if anyone truly believes that reality shows are real and that there is no scripting then i have a bridge to sell you…….

  18. Great article John. I’ve actually been wondering about all this. All I’ve known up till know is that a strike was coming, but I didn’t kow who or why. Thanks!

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