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Striking Writers Point Out Viacom Hypocrisy; Claiming Online Video Is Worthless While Suing YouTube For $1 Billion

from the wave-or-a-particle? dept

Thu, Nov 15th 2007 8:41pm — Mike Masnick

While I tend to agree with Tim Lee's comments about why the Writers Guild strike is misguided (and the guild itself is increasingly obsolete), it is rather amusing to see the hypocrisy of the studio bosses, claiming that they won't pay the writers anything for the use of their content online because there's no money online at the very same time that they're suing YouTube for $1 billion, claiming they need to protect their valuable online content. Boing Boing points us to an amusing video by some of The Daily Show's writers highlighting this contradictory stance:

Of course, while it's easier to feel sympathy for the writers (and very, very, very difficult to feel any for the studios), the studios are correct that the content is promotional (and they're wrong when they sue for $1 billion). Just as most people aren't paid extra every time a product they helped create gets sold, the writers are only asking for trouble if they really do want residuals for every use of the content they write. It's the same thing that's caused the problems the entertainment industry faces in the first place: the ridiculous demand that every time any piece of content is used for any purpose that money must change hands. The writers are paid by the studios to write content. If the studios are making more money by creatively promoting the shows, then they can start to pay the writers more. But setting up a system where every use requires payment is simply perpetuating the problems the industry is facing and will make it harder for the industry to adjust to the rapidly changing market. While we'd all like the writers of shows we like to get paid well, setting up a system that will cripple the overall distribution of the content won't do them any benefit. It will just open up avenues for other, non-TV, content to take their place.

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Filed Under: promotional goods, writers strike

28 Comments

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Pi, 15 Nov 2007 @ 8:52pm

While I normally agree with you here at Techdirt, I feel that I should point something out; the writers don't want money ever time their content gets used. They want money when someone makes money off their content. That is, if someone uses their content to make money, the writers want a percentage.

So it's not every use. It's use that makes money.
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Pseudonym, 15 Nov 2007 @ 9:02pm

Yeah, I agree with Pi here. If a show is being shown in its entirety WITH ADVERTISEMENTS, it's not promotional any more than free-to-air TV is promotional. When a DVD is sold, the studios make a handsome profit.

Having said that, I think that one approach is clear: Many established writers are simply leaving the studio system, since the television is no longer the only (or the most profitable) conduit. Most modern TV writers write not for the television, but for the box set, and you don't need access to the airwaves or the cable channel to do that.
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Anonymous Coward, 15 Nov 2007 @ 9:02pm

Screw the striking writers and their "oh, we're not getting money from internet distribution" crap.

First of all, shut the fuck up -- you get paid to sit on your ass and WRITE SHOWS FOR A LIVING. There are people who would kill to have your job. And while we're on it, I don't have any particular respect or romanticism or sympathy toward "starving artists". You are the one who wasted your college education on an art degree and decided that playing with fingerpaint for a living was more important to you than a real job making real money. If you can't survive painting and drawing pictures, then go get a real degree and do real work. You have to decide what is more important to you -- a half million dollar house or a job that you love to do.

Most importantly -- who cares about your royalties online?! I write software for a living. Very expensive, mission-critical software that hundreds of millions of people around the world use. My company pays me a salary. I don't get paid every time my company sells another copy of this software.
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mrshl, 15 Nov 2007 @ 9:21pm

Anonymous, you don't get paid every time software is sold because, like all other coders, you lack market power. Writers are a select bunch, and they're striking because they CAN. They are hard to replace. and being in a union tends to further distort their market power.

On the other hand, there are so many coders you couldn't unionize if you wanted to. Live with it, crybaby.
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Anonymous Coward, 15 Nov 2007 @ 9:40pm

He writes software that HUNDREDS OF MILLIONS of people use. Hehe. Thats good.
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Kimota, 15 Nov 2007 @ 9:48pm

Not going to rise to anonymous' bait. Too easy.

But the analogy of not being paid for every product sold is not correct. A better analogy would be if your company hired you to design a piece of software and paid you for exclusive US marketing rights to that software, and only the US rights. Then they sold it in Europe without renegotiating the contract with you.

The studios are exacting commercial benefit for uses of the product outside of the original financial contract with the writers - hence the dispute.
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DML, 15 Nov 2007 @ 11:15pm

In the end, any strike is about how much leverage the strikers have. They can talk about the hypocrisy of Viacom, but it's an irrelevant appeal to the public's sense of justice. Strikes are only about leverage. Writers had little in 1988 and far less now.
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Max Powers, 16 Nov 2007 @ 12:51am

Why not negotiate?
The thing about strikes these days is I feel they are not necessary like the days of old. There is no reason why they could not have kept working while negotiators from both sides continued meeting.

In this day and age, how can you come to a complete stalemate?
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Davd, 16 Nov 2007 @ 12:57am

mrshl, I don't know about what programing "Anonymous Coward" you replied to does but your comment "there are so many coders" is only a 1/2 truth. You don't pay people 50K-80K a year for a job that is easy to fill. Thats what a programmer gets paid if he/she is good at some type of specialized programing.

Kimota, your hypothetical hiring people to write for geographical area is way off base. Code written for one project can even be used in libraries for even a different project all together, and still you do not get any royalties.

One more thing against programmers is even their very own ideas are bought off them with no chance of royalties. You can come up with an algorithm that may get patented, and then you can not even use this concept if you are working for a different employer writing new code.

So with these realities in what goes on with the programing world, it makes the TV writer's clam look a bit more over board. Most design jobs there are no royalties.

Heck even rock stars can have worse contracts.

(pardon this is badly written I'm 1/2 falling a sleep as I type)
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Anonymous Coward, 16 Nov 2007 @ 5:23am

The US media industry lives in a world with NO competition just like the US steel industry did in the 1950s.

The writers strike is remembrance of the steel strikes of the 50s and 60s and will produce the exact results outsourcing.

With virtually free transportation of product and a infinitely smaller fixed facility base and labor cost outsourcing will only translate into internationalization of US culture and the demise of Hollywood.

Considering the low level of morals, ethics, and thought that go into Hollywood productions which are then used to siphon excessive levels of resources from the rest the World’s economy while focusing on a very narrow view of California this transformation is long over due.
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Osama bin Laugh In., 16 Nov 2007 @ 5:53am

Who needs 'em ... get rid of 'em.
If the writers want to strike, get rid of 'em ... and outsource to a third world country. We could then get our content with a new "taste".

Imagine some of your favorite shows with a Hindu or Muslim twist to the humor. Even better, just import foreign made films and dub them ... I can imagine how much a southern US redneck would enjoy watching a Bollywood classic where the hero and heroine singing, dancing, and chatting in Hindu, ... or maybe a Korean version of Laugh In.

Who knows, perhaps it would even help the xenophobic US to wake up to the fact there is a real world out there ... instead of the fake one they see on TV and in movies.
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Anonymous Coward, 16 Nov 2007 @ 6:20am

Re: Who needs 'em ... get rid of 'em.
Wow that was almost clever.
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Peter, 16 Nov 2007 @ 6:23am

You'd Think
Having seen more than a few news bits about the strike it amazes me that - since these are writers - they could come up with a whole lot more clever picket line chants and slogans besides What do We Want - fill in the blank - When Do We Want It? Now!
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platomp3, 16 Nov 2007 @ 6:45am

I wonder if the living relatives of Leonardo DaVinci get a royalty any time the Mona Lisa is viewed. Is the strike just fall out from the recording industries attempts to maximize profits? Over the years I purchased LP’s, cassette tapes, then CD’s with the same songs. Do I own three individual rights to those songs? Can I give two of those purchased rights to friends? When should something enter the public domain? Will the recording industry and the writers attack libraries? They provide DVD’s and CD’s for free for people to listen to and watch. When Senators are on the floor debating whether the American public should have to watch coming attractions or be able to skip them, I say enough is enough. Greed has never produced anything beneficial to anyone.
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Midori, 16 Nov 2007 @ 6:53am

Pay now vs. Pay later tradeoff
Hi Mike!

Most people aren't paid extra every time a product they helped create gets sold because they usually are paid fairly upfront.

The reason the residual system exists, is to let the studios avoid paying the full cost up front for services rendered. (This is all work-for-hire stuff.) The same way you don't pay your plumber or electrician upfront for the whole job. There's nothing unfair about that, is there?

Why percentages, instead of straight up cash? Because it's cheaper in the long run, given that most movies are flops. Why pay loads of money for every script up front, when you can work it to only pay for the big successes? The lowest possible percentages are still in the studio's best interests.

You said "If the studios are making more money by creatively promoting the shows, then they can start to pay the writers more." You've heard of Hollywood accounting? Making money, as in net profit? Never happens. So how do you objectively measure when a residual gets paid? Well, by taking a percent of the gross of the project wherever it gets used.

Your main point, that tracking each individual use of content is hard, and then paying residuals on it still stands. P2P distribution of anything makes counting viewers really difficult. I don't think that's the kind of definitional problem the writers are striking about, though.

For a fairly detailed, snarky description of the economics of residuals, etc, told by a writer, see Kung Fu Monkey's blog here:
http://kfmonkey.blogspot.com/2007/11/albatross.html
and here:
http://kfmonkey.blogspot.com/2007/11/why-strike-ii.html
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Ven'Tatsu, 16 Nov 2007 @ 7:04am

Re: You'd Think
You apparently saw the sitcom writers picket. All they know how to do is put the same old cliche in a different characters mouth.
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John, 16 Nov 2007 @ 8:26am

Profits
One reason that the studios are not giving in on the demand is because they view the internet as the reason they are losing money in the first place. To them, this is some backwards kind of way to make them lose even more money online. Also, some studios like NBC Universal are really not making any money right now and are being completely subsidized by G.E. NBC is under added pressure to turn a profit because GE is a solid company that guarantees stability to NBC and they do not want to be sold off. NBC feels if it isn't making a profit anyway, why should it pay the writers residuals from the revenue stream.
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Streaker, 16 Nov 2007 @ 8:41am

Forget John Stewart...
Give this guy his own show. He's funnier.
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wklink, 16 Nov 2007 @ 9:04am

Re: You'd Think
Peter,

The writers are striking. The union won't allow them to write clever slogans!
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IT-Writer, 16 Nov 2007 @ 9:18am

From a Writer's POV
As both a WGA Writer for many years, and an IT professional, I applaud Pi for so clearly representing the writers' stand -- we are only asking for a small percentage of revenue generated by online distribution of content, not a residual based on its use. My personal feelings about YouTube clips and "promotional" venues is that they are a positive, synergistic forum that benefits the studios (and writers) as much as the the companies that invest billions of dollars to distribute online video content. But when NBC or FOX or any other studio create an online channel to distribute the content supported by advertising (just like broadcast and most cable TV) or subscription (HBO, etc), it is exploitation. Currently, the deal struck by the writers in the past regarding a payment for content distributed on DVDs is at best a disaster, and the issue was taken off the table this time around by the writers in an effort to facillitate. agreement regarding online distribution. Wikipedia has a concise and clear explanation of what the current issues are in this strike. The original formula for DVD residuals hasn't changed from the $100 per Betamax tape days of home video's infancy. Back then, the home video market was considered "unproven" and the studios were leary of making financial commitments. Now, of course, it is their primary source of revenue, and who would've thought there would be such a market for television shows on DVD? The writers of a movie make $.04 per DVD. For a $20 disc, that's about .2%. We are asking to double that to .4%. And even that demand was pulled off the table to try and make some headway for "New Media." The Internet will be the DVD of the future. The integration of the home computer and home entertainment system is inevitable and well underway. The studios want to treat it like it doesn't matter, and offer writers the same .2% we get for DVDs. The writers don't want to make the same mistake twice, and want to make sure there are payments for new media distribution commesurate with the contribution writers make. I unreservedly agree with the criticism that most of the stuff on TV and at the movies is crap. But that's true for anything, including computer programmers and web sites. The average salary for a working WGA writer is $65,000. Yes, some do make enormous amounts that mitigate pity, but like out brothers and sisters in the Screen Actors Guild, the majority of WGA members work hard for a barely middle-class living. For those writers lucky enough to collect residual payments for reruns and syndication (most animation writers for hugely successful series like "Sponge Bob Square Pants" see only a check for the script and then nothing more as Nickelodeon makes millions from Sponge Bob Marathons and DVDs), that income helps bridge the gap between jobs -- if there is a next job. As for Anonymous Coward, have you ever tried "sitting on your ass and writing a show"? I have. Yeah, it's a lot of fun, but it's far from a walk in the park. Just like in computer programming, there are dozens of "cooks" in your kitchen telling you how it should be, changing the requirements in the middle of development, adding new features at the last minute. The reason most shows are crap is the same reason why most apps don't work and are full of bugs. True, the rewards are great if you are at the right place at the right time, but for most, it is long nights at the keyboard, weekends away from your family, coming up with a brilliant idea only to have it shot down with a dismissive wave from a studio "executive" who is 10 years younger and 100 IQ points dumber than you. (Sound familiar, coders?) It's a breeze for only a handful, for the rest of us, it's a "real job."
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IT-Writer, 16 Nov 2007 @ 9:23am

Re: Profits
If NBC Universal was not making any money, they would be out of business. The notion that there are no profits in TV and movies is a myth perpetrated by studio accountants. Why are they so eager to cut deals with Joost, create Hulu and NBC Direct if they truly saw the Internet as a losing proposition? These are the same arguements we heard at the dawn of the home video age, and now DVD sales are their bread and butter.
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IT-Writer, 16 Nov 2007 @ 9:25am

Re: Re: You'd Think
That's what she said. (retort stolen without permission from "The Office")
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John, 16 Nov 2007 @ 11:41am

IT-Writer
I totally agree with your sentiments. I just am saying what an NBC executive recently told me. That being said I think that GE looks at NBC as a great venue to promote themselves as a company and also to bring prominence and prestige to their company, so profits, while important, might not be the only reason. I personally do not have a problem with companies trying to compete with Itunes. If NBC wants to sell its videos online for more, then we will see who will pay for them. Better yet, Itunes should let NBC try and sell its TV shoes for 3 dollars or 4 dollars. The sad thing about the whole writer strike is that NBC execs will continue to bring in a handsome paycheck while writers lose money. I think that this writer strike, though, will be the best thing to happen to the entertainment industry (and I don't mean the big 6 studios, I mean everyone who wants to entertain people and make a decent living.) As soon as talented writers and actors realize that they no longer need big companies in order to make money, then you will be able to finally write the shows you want to watch. Big companies will be hurt by the internet and technology, and thats a good thing.
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Osama bin Laugh In, 16 Nov 2007 @ 11:51am

Re: Writer's POV
To IT-Writer ... do you get paid by the word?
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Jonrog1, 17 Nov 2007 @ 7:56am

Re ... well all of it
I wonder if the living relatives of Leonardo DaVinci get a royalty any time the Mona Lisa is viewed. Is the strike just fall out from the recording industries attempts to maximize profits? Over the years I purchased LP’s, cassette tapes, then CD’s with the same songs. Do I own three individual rights to those songs? Can I give two of those purchased rights to friends? When should something enter the public domain? Will the recording industry and the writers attack libraries? They provide DVD’s and CD’s for free for people to listen to and watch. When Senators are on the floor debating whether the American public should have to watch coming attractions or be able to skip them, I say enough is enough. Greed has never produced anything beneficial to anyone.

Yes, greed has never produced anything beneficial to anyone. Except, well, almost everything, at some point.

The living relatives of DaVinci don't get royalties when people look at the Mona Lisa, but when reproductions are sold for profit, then the owner/producer of artwork gets paid for as long as copyright stands. (Personally I'm anti-copyright, and all my private work is released CC, but the law's the law) In the same way, your rant that writers would attack libraries because they provide free use of DVD's and CD's is insane. Those DVD's and CD's were legally purchased, and therefore our residual (or royalty, in the songwriter's case) was paid at that time -- exactly like the author receiving his royalty when the library legally purchased his book. Unless you have a problem with authors getting paid royalties for their work ...

Part of the mistaken debate -- and why is it almost always coders? -- is a fundamental misunderstanding of the WGA terms of "work-for-hire." Screenwriters are, under copyright law, the "authors" of the script, which entails many messy problems with a large company paying millions of dollars to shoot it,sell it abroad, etc. Basically, in order for modern entertainment industry to function, we need to assign authorship to the company. But we do so under very specific conditions -- that we get "residual" payments for reuse of our authorship. This is a system, by the way, that's worked very very well up to this point.

So we're not "asking" for payment. This is payment due for reuse of authorship in various media, which the studios are OBLIGATED to pay us. In particular, we're not asking for any payment unless the companies themselves make a profit -- so free promotional material ("worse to be unknown than pirated" etc) is specifically exempt.

The problem is, the contracts were written by non-geeks twenty years ago who didn't think to anticipate new media. So currently, the internet isn't covered. The studios are taking advantage of this loophole and not paying the writers, claiming -- well, claiming about nine things, but essentially "We don't know if the internet will EVER make money" and "but an entire episode shown with commercials, exactly like a rerun on TV, is promotional!" kind of sum it up.

In short, they expect us to be morons.

We asked to renegotiate the contract, hoping to up our residual payments from .3% (yes, that's a decimal point) to maybe .6%-ish. The studios told us to go pound sand. Seriously, not even a legitimate counter-offer. QED, strike.

I hope that clears things up.

Oh, and Anonymous Coward -- you're right there are people who would kill to have this job. Tens of thousands try with absolutely no guarantee of success, and only a small percentage after ten or fifteen years of "starving artist" lifestyle, make a living. The rest do indeed go home and get regular jobs, usually without bitching resentfully about how somebody else has it so much better. But they at least took the risk, and those very few who succeeded have received a reward commensurate to that risk. You have to decide what is more important to you -- a nice safe coding job, or a job that you love to do.
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non-writer who is being forced out of my job, 18 Nov 2007 @ 9:55pm

I hope all you writers lose your houses and your cars and your NBA season tickets, etc. You are forcing me to lose my job, just so you can make more money on top of what you already make....and wait....you don't even think for a minute that some of us might be a TAD bitter? It's not like we can get a job somewhere else in town, beacase you have shut down the entire industry in town. I now have to change careers. Thank you writers. Happy holidays to you, you self centered bastards.
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Lewis Salem, 19 Nov 2007 @ 11:33am

How much to the writers make now?
Blah blah blah blah ... who cares. The writers should leave the network studios and start their own distribution networks over the internet. If network TV did not exist, the world would go on without them.

Why have we not heard real dollar figures yet? What kind of money are these people making? I'm thinking that sympathy for them will wane when people find out these facts.
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put down the pickets and write fools, 21 Nov 2007 @ 4:14am

Salem:

From AMPTP website:

"According to WGAw, 4,434 of its working film and television members earned a combined $905.8 million in 2006. The average member earned $204,295 and over half earned at least $104,750. The WGA noted that these numbers are based on earnings reported for dues purposes and thus do not fully reflect above-scale payments. According to studies, workers in the media business earned on average just under $70,000 per year and the average Angeleno earned just over $46,000."
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