Wednesday, October 31, 2007

On Writers & Strikes

After living in France, I really hate strikes. French workers seem like they'll strike if you look at them funny. Going on strike always felt like a form of blackmail, yet it can be an effective, and legal, tool to get things done. You can't talk from a position of power if you don't have a loaded gun readily visible... and the willpower to use it, even as a last resort after every attempt at amicable resolution has failed.

The Writers' Guild (WGA) is on the brink of a massive strike, so of course, I've got mixed feelings about it: if this strike goes ahead as planned, and continues until January, TV programs will start to get pushed around. After that, movies at the theatre will become affected. Basically, it's equal opportunity nastiness for everyone involved.

There's an old story about two children fighting over who should get the last slice of pizza. A parent overhears the argument and suggests they share the slice. But whoever cuts it, someone is probably going to get a larger slice... so the parent suggests that the first child cuts the pizza, and the second child selects which slice the first one gets. The result: both slices are exactly the same size.

This is the essence of any equitable negotiation—if each side can place themselves in the shoes of their adversary and design a solution preferable to their adversary, but solution which also seems fair for themselves, then the pizza has been cut exactly down the middle.

Thus, I've been following the WGA's conflicts with the AMPTP with great interest. Is one side asking for more of a pizza slice than the other? From what I've read, I don't think so, but then I haven't read what the AMPTP is saying about the negotiations. Obviously, as a writer, I'm biased towards the WGA's point of view, but if the WGA is only asking for what's fair and reasonable, why haven't they already gotten it? The AMPTP aren't villains with curly mustaches—they're people like anyone else and people always act to forward their own interests. Unfortunately, that approach doesn't always forward everyone else's interests. Why isn't the AMPTP agreeing to the WGA's demands?

I read this a half hour ago, from the WGA's Contract Captain Laeta Kalogridis:

I like the industry I work in. I have great respect for the men and women on both sides of the table—people I work with, and the people I work for. I get crazy with it, we all do, but at the end of the day I get to do what I love, and I’m grateful for that.

I’m also a working mother of two young boys, and the sole breadwinner for our family. I take my financial responsibilities very seriously, because they are serious.

This means, obviously, that I don’t want a strike.

But I also don’t want a terrible deal.

And for the last 27 years, here’s what’s happened to us as writers: slowly but steadily, we’ve lost, or had gutted, our rights on every new platform. VHS, DVD’s, cable, reality.

Now, for the first time in more than a quarter-century, we are refusing to back off of a new platform. We want to share in the new media and internet revenues that we are already helping create. They don’t want to share with us. It’s about that simple. Link.

I spoke to Hans about this a while back and he offered this insight on how a producer sees things: say you've spent 50% on overhead and you've promised 30% to residuals, and you keep 20% for yourself. What happens if your overhead rises to 70% or 80%? You go out of business. Obviously, producers want to make money in entertainment, but more importantly, they want to stay around long enough to do it. Residuals for a producer equal money out the door and that means less financial stability. I can't say I disagree with that perspective.

It got me thinking about the structure of financial remuneration in general. If you're a business owner, you put in sweat equity and your financial backers put in financial equity. You invest time, they invest money. Whatever profits are left over are usually split down the middle. But if your business requires employees, do they split that profit with you, too? After all, they worked for it as well. Right?

No. Employees are work-for-hires, and as such are given a static fee in exchange for their time. They work 40 hours per week, they go home, you pay them X amount, and they don't share the profits with you. But you work 100+ hours per week to make the business a success and split the profits of your hard work with your investors. It's like slicing that pizza.

The question is, are writers work-for-hire employees or business owners? They're acting as if they're business owners, but they're taking a salary check like work-for-hire employees.

Now, finally, we're at the core issue of this new world of distributing digital entertainment: ownership vs. licensing. If I bought a car from you, I would own the car and could do whatever I want with it and you can't say squat. Instead of a car, though, I'm buying your time, and when your time is up, you go home and you don't get to tell me what I do with the product you helped me create—that's the structure of a work-for-hire arrangement.

With licensing, everything changes. You retain ownership, but I control the car. I can't destroy the car without being accountable to you, but you can't tell me where I can and can't drive the car. Most importantly, if I make money with my new car, you are entitled to share in a small amount of those profits, otherwise known as residuals.

The clash of ideals is intrinsic when selling art. Is it still art after you sell it? Is art a commodity if you never sell it? Writers are artists, but the rules of commerce insist a price tag is put on their intellectual creations as if their property were a car.

So is the car bought outright? Or is it licensed?

Hollywood doesn't want business partners to split their profits... they want work-for-hires, even if a long tradition exists of offering back end points ("monkey points") on projects so bad that the producer can't get a proper budget to pay writers as work-for-hires. The movie business isn't like other businesses. How many other professions offer their employees back end points?

Furthermore, the car analogy breaks down when looking at the question of scale. For example, I can only buy a car from you once and sell it once, but I can buy an idea from you once—for $1—and then sell that idea a million times for a penny. If I sell it a million times and I own the idea, am I legally obligated to offer you a residual payment? I might be ethically obligated, but legally? Of course I wouldn't be legally obligated—because you had no obligation to sell me the idea at the price I was asking. But you did. And once you did, it became my idea, not yours.

And there's the issue.

The WGA is arguing (among other things) to be paid residuals for the reuse of their content... even though writers are work-for-hire employees. As Mark Kemp always used to say, "Perhaps I don't understand—you want to share the rewards, but you don't want to shoulder any of the risk? Can you please tell me how that's fair?"

Writers have the trump card, though. Their position is pretty reasonable: if a film they write makes no money, writers get paid no residuals. Yet if the film is wildly successful, writers should get a small slice of that pizza. They don't want the whole slice, but they would like something. This structure doesn't bankrupt producers, and it provides writers incentive to create wildly successful projects. Everyone wins.

Even so, producers will still grab whatever they can get, and they have a powerful reach. Case in point, Terry Rossio talks about his experience with Disney, and after reading this, it's really hard not to see the AMPTP as greedy zombies drinking the blood of newborn babies:
We are told, regarding royalties, that Disney's position on merchandising is that the characters, items, ships, locations, etc., are not described in enough detail in the screenplay in order to be considered anything other than generic. This allows them to sell a Jack Sparrow figure, dressed like the character from the movie, with scenes we created referenced on the packaging, and when you press a button Jack actually speaks six different lines of dialogue straight from the film—but that's really just a 'generic' pirate, and so you pay the writers nothing. (The way the legal definitions work, only the 'look' of the item matters, not what is spoken, and payments are made on the spoken words only if they are part of the separated rights agreement, such as a live performance.) My flight of fancy would be to manufacture the exact same figure saying the same lines and watch how fast Disney would sue for copyright infringement. Somehow they are able to hold the contradictory positions that the same figure that is indeed unique enough to be protected via copyright is somehow also not quite unique enough to qualify for merchandising payments to the writers.

To date, the WGA has a 90% strike authorization vote, and the Teamsters have decided to informally stand with the WGA (the Teamsters can't order their drivers not to cross picket lines, but their union can't punish anyone for individually deciding to cross the line). SAG has also voiced support for the WGA. That's bad news for the AMPTP.

I hate strikes, but in this case, it seems like the writers make a very good case, and AMPTP really hasn't been listening. Even if the AMPTP is right about the specifics of these negotiations, too many writers have been taken advantage of for way too long. Payback's going to hurt. Can you hear the world's smallest violins?

Further reading about the WGA, the AMPTP, and other entertainment news:
The Artful Writer
United Hollywood
Deadline Hollywood Daily

1 comment:

Terry Rossio said...

Well written and thoughtful analysis.

Here's one way to look at your piece of the pie concept. Since 1985, the producers have kept control of 99.67% of the video/DVD profits, giving (approximately) .33% to screenwriters.

This is in exchange for owning copywrite (writers have to give that up). It was a bad deal in 1985, but the excuse was that videocassettes was a young market and they needed help to get it off the ground.

Now, the writers would like to change that formula ... and let the producers instead keep only 99.34%. Yup that's correct, nobody at any point of the negotiations, not even the writers, are proposing that the studios ever end up with less than well over 99% of the profits. Truth be told, I bet the writers would accept moving from .33% to something like .45%.

And for this the producers decide to shut down the industry?

What other labor group is ever willing to accept no increases (on a bad deal) for even 3 or 5 years, let alone 22 years, and into the foreseeable future?