The Wall Street Journal-20080112-Hot Topic- Striking Out- Are the Oscars Next-
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Hot Topic: Striking Out: Are the Oscars Next?
The Hollywood writers' strike claimed its biggest casualty this past week when the threat of picket lines forced NBC to pare back the annual Golden Globes awards ceremony.
The network will air an hour-long news conference Sunday night instead of the star-studded, hours-long dinner event that drew 20 million viewers last year.
The upending of the awards season comes as more television shows air their remaining first-run episodes produced before the strike began on Nov. 5. Popular entertainers such as Jay Leno, meanwhile, have faced criticism for crossing picket lines and returning to work earlier this month after showing reruns for weeks.
Here's a closer look:
Why are writers striking? The Writers Guild of America, which represents 12,000 screenwriters, went on strike against the Alliance of Motion Picture and Television Producers last fall after their three-year studio contract expired. At stake: how the studios compensate writers for work distributed over the Internet.
Writers are demanding a uniform 2.5% of revenue for recycled or original work that appears online, an increase from current rates that vary depending on viewership. Studio owners want to apply the residual formula currently used for home videos to digital media.
But that doesn't sit well with the writers. Their 1985 contract established the current residual model for then-fledgling home-video sales -- 0.3% of the first $1 million of revenue and 0.36% on each unit sold after that, which amounts to less than five cents for a $20 disc -- shortly before the home-video market exploded. DVDs generated $23.4 billion in sales last year, compared with $9.6 billion in box- office returns.
Studios say DVD revenue is needed to finance films that lose money; nearly four in 10 movies don't turn a profit, according to the Motion Picture Association of America. Writers withdrew demands for increased DVD residuals shortly before contract talks collapsed.
How costly is the strike? The walkout has cost the Los Angeles-area economy $1.4 billion so far, according to the private Los Angeles County Economic Development Corp., including nearly $180 million in wages for writers and $310 million in wages for members of the International Alliance of Theatrical and Stage Employees. But an estimate by the Anderson Forecast at the University of California, Los Angeles argues that losses will be closer to $380 million if the strike ends by March, accounting for extra wages generated by scripts stockpiled before the strike began.
Studios have enough films to last through the year but will exhaust their backlog of most television episodes later this month. After that, networks plan to fill their prime-time lineups with more reality TV and unscripted programming. Media analysts have suggested that, in the medium term, a strike could benefit studios by allowing them to opt out of costly production deals.
The big fear is that a prolonged strike could realign viewers' habits, driving them away from traditional platforms toward new media. After the 1988 writers' strike, prime-time ratings for the three major broadcast networks fell 4.6% from the previous year, while ad- supported cable channels saw ratings jump 25.5%. Media buyer Magna Global predicts prime-time ratings could fall as much as 8% by March and 13% by May if the strike continues.
Also at risk: the fate of the Academy Awards, scheduled for Feb. 24. The Oscars drew 40 million viewers and $80 million of advertising revenue last year, with an estimated $1.7 million for a 30-second ad.
How long could the strike last? It shows few signs of ending soon. Wednesday, Warner Bros. sent notices to 1,000 film and television production workers warning of pending strike-related layoffs.
The situation could worsen because studio contracts expire June 30 for the Directors Guild of America, which represents 13,000 film and television directors, and the Screen Actors Guild, which represents 120,000 actors. SAG has indicated it will strike if the issue hasn't been resolved when its contract expires, raising the prospect of an industrywide work stoppage.
Why have some shows returned but not others? In an attempt to divide the studios, the WGA has struck deals with independent producers, including one with Tom Cruise's United Artists film company this past week and with David Letterman's Worldwide Pants Inc. last month. That allowed writers to return to work for the late-night host and prompted other late-night shows to return without their writing staffs or risk losing viewers. Under strike rules, those shows aren't allowed to do anything normally scripted by writers.
-- Nick Timiraos
POINTS OF VIEW
Jim, I got a problem here. There are no words on my teleprompter."
-- Stephen Colbert, comedian
FACTS
-- The 1988 Writers Guild of America strike lasted 153 days, the longest writer's strike in history. The 1960 writers strike lasted 146 days.
-- U.S. households had their TV sets on for 8 hours and 14 minutes daily during the 2006-07 television season, according to Nielsen Media Research.
-- In an online survey of more than 600 Variety subscribers conducted Dec. 26-31, nearly 26% of respondents said they had lost their jobs because of the strike, up from 16% in a November survey.
-- Nearly 60% of Americans support the writers, while 14% support the studios, according to a December USA Today/Gallup Poll. Only 12% of those polled said they would watch reruns of late-night television shows. One-quarter said they would go to bed earlier.
-- The 1988 strike led Fox to pick up the "Cops" television series that shows police officers responding to calls. The show was a big hit and, in its 20th season, has become one of the longest-running shows in television.
-- Reality shows make up 46% of all television production in Los Angeles, according to FilmL.A., which handles film permits for the city.
-- About 70,000 U.S. workers participated in 20 strikes in 2006, according to government statistics that track walkouts involving 1,000 or more workers. Only two lasted longer than 50 days.
-- Striking CBS News writers prompted the cancellation of a Democratic presidential debate last month when candidates said they wouldn't cross picket lines to participate in the forum.
