Business Ethics and the Writer's Strike

"If you enjoy television and movies, the scariest day of the year could arrive at midnight on Halloween. On November 1, 2007 the contract the Writers Guild of America has with the TV networks and film studios runs out" (Ryan, 2007). The business ethics issue that this paper will be focused on is the recent Writer's Guild of America strike. The Writer's Guild of America protects the writer's for television shows and movies and has recently gone on Strike in November of 2007 because of unfair pay. The ethical issues here are not paying writer's fair wages to begin with, not paying writers for programs that are aired on the internet and for the compensation of DVD sales. I will argue that these issues are extremely unethical on the basis of income reported by Hollywood actors, producers, agents, and directors each year. Although the writer's strike has not produced any illegal information from the networks, it still shows that the network owners are performing their jobs in an unethical manner. What is more interesting is that the network owners are forced to perform their jobs unethically because of the general public. This paper will research the main reasons of the Writer's Guild of America strike, why the networks acted unethically, and what can be done to prevent situations like this from occurring again.

"The producers appear to have severely misread just how adamant the writers were in their insistence on getting a slice of the revenue from new media forms, such as internet downloads of TV shows. Rather than fold at the last minute, as producers had expected, the writers walked" (Snedeker, 2007). The strike was initiated as new media continues to become a huge part of the entertainment industry. As technology continues to grow each day, the way the people get their news, communications, and entertainment continues to grow each day. More and more media sources are being introduced each year and this severely impacts the television world. In 2007, the iPod, vCast, and Zune were just a couple of the media outlets that were introduced to the market that allowed people to watch television programs without having to turn on their television. "Apple and Fox unveiled a partnership that links their respective iTunes and Idol franchises. Under the terms of the deal, performances by American Idol contestants will appear on the iTunes Store the day after they're broadcast on television" (Dalrymple, 2008). While American Idol is a reality television show, it still has writer's that write the script for the hosts. More than likely, the artists will be introduced by this host with the script the writer's created. The problem is that they will only be paid for the one time that the introduction airs on television. The writers will not be paid for the millions of other times that the introduction is used on iPods. These types of problems also run into internet programs that play television shows on their web pages such as MySpace. The writers are not being paid for these broadcasts even though they created them. Partnerships like the American Idol and iTunes partnership can create an equal and fair way to pay for these broadcasts. In the terms of these deals, there can be many smaller deals with the writers that are producing the broadcasts.

"The average salary in Hollywood, according to a 2006 survey by the Motion Picture Association of America, is $73K" (Lee, 2007). $73,000 is a decent salary for a United States citizen to bring home. With a working spouse, the family may be able to make over $100,000 a year making life comfortable. On the other hand, the actors and actresses performing in these shows that the writers create are making hundreds of thousands of dollars per episode and sometimes even over millions of dollars per episode. That is quite a big difference when it comes down to it. While the actors do need credit for being able to act on camera, they would not even have the chance to be there if the writer's did not create the show which many actors are now finding out since the writer's strike occurred.

The entertainment industry is completely motivated by profit. Every television show, movie, and advertisement is decided on what type of profit will be brought in. Since everything is based on profits, there are very few lines that the entertainment industry follows when it comes to ethics. There are constantly reports of actors doing drugs and executives doing closed door business deals that should not be allowed. But since they are all making millions of dollars it seems to slip past most people's radar. So when it comes to profit, there are very few rules that anyone in the entertainment industry has to follow. That is where the writer's strike comes in to play. Since the corporate culture of Hollywood exists on the premise of "We are rich and can buy our way out of our problems", everybody that is in the industry does want they want and buys their way out of their problems.

The writer's strike put an end to a certain aspect of the profit seekers by going on strike. The television networks knew it was unethical to be paying the writers such a low wage and not paying them for other media broadcasts as well as paying them a small percentage of DVD sales. But, it was creating a larger profit so there was no need to worry about what was correct or ethical. Webcasts and DVD sales are without a doubt bringing in profits. Most webcasts no have an advertisement before the main program begins which is bringing in revenue for the television companies. "CBS increased its revenue from webcasts of the NCAA tournament 18 fold - from $250,000 to $4.5 million - when it moved from an online subscription model to an ad-supported one" (Davis, 2007). Webcasts do not require very many expenses from the television network to create and they bring in millions of dollars. While this example from CBS is based on a sporting event, there are still some scripts for the sporting event that must be written including the half-time shows. So the television networks are brining in millions on webcasts and not paying anybody for them. In a matter of sense, they are making pure profit.

The writer's strike takes into effect all of these aspects and that is why they are demanding more income for these types of media outlets. They are creating them and not being paid for them. While the network companies are obviously at fault and not acting in a very ethical manner, it is also important to take a look at the people that support the entertainment industry, the average American. The average American sees the actors on television and actually believes that they are creating the show themselves and that their characters create the plots of each episode. "The same 'willing suspension of disbelief' that enables an audience to buy into a comedy or drama also calls for our fooling ourselves into thinking that the action is determined by the on-screen characters" (2008, Feb 14). The average American needs to reevaluate television and become educated on where the storylines are actually coming from. As the actors and actresses continue to be idolized more and more every year with more cameras following them around than the presidents of countries around the world, it is no wonder that people believe that these gods and goddesses actually create the drama on their own television shows. "Following the success of HCR, Kevin helped launch the first issue of That's Life! Entertainment Magazine. Sales revenues exceeded $250,000 in the first year" (2006). Entertainment magazines are flying off the shelves at an alarming rate. More people voted for American Idol contestants than in the last presidential election allowing these actors, actresses, singers, and dancers to feel like they are above and beyond everybody else. Maybe it is the American public that is also acting unethical to the other people that are in the entertainment industry.

The two alternatives that both parties faced were to agree on a better pay scale for the writers and include better benefits for the webcasts and DVD sales. The other option was to continue the writer's strike and end up costing the entertainment industry billions of dollars as well as causing many people to lose their jobs. The ethical thing to do in this situation would obviously be to agree on a better pay scale, but the television networks refused to agree on paying the writer's more at first.
Agreeing on a better pay scale would go along with the moral philosophy of teleology. Making this agreement would be an act that would be morally right because it would produce career growth, wealth, and fame or both parties (Ryan, 2007). It would also be more likely to be classified as a utilitarianism act since it is for the benefit of the union which would be the greatest good for the greatest number of people. So, agreeing on a better pay scale would be the correct ethical decision according to the teleology philosophy. It would also agree with the philosophies of deontology because it would focus on the writer's individual rights which would include being compensated for work that they completed. Since deontology is focused on everybody must be given equal respect, the writer's should be given equal respect as everybody else that benefits from webcasts and DVD sales. So agreeing on a better pay scale would also be the correct ethical decision according to deontology philosophy.

Many of the network television owners may believe that continuing a writer's strike would be the correct ethical decision due to the egoism in teleology. It would work for them because it would the correct decision because they would be taking advantage of their own self interests. But, teleology utilitarianism would not agree with continuing a writer's strike because it would not be a benefit for everybody. The egoism wouldn't even make that much sense because no wealth or career growth can be found if there is a strike and no money is being made anyway. So, continuing a writer's strike is not the correct ethical decision according to teleology theory. As for deontology, continuing a writers strike would not be respectful of the individual's rights to make an honest living and therefore would not be in line with an ethical decision. The writers would not be respected if the strike were to continue on so it would not be an ethical decision according to deontology philosophy as well.

Since both philosophies seem to lean towards agreeing on a better pay scale that would probably be the most ethical thing for the two parties to do. Since the entertainment industry is continuing to make billions of dollars per year, there should be no reason that the writer's should not receive a portion of this income. Since the writer's are the backbone of anything in the entertainment industry, it only seems fair to give them their cut of the profit. In the long run, the network studios will see how important the writers are and come to an agreement with them so that they can continue the entertainment industry as usual. If they do not do this, they will continue to lose billions of dollars a year and eventually go out of business. This would not be the outcome that the entertainment executives would look forward to, so even though they do not want to pay the writers more money, they will eventually have to give in.

The technology continues to make immense changes in the entertainment industry. Recent technology advances have revolutionized the way that people listen and purchase music. With the creation of the MP3's, thousands of songs can be transferred in an instant. It is continuously demolishing the record industry and their profits continue to decline year after year. The only reason there is not a huge problem is because the artists and the fans are actually happy that there is no longer a middle man making huge profits. The record labels can no longer profit off of other people's talents by selling their songs to the fans. Now, the artists can directly sell the songs to the fans. Most artists do agree with this and are trying to still come up with better and cheaper ways to get their music to their fans. Other artists, such as Metallica do not agree with this course of action and sued Napster.

The television industry is in the same problem with the writer's strike because there is no longer the middle man of broadcast networks. The internet with YouTube and MySpace can profit from these television shows by having advertisements on their website before the program starts. But, the artists, in the music industry, benefited from not having to pay the record labels. With television, the writer's are the artists, but they are not profiting from any of it. They are being cut out of the equation even though they are the talent. It would be the same as if the record industries took the music from the artists and sold it online to make money and didn't pay the musicians. As the technology continues to advances, there are not going to be these types of problems within the next five years. There will most likely be another completely new genre of entertainment venues that there will be people worrying about. As the news industry has also seen, newspapers are still going out of business year after year as more people turn to the internet for their news. Eventually, all newspapers will be obsolete and the journalists will have to write for online news sources. Writers may eventually have to switch to writing shows for MySpace or YouTube in the next couple of years as broadcasters lose their edge and more and more people watch their shows online.
As mentioned earlier, the entertainment industry makes billions of dollars a year and when there is that much money coming and going the ethical decisions that normal businesses need to make on a daily basis become blurred. The individuals that are involved in the industry begin to develop their own rules based on the corporate culture of the industry. Many other industries do this as well, but most of the time it is for better ethical standards. The entertainment industry, however, continues to promote unethical standards and publicizes them on a daily basis. The Writer's Guild of America went on strike in November of 2007 for being paid too little for their work and not being paid for webcasts and which they had written and not being compensated enough for DVD sales. By going on strike, they exposed yet another unethical behavior being performed in the entertainment industry by the network executives. With reality television becoming more popular than regular television shows, this argument may not even exist in the next couple of years, but in the current period of entertainment, the writer's are the reason that the actors, actresses, and network studios can even make money in the first place. Without the writer's, there would be no new episodes of television shows and we would all be forced to watch whose dad is better on an all new Fox reality show.

References
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(2008, Feb 14). With the writers strike settled, what did we learn in 3 months?. The Canadian Press, Retrieved February 23, 2008, from http://canadianpress.google.com/article/ALeqM5hvb4p-qZxckeHicxIkwTYbeUQF6w
Dalrymple, Jim (2008, Feb 22). Analysts: Apple Brand Benefits From Idol Deal. Macworld, Retrieved February 23, 2008, from http://www.pcworld.com/article/id,142750 c,mp3players/article.html
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Lee, Al (2007, Dec 3). PayScale. Retrieved February 23, 2008, from Hollywood Writer Salaries, Hollywood Writer's Wages Web site: http://blogs.payscale.com/ask_dr_salary/2007/12/hollywood-write.html
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Snedeker, Lisa (2007, Nov 8). Four days in strike tilts to the writers. Media Life Magazine, Retrieved February 23, 2008, from http://www.medialifemagazine.com/artman2/publish/Television_44/Four_days_in_strik _tilts_to_the_writers.asp