With Strike Threat Looming, WGA Makes Inroads on 'Webisodes'

The Writers Guild of America (WGA) is finally making inroads towards full union representation of writers who work on Internet-only video entertainment -- typically called Webisodes -- which are short but fully self-contained stories that exist as add-on content for popular shows such as 24, or Lost.

If the Guild doesn't get its way during this years contract negotiations, even under the best of circumstances you'll find yourself facing a massive influx of reality-only television shows. Your favorite shows will start feeding off of rejected but stock piled scripts written months and possibly years ago. If worst comes to worst -- and it very well may this time -- you could find yourself without new television entertainment of any kind, period.

The WGA has been fighting a losing battle over the past six years which has seen few if any gains in contract negotiations, which have taken place under leadership that has since been thrown out on the street for failing to satisfy writers demands to fix an age old and financially painful mistake of years past.

After the dust had settled in Sony v. Universal City Studios where the U.S. Supreme Court had ruled that home video recorders -- the about-to-be-forgotten VCR -- were in fact legal, the WGA and Association of Motion Picture and Television Producers (AMPTP) sat down for their regularly scheduled negotiations. Though these things are not written in stone, one thing we know for certain is that the Guild leadership during this time did not foresee a bright and financially significant future for home video sales.

Because writers are forced to give up the copyright to their scripts when they sell them to the studios, they are not entitled to royalties in the same way that novelists are. Instead, the Guild has a similar system called residuals, which require writers to be paid for subsequent sales of the movie or television show that resulted from their script.

These residuals are often based on the sale price of the rights to the content, such as a movie that is progressing from DVD to broadcast television, or a network show just hitting cable syndication. What the writer gets is a percentage of what the studio gets, and studios have found magical ways to screw the writers and just about everyone else for that matter. One popular trick is for a production studio to sell its film or TV show to a cable channel that is also owned by its parent company.

For example, Universal City Studios creates show X, then "sells" it to the NBC network which airs it initially. Because both of these companies are owned by NBC Universal, the company is essentially selling the show to itself, and so does it at an extreme discount. It'll do this again when the show hits syndication, where the studio will often choose to sell syndication rights to a cable channel that the parent also owns, such as the SCI FI channel, also owned by NBC-U.

So instead of fighting hard for a good deal on residuals for home video sales, the Guild put their weight behind advancing Producer (in this context that means the production studios) contributions to the health care and pension funds. The Guild also regularly seeks increases in the minimum wages across the board, and usually gets the latter because it represents pocket change to the studios.

Because of this, writers got an extremely bad deal when it came to home video sale residuals, and try as they might, the Guild simply couldn't get the studios to budge on that formula. Even the infamous 1988 strike during which no new television was produced for a grueling 22 weeks didn't really get the studios to budge on the core issues.

Many people believe the '88 strike was nearly fatal, and that if another strike of sustained length were to occur today, it could sink many studios and possibly break the Guild. Writers are not universally rich, as it's often said that only about 10% of writers make top dollar on scripts and screenplays, and there are just under 12,000 members overall responsible for nearly everything you see on television and the silver screen, including nightly news broadcasts.

Many writers lost their homes, went into bankruptcy, and never recovered. Television audiences dropped over 10% and they never came back. Even now with the exceptionally high cost of living in Los Angeles, many writers struggle simply to make a decent living and production costs go up every single year.

Unfortunately for them, it has only gotten worse over the years.

Nobody saw the DVD revolution coming either, and studios made a decisive move to glue the Guild to the same residual structure that they've been using for VHS sales. The cruel irony to some is that had Universal won its suit against Sony and the Betamax, neither the DVD or VHS market would have ever come about, even though the studios are the principle benefactors.

In fact, if you're curious about just how unfair the DVD residual formula is today, consider that a writer on average will only see five cents from any DVD sold. That's right, while the studio will get $19.95, the guy or gal who wrote the thing that made it possible will get a whole nickel for their troubles.

And now the studios are pushing out even further, trying to apply that same old residual formula to Webisodes.

While the future of online video is anyones guess, it's already possible to buy downloadable commercial free versions of hit shows such as ABC's Lost, and it doesn't figure to be very long before we see full length original 'television' content produced entirely for web consumption alone.

After having been humiliated and defeated repeatedly at the hands of the AMPTP, the Writers Guild has apparently had enough, and a large part of the current strike threat emanates directly from that fateful decision to ignore the home video market and the current refusal to let it happen all over again with online content. With this being quite possibly the next and maybe even the last major revolution for this industry to come for some time, the stakes couldn't possibly be higher.

Though the real fireworks will happen during this years coming negotiations, smaller skirmishes have already broken out, and they are directly effecting online content right now.

The first real line was drawn in the sand in October of last year, when the executive producers and writers of SCI FI's Battlestar Galactica broke off their deal with SCI FI parent NBC Universal over the production of three-minute-long BSG Webisodes in a fight over payment.

On top of refusing to deliver the 10 Webisodes they had already produced, executive producer Ron Moore put the brakes on the notion of creating any more unless NBC sat down to negotiate. According to Newsweek, NBC-U's response was to swiftly seize the produced material and to file complaints against the Guild with the National Labor Relations Board (NLRB.) The Guild had been advising Moore behind the scenes, and NBC-U was alleging that they were illegally pressuring and coercing Moore and executive producers on other shows to refuse to honor their contracts.

The same Newsweek report claimed that the existing BSG Webisodes had been downloaded 5.5 million times in a months span. Those are some pretty heady numbers when you consider that Galactica was only averaging between two and two-and-a-half million viewers per week on the SCI FI channel at that time.

The Los Angeles Times subsequently reported in late January that the NLRB rejected NBC-U's complaint, which had also covered other hit shows such as Heroes and The Office.

In more recent news, CBS broke ranks with other networks playing hardball and brokered a deal with the WGA over online video content created for "As the World Turns" and "The Young and The Restless." In what may be a hint of the troubles to come for the Guild however, CBS made a follow-up statement, saying that this was a unique agreement for a unique circumstance, which is almost certainly not what the Guild had in mind.

In 2005, ABC resolved a fight with not just the WGA, but also the Directors Guild of America (DGA) and Screen Actors Guild (SAG) when they collectively bargained the right to receive pay TV rates for a so-called spin off series named The Lost Diaries, which would only be available over mobile phones. In the beginning, ABC had sought to use non-union employees on the mobisodes, which sent the big three into a near epileptic seizure.

It was at one point reported that had ABC pushed forward, the original Lost writers and staff would have possibly walked out on the show itself.

These unique agreements with certain networks and studios are all set to expire at the same time as the WGA's main contract -- on Halloween night of this year, of all dates.

DGA and SAG contracts are up in 2008, and there exists a possibility that if the WGA doesn't get what it wants, they could hold off on any action until the other two Guilds begin their negotiations. This situation is not unprecedented, and would see the WGA continue to operate under the terms and conditions of the previous contract, even after it has expired.

If the WGA chooses to wait, the strength of their position becomes infinitely stronger as all three Guilds can threaten to strike in unison, and literally shutdown the entire town.

Nobody knows if it will come to that, but one thing is certain: with the new management at the Writers Guild, a strike this year or the next is far more likely than it has been since 1988, and if it actually happens, nobody will escape unscathed.

Richard Verrier, "Guild wins 'webisode' dispute" Los Angeles Times. URL:
(http://www.latimes.com/business/la-fi-nbc22feb22,1,4761009.story)
Jenny Hontz, "Webisodes: A Battle Against the Empire." Newsweek. URL:
(http://www.msnbc.msn.com/id/15264007/site/newsweek/)
Dave McNary, "WGA, CBS reach deal over Webisodes." Variety. URL:
(http://www.variety.com/article/VR1117960801.html?categoryid=14&cs=1&nid=2565)