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Thursday, November 01, 2007

How does digital content figure into a possible Writers Guild strike?

The Wall Street Journal has a great piece today about how the future value of content distributed on the Net is playing a big role in the looming strike by the Writers Guild of America. Rebecca Dana and Sarah McBride write:

    The issue of compensation for digital distribution has helped bog down contract talks for months. Writers believe they got a bum deal years ago, when they made an agreement covering their payments for works distributed on videocassette and, later, DVD. That deal was made in the early days of the VCR, when the full potential -- and multibillion-dollar windfall -- of the medium wasn't well understood. The DVD issue remains so contentious that the writers have so far insisted on revisiting it in the current negotiations -- a move that Nick Counter, president of the studio alliance, last night characterized as "a complete roadblock to any further progress."

    Now the writers see Hollywood charging hard at another new medium: the Internet. Digital distribution is growing fast, with studios racing to start sites that throw TV episodes online quickly after they air or seeking creative ways to adapt their shows for mobile-phone use. Consumers can also purchase downloaded movies over the Internet via services like Apple Inc.'s iTunes. The current contract for writers pays them only if the viewer in turn pays to watch the show online. Extra content created expressly for the Internet isn't covered under the contract, with compensation for such digital use being worked out case by case.

    But the many experiments only underscore the uncertainty of digital distribution's future. "We're trying to create an economic model now for the various creative people to participate in, but nobody knows what the business is," says Steven Katleman, a partner at law firm Greenberg, Traurig LLP's Los Angeles office where the clients include writers. "Nobody knows what it's going to develop into when it matures."

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