Streaming still a sticking point

Amid the optimism that the WGA strike could be called off Sunday, there remains a major sticking point in the tentative deal for WGA members -- ad-supported streaming.

To recap -- The WGA’s streaming deal still included a combination of a flat fee for the first year (excluding a two- to three-week window of free usage for promotional purposes) followed by a percentage of distributor’s gross. Proponents of the deal say that it's reasonable for a new delivery system to have an initial free window; the objections center on concerns that writers are giving away potentially massive amounts of revenue since TV viewing will be quickly migrating to the Intenet before the end of the contract, given current viewing trends. Speculation had been going around in recent days that the length of the window would be shorter than terms in the DGA deal — 17 days for continuing shows, 24 for new shows. But the window matches the DGA’s.

The United Hollywood site, operated by strike captains has posted a Point/Counterpoint on the issue. Christopher Kubasik argues that the argument's about what kind of model to use for streaming over the long term.

"Some people see the streaming as “just like DVDs” and so payment should begin right away," he wrote. "And others see the streaming as just a new delivery of system of real time content (like TV). My guess is that this difference in perspective is really where the dispute lies. We’re arguing over which metaphor/model to use for streaming. I side with those who see streaming as a whole new delivery system, and, as a result, I think having a window in which no residuals are paid is fair and reasonable. Here's why. While the big bucks (and the obsession) is often about the money that a movie makes the first week or two (or a TV show makes on its first run), the real money -- and I mean, the real, real money -- is in libraries."

Kristin Stavola contends that the window's length precludes writers getting a significant cut of the revenues -- even the 2% of distributor’s gross in the third year of the new contract. "I hope by now you’ve realized that the 2% (the AMPTP has forced upon us) is meaningless," she added. "The big traffic numbers have already come inside of the promotional, Residual free zone -- and we’re left with 2% of the stragglers."

Stavola also said the terms set a bad precedent for upcoming negotiations and cites the inability of the WGA to improve on the homevideo rate once it was established in the 1985 contract.

"Because once we give them this promotional window... There ain’t no getting it back!" she wrote. "We’re setting precedent on Internet jurisdiction. VHS/DVDs anyone? Not only has the 4 cents never been revisited, it wasn’t even on the table for discussion! Why should anyone believe the promotional window goes away in 2010 just because Nick Counter goes away?!"

Here's the entire post -- http://unitedhollywood.blogspot.com/2008/02/ad-supported-streaming.html

Comments

[Christopher Kubasik]

I want to add that the quoted section aboe leaves out a key point:

The studios and networks currently don't pay writers ANYTHING off the revenues for the initial release of movies or TV shows. Why? Because they already paid us when we were writing the content. The companies take the financial risk to create content and received the upfront income from initial release for TV and Film.

It would be really great to take a cut of the initial release from the Internet -- making more money is always great. But the point is that the initial Internet release is not an after-the-fact re-use of content like re-runs or DVDs -- it is THE release.

It is a parallel to and the equivalent of the initial broadcast on TV. I know we're used to TV being the "anchor" of a broadcast and everything else being a re-use -- but that is not longer the case. TV and the Internet are becoming sisters in distribution, and this parallel distribution pattern will only continue.

So, why multi-day window? Because time shifting is how people watch TV today and certainly how people use the Internet. People watching Heroes on the NBC website don't run to their browsers to watch the moment it's posted. They watch it when they get around to it. And the Window allows the producers of the content to recoup their expenses during the first use of the the distribution of the content.

Then, after a couple of weeks, when the companies that produced the content and took the financial risk on it have recouped what they can from viewers watching the initial release, the Window closes and we move into what is a parallel version of re-runs for the Internet -- the show is still there, but now we get a cut of gross revenue.

Unless we're going to argue that we should get residuals the day a film is released or a TV show is first broadcast (which makes no sense since they already paid us for the initial use), it makes no sense to stop this deal because we're not getting residuals on first use on the Internet. And if we're going to accept the fact that we're talking about first-use on the Internet, then we're going to have to accept a Window of a couple of weeks for the Internet because, along with DVRs, timeshifting content on the Internet is just how the things are done.

Christopher Kubasik