Kyle Kerr

Open Letter To Nick Counter

12/7/07 | Business, The Industry | 0 Comments

TO:  Nick Counter, chief negotiator for the Alliance of Motion Picture and Television Producers
FROM:  Kyle Kerr, concerned citizen and future WGA member
SUBJECT:  The AMPTP should agree to the Writers Guild of America’s contract terms

For the past four weeks, over 12,000 members of the Writers Guild of America have been on strike because their contracts expired.  You have been in negotiations with the WGA since July of this year, yet no agreement on new contract terms has been made.

As you know, the writers are seeking two things: higher residuals for DVD sales and payment for movies and TV shows sold and aired over the internet.  The WGA is seeking to double residuals for DVD sales from $0.04 to $0.08 per DVD, which have an average retail price of $19.99-34.99.  Writers are also not currently compensated for sales and revenue generated from New Media (which refers to newer ways of displaying video, such as the internet, cell phones and mobile devices like iPods).
In 2007, consumers are expected to spend about $16.4 billion on DVDs, and studios could generate about $158 million from selling movies online and about $194 million from selling TV shows online.  In such a volatile industry, where there is often no job security and where writers can go through months of unemployment between projects, residuals are an extremely important part of their income. There is no other cushion for them.

By agreeing to the WGA contract terms quickly and amicably, you will be able to 1) avoid a potential industry loss in the billions, and 2) retain a strong public image.

1. Reduce the chances of a potential billion dollar industry loss

The last writers strike lasted for months, and cost the industry hundreds of millions of dollars in only that short amount of time.  Think of what a similar loss would equate to in today’s economy.  It will not be millions, or even hundreds of millions of dollars; it will be in the billions, especially if the strike were to last longer than its predecessor.  The majority of losses will be in the form of advertising dollars companies will no longer want to spend on shows that have entered into reruns, though, in the future, box office receipts and DVD sales will be affected as well.

1.1 Learn from the past

The last WGA strike was in 1988 and lasted 22 weeks (just over five months), resulting in a staggering $500 million loss for the entertainment industry.  Considering inflation, a similar strike in 2007 could result in over $1 billion in economic losses, according to Los Angeles economist Jack Kyser.  These losses would be the result of television shows being forced into reruns, which, for many networks, will happen in early 2008 (power hitters such as ABC’s Grey’s Anatomy and NBC’s Heroes have already aired all possible episodes without the return or their writers).  Talk-shows such as Jay Leno, David Letterman and Jon Stewart, which rely heavily on current news events, were affected immediately and have already gone into reruns.

As viewership begins to decline due to the use of reruns, companies will be less and less willing to spend any significant portion of their advertising dollars on these shows, which is where the majority of the industry losses will stem from.  If an agreement is not reached within the next few months, TV shows will not complete their current seasons and pilots for the 2008 fall season will not be shot, resulting in a complete lack in new programming for the entire 2008 year—save for reality television shows, which have a strong hit-or-miss relationship with fickle viewers. 

1.2 What you are missing

The first paragraph of the official 2007 strike rules, a document you are surely familiar with, states that all WGA members…

…must immediately stop writing for any and all struck companies. [Members] may not continue to write or complete writing started before the strike for a struck company. [Members] may not start writing on a new project during a strike. [Members] may not perform writing services even if [s/he] work[s] at home or at [his/her] own office rather than at the company’s premises. This Rule also prohibits [members] from attending meetings, or engaging in conversations, as a writer concerning new, pending or future projects or writing assignments with producers, directors or other representatives of any struck company. [Members] may not attend pitch meetings or communicate with a company representative to receive notes on literary material even if [s/he] intend[s] to wait until the strike ends to make any requested changes.

Meaning that, until the matter is resolved, no WGA member is to work—or even make contact with—one of the above mentioned “struck companies” in any way.  These companies comprise all of Hollywood’s major studios, including the Big Five: News Corp. (Fox), Universal (NBC), Viacom (Paramount, CBS), Time Warner (WB, New Line Cinema, CW) and Disney (Pixar, ABC).  This amounts to an entire industry shutdown in the very near future if negotiations are not successful.  Not only will the talk-shows be affected, but regular television programming, and, eventually, major motion pictures.

2. Begin to mend an already broken public image

Everyone is being affected by the continuation of this strike.  Without writers, production on all late-night talk-shows and a number of prime-time television shows has been suspended, and their non-WGA member employees along with them.  Some have been entirely laid-off, while others were lucky enough to get suspended with a 50% pay cut.  This is no longer about writers and producers; not only are the above mentioned staff members being affected, but your viewers as well.  The audiences—the very people who provide the ratings from which you are able to charge advertising dollars for—are unhappy and siding with the writers.

2.1 The innocence at stake

Since the talk-shows have gone off the air over a month ago, nearly all of the non-WGA members staffed by production companies and television studios have been laid off (anywhere from 50-80 staff members per show).  Because most of the talk-show hosts are also card-carrying WGA members (including Jay Leno, Conan O’Brien, David Letterman, Jimmy Kimmel, and Craig Ferguson), they are not allowed to cross the picket lines, so their shows have not resumed production.  Jay Leno, David Letterman and Conan O’Brien are paying these staff members out of their own pockets.

Also suspended (for five weeks with a 50% pay cut) because of the writers strike are the NBC and Sci-Fi Channel regular casts of 30 Rock, The Office, Bionic Woman and Battlestar Galactica.  Sony Pictures TV has suspended regulars of ‘Til Death and Rules of Engagement without pay.  Warner Bros. TV has warned that layoffs are in the future if the strike continues.

2.2 Audience patience is beginning to wane

We all remember the ratings slump that welcomed NBC’s Heroes after its six-week extended “spring break” during the show’s first season.  The writers strike has been in effect for four weeks to date, with all late-night talk-shows already in reruns and most prime-time television shows not far behind; how long do you think it will take for fans to start losing interest in these shows?

A recent poll, conducted by the Graziadio School of Business Management at Pepperdine University, states that 63% of Americans are in favor of the striking writers, with only 4% in favor of networks and studios.  33% said that they were unsure.  Another poll, carried out by SurveyUSA in Los Angeles, reported that 69% of adults familiar with the strike supported the writers.

There has also been an online petition created in support of the WGA strike.  As of December 6, 2007, there have been over 61,350 signatures collected.  The petition states: “We, the undersigned, fully support the strike of the Writers Guild of America, and agree with the WGA’s stated goals of obtaining just and fair compensation regarding revenues generated through ‘new media’. Sincerely, The Undersigned.”

Not only are viewers upset about the hoards of industry employees being laid off, but about their loss of programming as well.  Besides the above mentioned affected television shows, a number of studios have announced the delay of several major motion pictures.  One victim of such delays is the much anticipated prequel to the 2006 blockbuster The Da Vinci Code, Angels & Demons, staring Tom Hanks and Naomi Watts, and helmed by Da Vinci director Ron Howard.  Release of the picture has been pushed from winter 2008 to summer 2009.  Also postponed is Columbia Picture’s Edwin A. Salt, a spy thriller featuring Tom Cruise.  NBC has also cancelled its planned Heroes spin-off series, Heroes: Origins, which was supposed to air for six episodes starting in April 2008.

I think you can agree that this strike has gone on long enough, and we can only hope that an end is very near in sight.  If you agree to the WGA’s terms for fair compensation, then you and the rest of the industry will be able to avoid the catastrophic consequences I have outlined above.  Your producers and studios will benefit from an increase in advertising revenue and a higher public image; writers guild members will benefit from a fair and just compensation package; actors, directors and non-union workers will benefit from reinstated production of their programs; and, most importantly, the audience will benefit from an increase in new programming.  All you have to do is give a little in order to do a lot of good.  Please feel free to get in contact with me at any time for further encouragement.

Thank you for taking the time to read this message, and I hope that the AMPTP and WGA will be able to find a solution soon.

Sincerely yours,

Kyle W. Kerr