advice from a fake consultant

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Thursday, November 29, 2007

On Media And Money, Or, Thoughts for Striking Writers

There is no doubt the landscape is forever changing for those who wish to create and distribute “new media”-and for those who wish to profit from that creation.

In a scene reminiscent of the breakup of the Hollywood studio system, the “old media” gatekeepers are falling by the wayside…and the economic changes that have rocked the worlds of film exhibition, newspapers, network television, and the music industry in turn have now descended upon Hollywood’s content creation community in the form of the Writer’s Guild of America strike.

What’s the strike about, what sort of solutions might emerge…and what if the ubiquity of digital content distribution makes it impossible to earn money with the current economic model? Those are the subjects we’ll look at today.

Here’s the “why” in a nutshell:

Writers for television and film are employed by producers, and the Writer’s Guild represents (and negotiates for) those writers.

When distributors of content show a particular program, a payment is made to the producers, who then distribute some portion of that money to some of the persons involved in the show’s production-most notably, actors, writers, and directors. Those monies are called residuals.

But there are exceptions-and one of those is the Internet.

As of today, writers do not receive payments for programming distributed online.

There are two ways online distribution can make money: companies like Netflix (or the current TV networks themselves-here’s Fox and NBC/Universal’s joint effort) charge to view content delivered by download and a portion of that revenue is paid to producers; or the media is shown on an ad ad-supported service not unlike atomfilms or YouTube.

In that second model, there is no clear rule on how, or if, a producer will be paid for the showings-some media is being shown with no payment, and some deals are presumably being made that involve the distribution of ad revenue…and presumably there will be many more.

Anyone who has seen the demise of VHS and the rise of DVD (and today’s efforts to move us to Blu-Ray and HDDVD) knows that Internet distribution will eventually become the distribution method of choice…until some other media replaces that.

And thus the strike.

Writers feel the only hope they have to get paid in the future is to derive income from the distribution method of the future.

But what if the fate of the music business is the future of all media?

Courtney Love eloquently explains (with detailed math) exactly why signing a contract with a record company, recording albums, and touring is a career that pays more or less the same as working at Wal-Mart. Or, as she puts it: “sharecropping”.

As a result, for artists the real money in music has become the revenues those artists retain from their live performances…and the alternative methods artists and distributors have discovered to sell their media. It’s not just iTunes, either; ringtones have become a major new source of revenue, as Thomas Dolby and Nokia well know. Games, too.

And then there’s Jill Sobule and the QiGO key. Sobule is selling the keys at her concerts, and the keys provide access to a downloadable version of the same concert that she makes available in a few days at her web site. (By the way, she’s also providing a free download of her excellent live show from Joe’s Pub in NYC last July for anyone who is interested as a means of encouraging you to purchase a ticket for a future show.)

As for the record companies: just like cell phone airtime, there is less and less revenue in the thing, despite the fact that use of the commodity has exploded. (Something’s being played on all those new MP3 players, after all.)

So how does all this relate to the writer’s strike?

Well, consider this: if the money in music is in the live performance, and the media has become a near-valueless commodity item; and film and TV producers are hoping to hoping to earn a living by selling media, and have no outlet for live performance…well, basically, in an iTunes and YouTube world, what’s the future of writers, or producers, or any major visual programming company, anyway?

Is it possible that eventually the only media “stars” who really achieve great fortune are those who can parlay a “brand identity” into lifestyle products…and that the real “new media” may turn out to be a conglomeration of Jimmy Buffet, Jay-Z, High School Musical, Starbucks, and The Simpsons-and the next mega-intergalactic garage band or comedy animator or Jackass imitator with perfect fashion sense that finds their way through the clutter of iTunes?

In the end, it may turn out that distribution of the derivative rights is the only battle worth fighting-especially in a world where writers risk becoming wage-workers for producers of programming fighting for attention and decreasing revenues in an ever-fragmenting market…that occasionally yields a new cultural icon in which the writer/owners can all catch a wave of profit and finally, in that most Hollywood of clichés, ride their newfound wealth off into the proverbial sunset.


Ellee Seymour said...

I think all this is going to mean a greater role for citizen journalists, it's going to be a lot of fun.

fake consultant said...

my suspicion is you may be more right than either side cares to admit.

it also makes me think the phrase "viral video" is creating more and more discomfort across the industry.

in fact, you have to wonder if, when historians look back on this time, "flash" and "final cut pro" will be viewed as the slayers of the dragon.

Welshcakes Limoncello said...

Thank you. I hadn't realised what this particular strike was all about before. The comparisons to the break-up of the Hollywood studio system and later the transition from video to DVD make it clear to me. Great post.

Ellee Seymour said...

Yes, there's a lot to be said about viral videos too, they are great - as long as you want them in the first place.

jmb said...

Great explanation indeed. You have to be really on the ball these days when negotiating things like this.

fake consultant said...

signorina limoncello...

...always nice to see you in the neighborhood. i post at several sites, and one of the commenters at my left wing told us that in france considerable explanation was required as well-but in their case the reason for the explanations was because under french law, all these issues have been codified: the current rights automatically transfer to any new media as they emerge.


...the thing about these viral video makers is that they eventually "grow up" and begin producing websites (and even emerge into "old" media)-and i often point to as an example. the original joe cartoon animations were one of the first things at after it launched, and today joe cartoon is "new media"-as you say, for better or worse.

(by the way, the g4 channel in the us, among other "old" media outlets, are showing viral video as part of their regular example of the circle closing.)

jurisdiction over these sites is actually one of the other issues writers are addressing...but it's going to be hard to negotiate with site operators compared to producers-site owners are not organized, and the economics will be much different.

and to the lady in red... are absolutely right in referencing the difficulty of working these sorts of negotiations; and even more challenging, i suspect, is to look beyond today's negotiation and identify the issues coming down the road.

Anonymous said...

A really fascinating post - I had not really grasped the reasons for the strike till now. I do think they are in for a hiding to nothing as the internet has escaped from control - which I think is basically a good thing. You can't charge for content easily when it can be copied and sent anywhere - illegally - for free.

fake consultant said...

the idea that visual media is moving where music has already gone does seem inevitable...and i'm watching as the talent itself becomes the product...while the nature of "product" itself changes from entertainment to consumer goods.

i should have seen it coming sooner...the smurfs, the simpsons, the spice girls...all of these invented animated characters exist only to sell product, and it was only a matter of time before the process moved to the next level.