The Writers Strike & The Great Big Elephant in the Room

I’ve been dying to write about the strike, but I haven’t had anything unique to say that hasn’t already been covered by so many other writers and bloggers like Phil Robinson’s 4-Minute History of the WGA, United Hollywood, and Nikki Finke. I liked the posts from John Rogers (“Moral issues aside -- fair residuals mean more working writers, more working writers mean more product, more product means more physical production jobs, media sales, corporate profits and shareholder value. That's what we're striking for.”); John August (“Pencils down means pencils down. I’m not writing any features or television until there’s a contract.”); Billy Mernit (“Beyond all the negotiations, the percentages and the politics, lies a simple mistake, a kind of a basic mis-evaluation. We've always, since the dawn of the industry, been belittled.”); and Craig Mazin (“I hate this strike, I hate the circumstances that led to it, I hate the missteps that occurred along the way, and I really hate to say ‘I told you so’ to all the people who said ‘Patric Verrone will keep us out of a strike!!!’ …but the strike is here. Back it all the way. And if the companies are serious about eliminating residuals (which is what much of their proposal would achieve), then back it to the death.”). On the fun side, there’s Diablo Cody, screenwriter of Juno, (“Even striking can be fun when someone's blasting ‘Sir Duke’ and donuts abound,” and “The best part of this afternoon was when Jeremy Piven drove off the lot and we all screamed ‘PIVS! PIVS!’ at him like lovestruck Beatlemaniacs.”). I also got a kick out Ze Frank’s video blogs. Check it out. He’s hilarious.

I want to touch upon something no one else has written about yet, not even in the media, I don't believe. This problem honestly has nothing at all to do with the writers nor with any of the things the writers are asking for, especially when it comes to residuals. What the writers want in terms of percentages is so miniscule and would have such an inconsequential impact on the business as a whole that it’s stunning the AMPTP would even debate the subject. Our contract was 20 years old. What did they expect? It’s not our fault we’re asking for a revised (and still very reasonable) percentage of residuals, which should include internet downloads. The simple fact is, the fight against the writers is symptomatic of bigger industry-wide issues. Whether we ultimately do or don’t get what we asked for, this still won't solve the problem of the great big elephant in the room.


BIG, BIG ELEPHANT

Unlike some of my colleagues, I’m actually sympathetic toward the studios and their difficulties with endlessly rising costs of production and distribution. The financial risk has never been more sky-high than it is today, and it is a fact that many studios are losing money. Did you guys hear about the recent report put together by Global Media Intelligence that was called, “Do Movies Make Money?” As reported in the NYT, “The study estimated that all such releases last year would yield a combined loss of $1.9 billion after collecting the revenue from an entire first cycle of sales to domestic theaters, foreign theaters, home video, pay television and every other source of income. Total sales for last year’s slate, the company figures, will ultimately be about $23.7 billion, down about 4.6 percent from 2004. Total costs, meanwhile, rose to $25.6 billion, up 13.2 percent.” Concurrently, the studios are “paying out shares worth $3 billion, while piling up an almost $2 billion loss on their new films.” Out of the $3 billion in shares, us lowly writers only got a mere $121.3 million in residuals. THAT'S NOTHING. Do you see how trivial all this arguing about residuals is?

The real problem with rising costs has nothing to do with writers, directors, or (most) actors but it has everything to do with this antiquated Hollywood film distribution system, which should’ve been demolished years ago. And I don't mean “restructured.” Or “re-organized.” I mean total annihilation. Gone. Poof. Out of work. You studio guys want to cut costs? Well, THERE is your big elephant. Fix that problem instead of punishing the writers. It’s absurd in this day of streaming videos and next day DVD arrivals from Netflix, that Hollywood should still live in the past and spend billions and billions every year to ship those heavy canisters of film reels to tens of thousands of theaters around the world, only to have it all shipped back to them a few weeks later when it’s over. In this day and age, it ought to be dirt cheap to get films into theaters. What costs billions should only cost nickels. That eliminates risk. But we've reached a point where the rest of the world has figured out all the things Hollywood could not and now more and more people stay at home to watch films because the quality of home theater systems is better than what you get in theaters. And no one kicks the back of your chair.

I’ve been thinking about this since the days when Lucas tried and failed to get theaters to install more digital projectors before he released Revenge of the Sith. There were articles and conferences and all this talk and NOTHING HAPPENED. Every business evolves. Yet Hollywood is unshakeable. And now the studios are quite literally paying the price for failing to embrace the digital revolution. It’s like this giant bloated cow that can’t move forward and actually chooses to waste mountains of money and manpower and expenses to stay propped up on this antiquated low-quality distribution system that’s been around since – what – the 1930s? If a director (like Spielberg) wants to film something on film – GREAT – but at least be willing to transfer the finished film onto some kind of digital platform to save costs on distribution.

As far as I'm concerned, the middle man should be cut, the studios should be dealing directly with theater chains, they should be shipping piracy-proof DVDs to theaters for next to nothing, digital projectors shouldn’t have to cost theaters one penny more than what regular projectors cost, and money can be transferred back to the studios at the point of sale. That’s not science fiction. That’s a practical business solution to rising costs. If I had the money, I'd start a new chain of theaters that would only project films digitally, refuse to talk to distributors, and deal directly with the studios and any other production company that has a good film to show. Fuck the system.


Check this out. Of the Global Media Intelligence report, Scott Macaulay recently wrote, “…what I'd be curious about is whether distribution revenues are separated out from profitability analysis. Typically, a studio's distribution arm will take a distribution fee that is calculated as a percentage of box-office receipts. They also take video and foreign sales fees. What remains -- after gross participation and distribution fees -- is what's credited back against the film's costs. And yes, many films never see the balance sheet tilt into the positive. I've seen many indie-film business plans that simply look at box-office numbers and never try to figure out how much money is left for the producer after P&A, the theaters' cut, and distribution fees...”

Are you kidding me?

Friends, the problem is not with the writers. It’s with an old industry that's long overdue for a complete overhaul top to bottom, front to back, and side to side, just as much as it needed it back in 1945 when (as Warner Brothers was reworking The Big Sleep) Raymond Chandler bitterly wrote, “I am not interested in why the Hollywood system exists or persists, nor in learning out of what bitter struggles for prestige it arose, nor in how much money it succeeds in making out of bad pictures. I am interested only in the fact that as a result of [the system] there is no such thing as an art of the screenplay, and there never will be as long as the system lasts, for it is the essence of this system that it seeks to exploit a talent without permitting it the right to be a talent. It cannot be done; you can only destroy the talent, which is exactly what happens - when there is any to destroy.”

-MM