The Writer’s Strike In Plain English.

It’s the day after Christmas, so I won’t overload you with controversial theology or economics. Just something Anna and I talked about on the way home from Alabama.

Here’s the deal. The writer’s last contract recently expired. So instead of signing a new deal that they would be locked in to for the next 10-20 years, they decided to re-negotiate their terms. The terms they are wanting to develop have to do with internet royalties for television shows.

In a couple of years, our television sets will essentially turn into our home computers. We will no longer rely on satellite or cable for our television. Instead, our programming will be delivered via the internet. This doesn’t mean that you will login to a website and watch a tv show ala a YouTube format. This simply means that your programming will be delivered to you by high speed internet.

This changes the field in a lot of ways. In the same way that the internet has flattened out the music industry – reallocating power and profits – the internet based programming will flatten the television industry. With the advent of TIVO and streaming television from websites (the current internet/television option) the primary revenue stream for the networks (commercials) is drying up.

The networks are now scrambling to figure out a way to monetize these new non-commercial venues. However, they are following in the footsteps of the music industry and dragging their feet in their effort to create new and innovative ways to do this. The major networks are experimenting and for the time being failing miserably with these innovations.

Also, these days millions of dollars are made off of the sell of DVD’s, a revenue stream that was not available 10 years ago. The writers contend that they should be brought into this revenue sharing as well, instead of relying on revenue sharing only from syndication rights.

So the writers want to be paid for what they create every time what they create gets sold. And the networks are making pennies on the dollar to what they were making with commercials.

And therein lies the problem.

The issue is not too different from what is going on in the music industry. The internet has an interesting way of flattening out power and money. Those with little power (i.e. influence) and no money can create something that gets the same amount of views as a powerful network like NBC. This is what Andrew Keen warned about in Cult of the Amateur.

But because the internet is built on the back of open-source philosophies – no one person owns it, no one person controls the profits – it puts everybody relatively on the same playing field. And in a fitting way, puts power back in the hands of the consumer.

The challenge for the music and television industries is how do they monetize something that is nearly impossible to monetize. Or at the very least is not able to be monetized now. Because the technology and bandwidth aren’t quite up to par yet, the industry is in transition. And because the majority platform and model is still television & commercials, this is a really awkward time for both parties.

The writers want to make sure they don’t get screwed for the next 15 years as this technology comes into play and the networks don’t want to share any of the modest profits they are beginning to enjoy.

For what’s it worth, I’m with the writers. If you create something out of nothing, you should be entitled to a piece of the pie from the profits that it generates. Whether that be syndication rights, merchandising, or internet programming.