A wait-and-see deal?

Today, Edelman and Mazin evaluate the proposed contract in the context of a rapidly changing digital market. Yesterday, they debated the difference between labor and management in the strike. Later in the week, they’ll discuss why writers should or shouldn’t be given special consideration with royalties, as well as new media, the tactics of the two sides in the strike and more.

An impasse over the digital unknown
By Matt Edelman

This is a question that’s been on my mind since the strike began. It truly does not make any sense that the two sides are being so intractable. In Internet time, this deal would end in the equivalent of the first five minutes of a two-hour feature film.

What does an audience learn in the first five minutes of a film?

• The identity of the main characters.
• The premise of the main story.
• The primary conflict that sets up who will be the protagonists and the antagonists.

But in every great film, what happens after the first five minutes?

• The character identities are called into question.
• The story takes unexpected, invigorating twists and turns.
• The good guys often turn out to be the bad guys, and vice versa.

We’re barely five minutes into the digital media marketplace movie. So much will change in the next three years. Every supposition being made by the studios and the writers about where their revenue will be generated will be challenged, and most will yield as many surprises as classic films such as “The Sting� (or, for TV fans, like the good seasons of “24�).

Technology is advancing at a staggering rate. High-definition video soon will be more efficiently delivered via broadband than any other distribution platform. As more homes purchase set-top boxes and televisions with broadband connections, the distinctions between television and the Internet will disappear. Every piece of video that a person wants to see will be available on a personalized entertainment “home page� on whichever screen or device the individual selects. We won’t even be turning channels; we’ll just be clicking on titles, brand names and an occasional logo (it’s actually going to be fun seeing Google, Yahoo, Apple, cable companies, satellite companies, telephone companies, TiVo and others all compete to become the provider of our “home pages�).

The question really should be, how far into the future will this vision become a reality? Three years? Five years? Ten years?

I would lay the same odds as the New England Patriots winning the Super Bowl that we’re talking five to 10 years, largely because the studios will fight this eventuality almost as much as the music companies fought the rise of MP3s — the implications for them are truly frightening.

So why all the fuss right now?

For the writers, it is becoming more evident that the negotiating representatives are still bitter about the drubbing the Writers Guild of America took from the studios when the infamous DVD terms were struck. I’m not saying the writers’ current position is unwarranted, but they are fighting over relative peanuts compared with what will come out of even a slightly better DVD deal. Home video, as increasingly represented by video-on-demand and other subscription services in addition to rentals, will remain a much more lucrative business for the studios (and therefore the writers) than the Internet in the near term.

For the studios, they are fueling the writers’ fears because of a real concern that audiences will leap to broadband viewing faster than the studios can maintain tight controls over distribution. They’re certainly doing a better job than the music companies in fighting the future, but the consumer always wins, and the consumer wants the future — now.

I don’t pretend to have the ultimate solution, but with all of the uncertainty, the focus of the two sides should be about the “relative� value of new media revenues compared with traditional media revenues. That would be a forward-thinking approach, not a protectionist, defensive posturing that clearly could cause catastrophic results for everyone (and really annoy the most important constituent — the viewers).

I don’t know about you, Craig, but if I were a writer, I’d be quite happy to base my fees from the Internet exploitation of my creations for the next three years on the relative value of Internet revenues in the overall studio revenue pie. That’s an idea someone in the rank-and-file should send up the chain of command.

Best,
Matt

Matt Edelman is the chief executive of PeopleJam www.peoplejam.com), a lifestyle website designed to enable people to make better life decisions through video, discussion forums and social networking. He has been a producer and executive in the film, television, Internet and mobile industries, where he has developed scripted, reality and interactive projects in live-action and animation.

Temporary deals are a permanent trap
By Craig Mazin

Matt,

You’ve chosen an analogy close to my heart. Because I write movies for a living, I can advise you now to not start writing movies for a living.

The beginning is everything. Or as the late, great Billy Wilder put it, “If you have a problem with the third act, the real problem is in the first act.�

No matter which analogy you choose — the infant in the womb or Adam and Eve in the garden — it’s simple common sense that it’s the mistakes in the originthat end up haunting you.

You refer to the infamous deal on DVD rates, but it wasn’t a DVD rate when it was set in 1985. No one on the street had even heard of DVDs, although I’m sure they existed in a lab somewhere.

The rate was for VHS tapes. At the time, we were told by the Alliance of Motion Picture and Television Producers that the tapes were expensive to produce, that the market was nascent and that asking for more than 0.3% of their gross would kill the baby in the cradle — but as soon as they got home video up on its feet, they’d come back to us with a fairer deal.

They didn’t.

Then came DVDs, which fell under that same formula.

Billions of dollars later, we’re still suffering from the original flaw: the glitch in the first act, the errant bit of genetic material, the bite of that stupid apple in Eden.

Getting a fair rate on Internet distribution isn’t about avenging the bad home video deal. It’s about not repeating it.

You suggest that attempting to figure out the future of the Internet is akin to palmistry.

It’s not.

Here’s how this works.

From now until the end of time, any work distributed over the platform known as “the Internet� (defined as the worldwide, publicly accessible series of interconnected computer networks that transmit data by packet switching using the standard Internet protocol) should be subject to a fair and decent residual rate for the artists who make those works possible.

I don’t need to concern myself with your idea of ratios of Internet revenue to total revenue, because I have this nifty bit of advanced mathematical technology called “the percentage.� If you make very little money, so will I. If you make a lot of money, so will I.

Simple as that.

Sure, we could attempt to negotiate a “truly� temporary deal, like the truly temporary deal we signed in 1985, which has truly screwed writers, actors and directors for nearly a quarter of a century now.

The last thing we should do is fall into the trap of negotiating a “temporary� formula, which will no doubt be neither good nor temporary.

We should negotiate a good, fair formula that lasts 10 years. Or 20 years.

That’s how we’ll get labor peace in this town.

Truly.

Craig Mazin wrote and produced the hit comedies “Scary Movie 3� and “Scary Movie 4� and recently wrote, produced and directed the feature film “Superhero!,� coming next spring from Dimension Films. He served on the board of directors of the Writers Guild of America, West from 2004 to 2006, and he runs the popular screenwriting blog The Artful Writer.