Like so many other facets of modern life, technology is rapidly changing the way Hollywood works. The Internet, mobile devices, TiVo and similar innovations give audiences a chance to watch movies, television shows and other content in ways undreamed of just a few years ago.
The negotiations between producers and writers over a new contract have taken place in the context of this paradigm shift in how entertainment is distributed and consumed.
That, in turn, has led to a lot of confusion about what the writers' strike is all about, even among many with a stake in the outcome. Some respected writers have even made public statements about the issues that demonstrate a fundamental misunderstanding of what is on the table and how they are being paid.
Given the complexity of the residual system itself and the often technical nature of the proposals submitted by writers and producers in their recent negotiations, such mistakes may be understandable. But they contribute to an atmosphere where bridging the gap between us seems harder than ever.
That is why we would like to set the record straight on key issues.
First, how should writers be paid when content is offered in "new media" formats, such as on the Internet?
It is important to make clear that writers currently do receive residuals for digital downloading (regardless of whether the download is temporary or permanent).
That means every time anyone pays for movies or television programs on the Internet or through other new media channels, writers are getting paid. So the notion that we are not sharing new media revenue with writers is simply not correct.
The Writers Guild is proposing to change the formulas for digital downloading. For electronic selI-through (like buying a movie on iTunes), the Guild is seeking at least a 700 percent increase over what writers currently receive, and more than a 200 percent increase over what they receive for Internet "pay per view." There is no way that these increases can be deemed reasonable.
A second issue of concern for writers and producers is this: what happens when content is streamed over the Internet for free?
The AMPTP has offered to pay writers a percentage of the revenues the producer receives from licensing streamed content on the Internet. However, the Writers Guild is asking that writers get a percentage of what the Internet site owners receive in advertising revenues connected with the streaming content, even if producers are getting none of that money themselves.
Simply put, what the Writers Guild is asking for has no precedent. No labor agreement in history has given writers, actors or directors a portion of advertising dollars. There is no way that this change can be deemed reasonable.
We believe common ground can be found once reasonable people take the time to understand the issues. We hope this letter can help move us all closer to that goal.