John BowmanNow that the Kabuki Theater of negotiations is officially underway, I thought I’d reprint John Bowman’s opening remarks made on behalf of the WGA Negotiating Committee.
I really love this speech.
I love it because it’s the perfect tone. Calm, reasonable, business-oriented, without a trace of Norma Rae nonsense, no whiff of the words to “Joe Hill,” and no detectable mouth foam.
All in all, a huge step forward for us.
Naturally, Bowman had to put in plugs for a better home video residual rate and jurisdiction over animation and reality, but everyone knows those are essentially DOA. This fight is about downloads, and he’s positioned us strongly. With generous references to authorship and intellectual property rights, Bowman sure sounds like an Artful Writer to me.
I like what I’m hearing from my union right now, and it’s been a while since I could say that.
Here are John’s remarks.
First of all, I want to congratulate our corporate partners at CBS, Time Warner, News Corp., Disney, Viacom, and NBC-Universal on what appears to be another great year for entertainment revenues and profits. Box office is up, and broadcasters are getting ad rate increases across the board, driven largely by digital content created by many of the people in this room. We are all of us very fortunate to be working in an industry that is thriving. It is thriving not only because of the content created by members of the DGA, SAG, AFTRA, and the WGA, but also because the CEOs of these companies are proving to be extremely adept at finding ways to monetize the Internet and other new technologies.
There is a real disconnect, however, between what the companies are reporting to Wall Street and what they’re saying to the talent community. Investors are hearing about the changing landscape in entertainment and exciting new markets to exploit. In contrast, the AMPTP communicates nothing but problems to the Writers Guild. Problems like-and this was mentioned by AMPTP at a recent press conference-ad skipping, even though NBC Universal had just announced a one billion dollar DVR deal. And while WGA member revenues have not kept pace with industry growth-we are a line item that is definitely under control-the companies balk at giving us a fair and reasonable share of the industry’s success.
I don’t think anyone in this room is arguing about the right of writers, actors, and directors to residuals. As collective authors of a work, we are entitled to a portion of the revenue generated by that work. But you have publicly stated that you no longer want to pay us residuals on shows that are not in profit. Here’s why that is untenable:
Writers are a cost of doing business. They have no say in production, marketing, on advertising and publicity, directors, casting, the decision to spend tens of millions of dollars advertising, etc. They can’t be expected to be paid from profits when they have no say in the costs which affect those profits. Profits are under the control of CEOs and their executive staffs.
Intellectual property has rights, just as physical property does. Management has no problem paying the person who made the DVD box before a film turns a profit; they shouldn’t have any problem paying the artists who created the intellectual experience that came in that box either. To claim that intellectual property has lesser rights than physical property is a dangerous argument for anyone in our business to make. You are making the same argument to us that digital pirates make to you.
According to Hollywood accounting, The Simpsons is not in profits. How can we trust that kind of bookkeeping? What other business but ours has the accounting term, “monkey points?”
Residuals from shows not in “profit help” support a writing middle class, and keep writers in the business until they finally create that one great thing. Do away with residuals, and you do away with late-blooming careers like Marc Cherry and David Chase - they couldn’t afford to stay in the business. Your proposal transfers money from developing, promising writers, actors, and directors who need them the most to established pros who need them the least. It’s bad for the business.
Ultimately, your complaint is not about unprofitable shows, it’s about the portfolio nature of the entertainment business. Risk is spread out among many shows, some of which are unprofitable. This economic fact will never be changed, even if writers work for free, as you propose they do on the Internet.
Now let’s turn to your proposal that we do a three year study before bargaining about the Internet. Your reasoning is exactly the same as it was in 1985. Models haven’t emerged, the environment is uncertain, we’ll take care of you later. Well, we know what happened then. Home video and DVD sales soared, and nobody got taken care of later. But this isn’t 1985, when TV writers didn’t envision that their shows would someday end up on DVDs, and they’d get stuck with a .3% return. This time, TV writers can see how important the Internet is - our shows are already there. And, unfortunately for your argument, positive economic events are daily giving the lie to your doomsday scenario.
But if you insist on a study - I used to do studies for a living - I’ll give you one now. The Internet is a distribution channel with no major fixed costs, no media costs, no shipping or handling costs, and margins that are the envy of even the cigarette industry. Though you lose your monopoly on distribution, you have a strategic advantage that nobody else has: strong relations to the talent community. Above all else, nurture this relationship. If you don’t-if, for instance, you insist that members of that community not get paid for three years, or get paid, at most, a .3% residual rate, what possible incentive would they have to work for you? What incentive do they have to help you fight video piracy, when they’re only getting .3%? If you don’t pay them someone else will-Yahoo, Youtube, who knows? It won’t happen overnight, but it will happen, and very quickly indeed, if you bargain so unreasonably that you force talent to go elsewhere for a fair deal. Of course this study is flawed, but then all studies are - you can make them come out any way you want to.
I can imagine an NBC-Universal Wall Street press conference, 18 months from now. Revenues are down, profits are down, due to a work stoppage which you, the AMPTP, collectively, forced. Shareholders are restive. They ask the company this: “Your industry paid 84 million to fire Tom Freston, 300 million to invest in “Last FM.” Yet at a time when it was absolutely crucial that we establish a presence on the Internet, you chose to alienate content providers, the best strategic advantage you had. And you made this catastrophic decision over how much money?
Today you’ll receive our proposals. They are designed to help writers keep up with the overall growth of revenues in our business. Our operating principle is simple: if you get paid for the reuse of our material, we get paid. So let’s now back away from the edge, get real, and get to work. Studies and profit-based residuals are not serious proposals. They have no legitimate basis in the economics of this industry. They are non-starters for this committee and membership. Our response to such proposals will be a polite “no thank you.” But there are serious issues to discuss, issues that come directly out of our real relationship. Those issues are:
How we will share new media income
How we will produce material together for new media
How we will deal with the non-union shell companies that you’ve created to avoid paying the talent, especially on reality and animation
How talent will get a fair share of home video money
How we will work together on issues like piracy
How we will work together to make sure that new technologies are a boon for all of us
These are real issues. Writers and the talent community deserve to keep up and we have not been. All of our proposals will be focused on that central fact. Writers have to keep up with the industry growth that we help create. It is simple and fair. We look forward to your response, and thank you.
