Monday marked the start of the Writers Guild of America’s industry-wide strike. The decision came over the weekend after talks between the studios and the WGA broke down, with the media conglomerates still unwilling to pay residuals on “new media”…web video, streaming TV shows, and the money made from such content. There is also the issue of a higher rate for DVD residuals, the old contract rate was established back in the early days of VHS and it seems that nobody at the time anticipated how that landscape would develop as DVDs came into popularity. According to The Hollywood Reporter,

“writers get 1.8% of just 20% of wholesale DVD revenue. That formula translates to about $64,800 flowing to writers of a DVD that sells 1 million copies. The WGA would like to see that formula doubled, or more, when it comes to the selling of Internet downloads — even if, right now, sales of such are paltry when compared to DVDs.”

Regarding the online issue, Robert J. Elisberg has summed up the issue in a nutshell:

When movies and TV are streamed on the Internet or downloaded, and the companies make money from that, the WGA want to be paid, as well. When companies ask Writers Guild members to write original content for the Internet, and the companies make money from that, the WGA would like the writers who do the work to also get paid…..You know much money the companies want to pay writers for the use of most of their work on the Internet?
Zero.
Yes, you read that right. Zero. The studios contend that they can show an entire TV show, an entire movie even, and make money from it, but they don’t want to pay a single penny to writers, because they want to call that “promotion.”
Zero.

The WGA is about 12,000 members strong in both film and television, and has been getting a tremendous amount of support from the bigger names in the organization. Some have said that the strike could potentially go on for as long as four months, and the writers are suggesting they are in it for the long haul. But what exactly will happen now that all these writers aren’t writing?

Consider that the last time the WGA went on strike was back in 1988. That strike ended up costing the entertainment industry roughly $500 million dollars in lost revenue. We are already seeing the fallout in Late Night television and shows like The Daily Show and The Colbert Report. Basically that entire genre is running re-runs this week. Dramatic TV series like Grey’s Anatomy, Lost, 24 and many many others will soon be affected as they generally only tape a few episodes ahead of broadcast. The second half of season production on those shows will likely be shut down. Live TV series like Saturday Night Live will be affected, but I did read that Dancing with the Stars is plugging onwards without their writers, with the hosts ad-libbing or writing their own material. Daytime shows didn’t escape either, all of the Jeopardy writers are participating in the picket lines. This is a high-profile strike, and I wonder how long the studios will sustain the public opinion pressure…in fact, Presidential hopefuls Barak Obama and John Edwards have both chimed in on the issue, showing their support for the writers.

In response, consumers will probably see a glut of low-quality Reality TV programming, only with really bad writing for the hosts. Studios will probably resurrect more popular older shows and rerun them on a regular basis. Theaters may have a lot more foreign films to offer, as they aren’t covered by the Writer’s Guild of America and can be shown because of that loophole. That may be the only positive here, actually…I wish we had access to more foreign films in mainstream cinema…but I digress. If the strike continues into next year, expect spending on new TV pilots and film development to cease early in the spring when the industry normally would pump a lot of money into developing new content. The fallout in theaters will probably be felt most once we are well into 2008.

For continued updates on the WGA strike, LA Times has a very detailed blog with continual updates and many quotes and stories from the strikers. I recommend tracking it for the latest news on the topic.