Hard Won, but Exactly How Much?
Digital Potential Anybody’s Guess
The Writers Guild of America strike, and its proposed settlement, established that everyone thinks there is money to be made online. But how much is anyone’s guess.
While scribes won jurisdiction over new media when the three-month writers strike ended last week, the dollars in that digital future are unknown, network executives and analysts agree.
The outlook will be murky for some time, said Marshall Herskovitz, co-creator of TV shows “thirtysomething” and “My So-Called Life” as well as the current Internet series “Quarterlife.”
“This agreement is a sort of tacit admission by both sides that we don’t know what the future is going to hold,” he said. “It’s kind of an interim agreement that both sides hope can be adjusted in the future.”
The television networks and studios had little to lose by agreeing to give the writers a cut of advertising revenue from shows streamed on the Web, given how small that base number will be for the foreseeable future. Still, it was vital for writers to establish the precedent for getting paid for their work that ends up on the Internet.
“It’s still a trickle compared to TV,” said Bruce Leichtman, president of Leichtman Research Group. “It’s tiny, tiny revenue. Of course the writers will be happy and say they secured their future, but they probably would have been better off securing that future when there was real money to be made.”
Last week a study by Parks Associates Senior Analyst Harry Wang found that advertising related to Web video, both display and in-video ads, will reach $6.6 billion by 2012.
While writers are entitled to some of that money under the new agreement, it’s not clear whether both display ads and streaming video ads will count toward the gross receipts, he pointed out.
“We are working fast and furious to figure out exactly what the new provisions mean operationally,” said Vivi Zigler, executive VP of NBC Digital Entertainment. “Once we can figure out both our rights issues as well as our guild issues, then we can figure out what we can afford to do.”
At the very least, the settlement opens up a commercial exchange between writers and studios, she said.