I have studied labor-management relations for nearly 30 years and direct the Center on Conflict Resolution and Negotiations at the University of Pittsburgh. I have worked with both labor and management on developing and executing bargaining strategies.
I offer some thoughts on the ongoing strike by the Writers Guild of America against the Alliance of Motion Picture & Television Producers in the hope of bringing the parties back to the table, for their sakes and the sake of the industry to which they are devoted.
My experience is that most strikes result from the fact that someone has tunnel vision, wearing blinders that prevent them from facing a problem. The strike by the WGA, like the recent strikes by the United Auto Workers, results from a confluence of events that is beyond the control of either party.
The entertainment industry is in the throes of a technological revolution that is disrupting business and economic models. The revolution is advancing and changing more rapidly than previous ones, such as the advent of television and the proliferation of cable TV.
Neither party knows for certain what the industry will look like 10 years from now, or even three years from now. But most agree the potential “new media” market will be vast. Both the AMPTP and WGA want to claim a share of this emerging market. Herein lie both the problem and the opportunity.
In labor-management negotiations, it does absolutely no good to point fingers or try to pin the blame on one side or the other. It serves no useful purpose to engage in name-calling. The parties must focus on the problem.
In a nutshell, the problem is twofold. First, what is the jurisdiction of the industry over which AMPTP may legitimately lay claim? Does it include the evolving forms of new media? In a similar vein, what claims may the WGA make over various forms of programming, such as reality shows, that lie outside of its traditional jurisdictional boundaries? Second, how should the parties divide the revenue they can capture once they legitimize their jurisdictional claims?
These are classic labor-management struggles epitomized in the current standoff.
I urge the parties to focus on their common interests lest they watch their grasp over an industry vanish, as the U.S. auto companies have seen their share of the market shrink.
The new media offer a great opportunity to expand and extend the life of the collective efforts of producers and writers. There are widening avenues to reach the end user, the viewer, through numerous channels. The AMPTP and WGA need to keep their eyes on the ultimate prize, i.e., finding ways to generate and recoup revenue from these multiple sources of viewing. Both should follow the product, through alternative channels, to the viewer, capitalizing on new opportunities to generate revenue and compensation.
The parties should realize the common dangers they face that have humbled both labor and management in other industries: pricing themselves out the market and obsolescence. Sound familiar? Look at the picture in much of U.S. manufacturing. If the industry can generate more profits from new media, then compensation will follow.
When the parties face an uncertain future and rapidly changing technologies that fundamentally alter the economics of their industry, they should refrain from locking themselves into agreements that impose structural costs that diminish their competitiveness.
The AMPTP and WGA face a very fluid marketplace that will radically change the structure of their industry. The big players on the block 10 years from now may be relatively new, or even companies that don’t exist today. People across the globe have many opportunities for entertainment besides those that fall within the current jurisdictional claims of either party.
Technology also enables creative minds to deliver similar content in new venues at much lower costs that can replace more conventional forms of entertainment. These trends will be accelerated when the television, computer and telephone are fully integrated in most households.
My recommendation to the parties is that they put pride and egos aside and return to the bargaining table. They should focus on two objectives: expanding the AMPTP’s industry jurisdiction so that it can capture more of the revenue stream; and devising a formula to share the revenue with the parties that produce the product, without making themselves structurally uncompetitive. The formula may vary depending on the size and profitability of the industry captured.
Neither party benefits from a strike. Neither will be able to recoup the losses they have already incurred. A long strike risks alienating viewers and encouraging them even more to find alternative sources of entertainment.
In the final analysis, the fate of both parties will be determined by finding the common wisdom to change the way they do business. I know that the parties have dug in their heels, but I remind them of the adage: “Be careful what you wish for, because you just might get it.” Remember past agreements?
Marick F. Masters is professor of business and of public and international affairs at the University of Pittsburgh.