When the sun rises in Los Angeles on Monday morning, movie and television writers will be ready to head for their assigned picket lines outside Hollywood's studios and production sites. By the time it sets, the entertainment industry's new reality will have settled in: Writers and their employers, who together rode a boom of expanding revenues in the last two decades, are now on opposite sides of the future.
The Writers Guild of America West and the Writers Guild of America East -- in their first industrywide strike since 1988 -- are demanding a sharp increase (from about 0.5 to 2.5 percent of sales) in their share of payments from DVDs and nontraditional media productions that appear on the Web, cell phones and other gadgets. Producers, represented by the Alliance of Motion Picture and Television Producers, have refused. They argue that the new revenue must be used to cover rising costs.
THE BACK STORY
The entertainment industry got smacked in the face with the same agent of change that has affected so many other industries: the Internet. Just a few years ago, hardly anybody had watched a video on the Internet. Today, nearly 75 percent of Internet users say they watch an average of three hours of video on the Web each month, according to a technology research company.
Online video is still in its infancy, but its moneymaking potential is salivating. Consider Hulu, a new online video site launched last week to rave reviews by NBC Universal and Fox's News Corp. The site, which features movies and TV shows such as "24,"The Simpsons" and "Scrubs," is one of the most ambitious online efforts yet by an old-school entertainment company. Meanwhile last week, at the Renaissance Hotel, next to the Kodak Theatre, entertainment and technology gurus huddled at the "Digital Hollywood" conference, discussing new ways to make money from video on the Internet. "Online video is here ... and it's here to stay," said Rebecca Baldwin, general manager of Zap2it.com, a Web video site started by Tribune Media Services.
The result of the standoff is likely to be a gradual halt in the production of all television shows, except for reality and news programs, and of new movies. Viewers will notice fall-out first among entertainment talk shows. "The Daily Show With Jon Stewart,"The Colbert Report,"Late Night With Conan O'Brien," and "The Tonight Show With Jay Leno" have said they will revert to repeats Monday, at least for now.
If the strike is a long one -- and nothing in the embittered negotiations so far signals otherwise -- the dispute may well realign the industry's relationship with Hollywood's creative class.