Forbes has an op-ed from Thom Taylor that distills the WGA/AMPTP dispute perfectly. As Taylor says:

The crux of the dispute is how much writers should earn when their work is re-purposed on the Internet. Studios–contending that new media is too new to develop any realistic business model for it–say that such Internet use is for "promotional" purposes, limiting the pay to $250 for a year of re-use, and $1,200 for scripts original to the Internet. Writers are currently paid more than $18,000 for the first network television rerun of a single episode, and a minimum of $30,823 for a one-hour script.

As a counter-proposal, writers (with the slogan "If they make money, we make money") have proposed a simple payment of 2.5% of revenue from all new-media distribution, which seemed utterly reasonable in the eyes of the industry and the public. Yet such a cut of the "distributors’ gross" was firmly rejected by the studios. Writers are wary of "producers’ gross," as it is dependent on Hollywood’s notorious bookkeeping. No wonder early polls showed as much as 15-to-1 support in favor of the writers (Pepperdine University study, November 2007)….

…While the debate does affect how to divide pieces of the digital media pie (for which writers, after all, create the recipes), the work stoppage is really about the writers’ desire to be treated as partners in a creative endeavor, a concept that studios have moved further and further away from. Residuals reward creators, just as stock options reward employees, or royalties reward patent-holders. It’s funny that with all the MBAs running the show, studios fail to understand that simple principle of commerce.

He goes on to talk about the recent independent deal struck between Media Rights Capital (MRC) and the WGA which laid out a payment schedule for internet work that is forward-thinking and fair.  New paradigm equals negotiated deal for all sides — the AMPTP could learn something here.

Moguls, take Robert Elisberg’s advice and think with your bottom line and not your egos.  As Callie Khouri discusses in her Voices4Action video, the studios cannot scream "unfair" at writer requests for pennies on the residual end credibly while touting huge potential internet profit margins and cutting deals with Apple for even more new media distribution bucks.

Especially in light of the NBC Universal’s self-reported braggidocio that they could see more than $1 Billion dollars in digital revenue by the end of this year.  Given the recent round of contract cancellations under force majeure contract provisions, studio posturing looks awfully hollow:

By eliminating the deals now, the studios will no longer be obligated to pay the writers even if the strike ends in the next month or two. The action saves the media companies tens of millions of dollars in payments, and is the first real sign of belt-tightening caused by the strike.

But hey, it’s just hardball and lunch at the Ivy on the company dime to the AMPTP. Especially factoring in the increased profit on the bottom line in the short run from scuttling these contracts all at once.  Too bad the moguls of the AMPTP are stuck in the past, because the Weinstein Brothers and MRC are moving ahead into the future with new movies and shows.

Long-term profits go to the swift, not the stodgy, AMPTP.  Better get back to the table…before the WGA, SAG and DGA figure out a way to bypass your old-school dinosaur tactics altogether.

(YouTube of Pet Shop Boys.)