The strike's afterlife

The studios and networks might not know how much money they can expect to make on the digital domain in the coming years, but it should be clear to everyone at this point that everything is headed to the Web. Whether it’s downloads, streaming, DVDs, or online extras, television is moving to a largely on-demand model that will all be distributed digitally, whether via digital broadcast, digital cable, digital wireless or the Internet.

So it makes total sense to me that when it comes to renegotiating their contracts, Hollywood’s writers felt like they had no choice but to take the hardest line possible. If they didn’t, the deal they struck would be their fate for years to come, and a bad deal means being cut out of tons of income. Not only is the deal that the Writer’s Guild is currently negotiating a watershed for Hollywood’s script writers, it also will be for actors and directors, the contracts for both of whom are up in June. Writers are setting the precedent, and it’s their mandate to do stand up for themselves and accomplish this task correctly.

That said, I also understand the producers’ position. They don’t know how much money they are going to be making in the future, viewership is super-fragmented and thus dropping, and production costs are only going up. Making a deal to pay writers, actors and directors even more seems crazy at this phase of the game. But unless the studios want TV to be made up of nothing but reality TV shows, news documentaries, repurposed syndicated shows and repeats, they need to sit down at the negotiating table and stay there.  They also need to realize that the people who create their shows need to be compensated fairly. That part, at least, isn’t that complicated. But how they get there is.

Whatever the two sides come up with, what they need to be looking toward is not how everyone can make more money for themselves – even though we are talking about Hollywood – but how both sides can work together to change the fundamentals of television production for the better. They don’t admit it, but TV studios and networks waste more money than most people can ever dream of earning. They spend millions on kraft services, car services, trailers, first-class air travel and all sorts of other perks that really have very little to do with the production of a television show. I’m not saying that TV stars shouldn’t have the opportunity to eat during their 14 hours each day on the set – but does there need to be a table freshly laden with food sitting around all day every day? Does everyone have to take the private jet? Can people share town cars once in a while?

Of course, there are other parts of production that are expensive due to creative decisions. For example, it’s a lot more expensive to go shoot scenes in Paris than finding a suitable substitute in Toronto, and there are times when writers don’t need all those extra scenes and changes of locales. Studios already are whittling costs by choosing the least expensive of these decisions, but they could probably make them more often. Shows produced for cable networks already face tighter budgets and manage to be successful anyway. While producers love to put as much money up on the screen as possible, viewers notice much less than producers think they do. A good story well told is worth more to most viewers than all the production extras in the world.

The equation is this: TV is more fractionalized than ever, so studios and networks just aren’t making the same kind of easy money they once did. On the flip side, production houses are spending more money than ever to make TV. It’s clear that something has to give, and this strike is the big wake-up call the industry needs: Hollywood has no choice now but to figure out how to produce shows at budgets their ratings support. No one wants to hear it, or do it, but most of the rest of us spend our lives adhering to budgetary restrictions. It’s time for Hollywood to do that as well.

All that said, I believe the next era of TV will be even more prosperous than the ones that preceded it. TV’s business model is changing, that’s for sure, but just like Steve Jobs and Apple managed to figure out iTunes, some smart and lucky people are going to figure out how to best take advantage of digital video distribution. The winners might not be the established players we have now – and that’s scary for them – but TV will survive, thrive and evolve into something even better and more consumer-friendly than we have today. Ultimately, that’s better for all of us.