Jeffrey Katzenberg, CEO of Dreamworks Animation SKG, says he is "fearful" as the gap between Hollywood studios and writers is the largest he's ever seen.
"I don't think I've ever seen a wider gap in the bid and the ask on where we are today. A lot of it is emotional and rhetorical and a lot of it is substantive," he said at the Merrill Lynch Media and Entertainment Conference.
The existing agreement with the Writers Guild of America and its 12,000 members is set to expire on October 31. The Alliance of Motion Picture and Television Producers and Guild representatives is set to resume on Wednesday, after a nine-week break.
At the crux of the negotiations are the changes that have come about from additional means of consuming content, which under the current rules which represented a different world that has changed from simple broadcasts and theatrical releases, doesn't have writers partaking in the profits in the way they want. Things like the Internet, DVDs, and a variety of other platforms.
Studios of course have set aside income in case of a strike, but if it becomes prolonged, it could hurt many of the studios.
Katzenberg says if it went beyond six months, it would cause a lot of problems for Dreamworks. It seems odd that he would give away that information in the midst of negotiations.
A major problem the studios have are the industry is still in the middle of change, with no real numbers out there to help guide them in the negotiations.
If they give away too much, it could do a lot of harm for the next three years of the contract. I think that's why there's some fear in the negotiations. They fear a prolonged strike and shutdown, and they fear giving away the farm.
This is another way of saying there just isn't the information available and a long enough track record to make intelligent decisions, and yet they must make decisions. If they make the wrong decision, it could be devastating and hurt an industry that is just starting to take off after a couple slow years.
The reason there is such a big gap is because the producers are trying to protect themselves because of this lack of information. Evidently the writers don't have any sympathy with that position.
I say let them expire. The Hollywood unions will only serve to slow down technology. With the explosion in distribution channels, we've also seen an explosion in talent. If the studios don't want to pay union wages, I don't blame them, especially when there are so many talented writers who would love their shot. The industry needs to evolve because in the long run, there is no way they can survive the tsunami of user generated content.
Posted by: Davis Freeberg | September 18, 2007 9:03 PM | Permalink to Comment