Writer’s Strike Ultimately Affects Retailers
The Hollywood writer’s strike that began last month is a remarkable event in that its success or failure depends on both sides understanding the nature of digital content, especially its monetization.
Unlike the writer’s strike nearly 20 years ago, this one is noteworthy because it’s rooted in the economics of digital media. While the earlier strike led to the widespread adoption of cable TV and the birth or reality shows, the stakes are much higher since it involves digital distribution, broadband and digitally packaged entertainment. Due to the cause of this strike—residual payments to writers once a show has been converted to DVD and distributed over the Internet, the future of packaged entertainment hinges on the outcome.
Whatever the outcome, retailers will be impacted. In the short term, DVD sales and Internet downloads could increase as fewer scripts and productions make it to the screen. But the long-term issue is how digital content will be monetized and how studios, producers and writers will divvy up the pie.
The most perplexing aspect of the position taken by the studios and producers is there is no money to be made on digital content. Even Michael Eisner claimed that the strike was premature because there is no money being made and that the only company cashing in on the digital experience is Apple. Eisner went so far as to say that the strikers should be picketing Apple, not Hollywood.