Hollywood 2.0: Why the TV Industry Might Lose 28% of its Audience Forever

By: Rustycat | in: General, Music, TV |

[Originally posted on the YouLicense blog]
It’s no big secret that the 2007 Writers Guild of America strike is bound to change the future of television, as we know it. Will it boost internet TV? Will our favorite TV shows like Grey’s Anatomy, Lost, 24 ever come back? Will the strike ever end? Will there be any way of turning back for the Hollywood studios?

All these questions were a huge factor taken in to consideration by the Alliance of Motion Picture and Television Producers (AMPTP) and the Writers Guild of America before entering this historic strike that will shape the new industry forever. Hollywood 2.0.

A top industry consultant divulged an interesting theory to me. The WGA’s last big strike took place in 1988. It revolved around residuals for hour-long shows along with reduced pay for reruns. Due to the five month strike, the big studios had to push the fall season to the winter. Leading soap operas had to employ low budget writers who had reduced the shows’ quality. It is said that 10% of the TV viewers stopped watching television forever! This fact cannot be supported with 100% empirical data, but I glanced at some Nielson graphs over the web and they go a long way in proving this theory. It is also rumored that this strike gave birth to reality television. Fox Networks started the successful ‘Cops’, thus making way for many unscripted television shows that would dominate the airways in the future. The estimated loss of revenues that the AMPTP suffered was over 500 million dollars.

TV viewing changed forever, and that was before a new factor came to being – The Internet.

The 2007 strike – what’s it all about?
Every three years the WGA, representing over 12,000 writers for film, radio and television in the US, negotiate their contract with the AMPTP - the big studios paying the bills. Among many disagreements were the issues of DVD residuals, union jurisdiction over animation and reality program writers (they’re saying it’s a reality show, there are no writers…) . But the biggest is issue is compensation for “new media”– content written for (and/or distributed through) emerging digital technologies (you, know, the internet). On November 5th, following a failed round of negotiations the WGA began to strike.
As in music, writers rely on royalties/residuals from DVD’s sold, reruns played and airing of their work on other media formats like the internet or mobile while they are sitting at home waiting their next gig. The WGA wants to bump residuals from DVD sales from 4 cents per DVD sold to 8 cents. More importantly, as it stands, the writers don’t get a nickel when TV shows and movies they’ve written are streamed via IPTV, internet downloads, smart phones, or any other online streaming solution.
Meanwhile, our favorite TV programs are dropping like flies. Check out this great list on Wikipedia to see what aired and what’s still to come.

Internet Television
Whichever way this strike plays out in the near future the real winner is the internet. There are hundreds of well funded online TV platforms like Joost , Babelgum, RayV, Knocka TV and many more ready to make their big move. Millions of viewers are emigrating to these newly launched platforms. Millions of viewers prefer watching 3 minute videos on YouTube and Metacafe over the traditional TV shows. The longer the strike continues, the more accustomed these viewers are to getting their fix online.

And so, a projected 28% of the traditional TV audience will stay online and leave television behind. Did the writers see this coming? Why start a war on online residuals when most people are still glued to their TV sets? It’s the future, and the writers know it. More so, the writers are actually negotiating with venture capitalists in an effort to bypass the Hollywood studio system and reach consumers with video entertainment on the Web.

The future of music 2.0
So what has this got to do with music? Apparently a lot.
Music licensors have also been affected by this strike and are suffering considerable business loss. If there are no shows on TV, there are no 30K$ TV placements. But it’s the current strengthening of online television that will bring many new opportunities for musicians and personnel working in the music licensing arena. As Gerd Leonard, Music guru, so eloquently put in a previous post:
“10s of 1000s of new TV, online video, and gaming channels will be born in the next 2-3 years – and all of them will need music to go with the visuals. Millions of songs will be synched to video – this market will positively explode.”

I couldn’t agree more.

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Posted on December 28, 2007

Comments

5 Responses to “Hollywood 2.0: Why the TV Industry Might Lose 28% of its Audience Forever”

DThompson on December 28th, 2007 8:17 pm

In Hollywood, writers are consistently the most undervalued part of the creative process. I say strike and let broadcast TV go straight into the sunset. Better to watch Lost on the internet anyways, fewer commercials, clear picture, no hangups.

Charbarred on December 29th, 2007 3:13 am

Hmm…but how would you watch Lost if no one is writing new episodes?

DThompson on December 29th, 2007 12:02 pm

The internet will take care of that.

Charbarred on December 29th, 2007 5:51 pm

Praise the mighty Internet!

Gerd Leonhard on January 18th, 2008 3:43 am

thanks for the link. You guys may like this short video I just published, on the topic of ‘paying with attention” http://www.youtube.com/watch?v=Z4gPVW25nV0