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Writer's Strike Hinges On Uncertain Economics

Talks will resume after Thanksgiving, but the writers and TV networks still remain far apart on the issue of new media compensation. Writers feel shortchanged because they don't make a dime from digital downloads or online ad revenue gleaned from the shows they write.

However, neither do the studios. While most TV and cable networks sell their shows online or distribute them via ad-supported services or on their own sites, they do so at a loss. Both parties are trying to protect their future: Writers want Viacom and Time Warner to eat the cost as part of their overall investment in online media; these media giants have shareholders to answer to.

They're also unsure about the economics of Web syndication. Video advertising is in its infancy, and digital sales are paltry. Meanwhile, piracy adds yet more question marks to the issue. With an uncertain business model, it's difficult to drum up a binding, long-standing contract between the parties. At the end of the day, the timing of the writer's strike is perhaps a little (or a lot) too early.

Read the whole story at Los Angeles Times »

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