• by Wayne Friedman , December 5, 2007

Writer and producers went back to the negotiating table Tuesday to discuss the gap between their two Internet TV proposals--the difference being some $21 million.

The difference doesn't sound like much, especially considering the $1.3 billion contract over three years producers are proposing. But writers are digging in, given the expectation that revenue from the streaming of Internet episodes will rise dramatically over the next several years.

Last week, the Writers Guild of America proposed a $151 million Internet streaming plan over three years. The Alliance of Motion Picture and Television Producers offered $130 million for their Internet plan.

The new proposal from the WGA would tie writers' residuals to the viewership of those streaming episodes. But there would be a base fee to start with.

This would be a new model for writers. In the past, writers' residuals with producers have been tied to a fixed amount--whether a TV show failed or was wildly successful. For example, for a network rerun of an original TV episode, writers now get $20,000. The current AMPTP proposal for an Internet stream of a TV episode pays a writer $250, which is 1.2% of the broadcast residual rate.

The WGA rejected this offer.

But analysts say some of these estimates make sense with the current TV residual model. Recent estimates say the four networks pull in a collective $12 billion in annual prime-time national TV advertising. One estimate from Starcom USA suggested the four networks' video streaming of shows will bring about $120 million, or 1.0% of $12 billion, in 2007.

One thing that hasn't been discussed by the AMPTP is what producers will pay for downloads of TV shows or movies. Analysts expect a proposal from the producers soon.