TV Writers' Digital Financial Formula: Good Drama, Bad Story

What does TV advertising do for TV writers? They pay their salaries, of course? But maybe not in the future.

In response to a possible strike by TV writers, who are demanding they get paid appropriately for their work that appears on new digital platforms, producers are taking a hard line. And their salaries are in question. So hard, in fact, that here's what Carol Lombardini, executive vice president-business and legal affairs at the Alliance of Motion Picture & Television Producers, told Ad Age concerning a possible writers' strike: "How long will television continue to be an ad-supported medium?"

Ah, hah! Threaten writers with a new economic model -- they may not need them as much. But producers may sense that, perhaps, they don't need advertisers, as well.



So what's the alternative? Let viewers pay the writers? The underlying message could be this: Viewers may be more fickle, especially when it comes to online video. They might pay, but it's not going to be easy street.

Admittedly, the AMPTP executive has got it kind of wrong. A year and a half ago, ABC made its groundbreaking initial digital foray, inking the iTunes deal in which Internet users pay $1.99 an episode. Similar deals followed by other networks. But now those digital video deals have moved to a financial formula: advertising-supported video, free to users.

For traditional TV platforms, networks such as CBS and others are looking for other payments for their shows -- retransmission fees, similar to the affiliate fees cable networks retain from cable operators. TV writers face similar financial problems with cable networks and getting compensated for DVD releases -- where residuals weren't on par with other TV video windows. Now, writers don't want to let the next wave get away.

TV networks are their own worst enemy. In recent announcements, executives have been proudly stating that in a few years they can grab hundreds of millions of dollars - if not billions -- in using theirs (or someone else's) Web sites to run their shows.

No wonder writers are thinking strike at the end of October.

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