• by Seana Mulcahy , December 3, 2007

Well, you know the writer's strike has been going on for about a month now. For those of you who don't, I'll give you the quick overview. The Writers Guild of America went on strike Nov. 5. The major issue fueling the strike is residuals to writers for new media. The producers (major studios and networks) say there is no way to predict the future and determine success. The writers think DVDs.

If you are reading this then most likely you live in the world of new media. I'm not sure if you are like me and you cringe at the term? To me it has meant anything but traditional and is nebulous at best. In order to figure this out we need to see new media as multi-platform, or meaning different channels of delivery. For many of us digital folk, it helps to understand just what the heck traditional is in the first place.

For TV, when you hear the term "first run," it means something fairly straightforward: like the episode of "Desperate Housewives" last night. Turn on ABC at 9 p.m. EST and it airs for the first time. So first run pays salaries, not residuals. This type of programming is supported heavily by TV advertising. Second run refers to a show -- not a season -- being aired again. Right now there are about 300 shows being rerun in syndication. Think "MASH," "Star Trek," "Seinfeld." Most shows want to go into syndication; it's additional revenue. Often programs are not economical until they go into syndication. Shows generally need a certain number of episodes in the can -- it can be 100, or a full seasons' worth -- for a series to be sold into syndication.

When you take television online, the math gets fuzzy. Producers haven't figured out a way to work out the advertising model. Certainly this format is an opportunity for rich media, online display ads and online product placement.

For (offline) DVDs, residuals are based on a 20% royalty on net receipts and then the residual is applied. This is even more enticing with high definition (HD) and Blu-ray technology coming into the mix.

For the online world, this is again fuzzy. There are services that allow users to watch a show once for a fee and some multiple times. Over the past few years we have seen the success of companies like NetFlix and Blockbuster online. Consumers pay a small monthly fee to access DVDs for a length of time with no late fees, etc. This of course has spawned an illegal market online. Want to watch any movie or show and you can most likely find it for free online. It's a hacker's paradise.

According to the online market research company eMarketer, spending on Internet downloads of TV programs will hit $235 million this year and increase to more than $900 million by 2010.

Nonetheless, there is an entire industry trying to make money off of reusing content. I don't think anyone could predict a model that would encompass residuals as they relate to all new media. How could they, when the industry continues to evolve as the landscape continues to slide?

I teach at Emerson College, and my students have been paying close attention to the strike. They have asked all the right questions: How is it affecting advertisers? Are people renting more DVDs? Are they going online more often to watch movies? When will it end? I'm afraid I didn't have many answers for them -- except to say that we are all hoping the strike will come to some sort of resolution soon.

As a result of the strike, there has been speculation that viewers are going elsewhere for entertainment. What do you think? First off, it's a total bummer. I have never been a part of a union or in that situation. It has to be tough all around.

In the meantime, we'll still stream and watch shows and movies over the Internet. We will continue to make and place traditional and rich media display ad units online. However, new content cannot be developed until the strike comes to an end.