• Financial Times, Friday, December 14, 2007 11:30 AM

The Hollywood union strike between the Writers Guild of America and the Alliance of Motion Picture and Television Producers is turning into an all-out war. Last week, the WGA made more threatening demands, but the Alliance refused to budge, choosing instead to reply with rhetoric aimed at turning rank-and-file writers against the union's "power-hungry" leaders. With the strike now in its second month, the talks--which involve writer compensation for new media revenues, among other things--don't look any closer to a resolution.

Which is fine, says Patric Verrone, president of the WGA West, because the stalemate is only creating "entrepreneurial possibilities for the talent community to go directly into production and distribution." Who needs big media nowadays? Production costs are low, and the Internet provides ready access to a massive audience, right? "With every day that goes by, our members are exploring Internet TV," Verrone warned the Alliance. "The ability to explore this business without media conglomerates is becoming a real possibility."

Not so fast. Production values might be low and the potential reach of the Web might be vast, but as yet, Web video is nowhere close to providing the kind of steady business model afforded by traditional television. Not only are there countless online video sites to choose from, making the question of distribution a jigsaw puzzle at best and a crapshoot at worst, but there aren't yet online video standards for advertising, either. This, by the way, is exactly what traditional media companies have been trying to explain to the writers in the first place.

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