Editor's note: At time of publication, the WGA was still out on strike. The 2007 WGA continues to evolve as a story. iMedia will continue to report the story and the implications it has for the interactive industry.
What's happening?
Depending on who you ask, the internet is either an experiment or a massive cash cow. That's how big the gap is between striking Hollywood writers and the media companies that have refused to extend residual payments for digital exploitations of content.
When the WGA contract expired on Oct. 31, producers and writers bickered for four days without a solution. On Nov. 5, the writers went on strike. Almost immediately late night shows went dark. Sitcoms, which don't keep a backlog of scripts, went a few days later. If the strike lasts another week, dramas also will go dark. And almost since the beginning, many Hollywood-watchers have been asking if this year's strike might do for the internet what the 1988 strike did for cable?
And in the digital corner...
Few labor disputes come drenched in irony. While Hollywood moguls play hardball with rebellious scribes over the rate of compensation for distribution of content online, the prize itself -- a burgeoning web video business -- may be the fight's big winner.
At least, that's the impression ScanScout CEO Doug McFarland has. But McFarland, like many working in digital media, doesn't see the strike so much as an opportunity for the internet, a medium he believes to have its own independent vitality. Rather, McFarland sees the strike as a sign that traditional media might be in serious trouble.
As a technology company that delivers brand protection tools for digital advertising agencies keen to play in the web's often murky user-generated video pools, ScanScout has a bird's eye view of the problem.
"Right now, both the writers and the producers are looking at an unsustainable business model," McFarland says. "These are two institutions arguing about an old way of doing business at a time when they need to be figuring out what to do going forward."
So while writers and producers squabble over the digital pie, those on the other side of the fence -- the seasoned veterans of the web who survived obscurity, a failed subscription-based business model and a massive bubble -- now feel vindication more than opportunism.
Rather than an immediate opening (web companies insist that they are developing and exploiting new opportunities daily) the writers' strike has been something of an I-told-you-so moment for internet veterans. In other words, nobody in the online video business has been waiting for Hollywood to make a mistake. Instead, online video companies have been working feverishly to meet a growing demand for content while working to solve the billion dollar question: what will the business model look like?
In a recent blog post, Marc Andreessen, the visionary behind the Netscape browser and the Ning build-your-own social network, wrote that Hollywood is in the middle of being recast into Silicon Valley's image.
"The internet has already been forcing a rethink of the structure of the media industry, particularly for entertainment," Andreessen wrote. "The strike is kicking that rethink into high gear."
For Andreessen, the new media paradigm means rock-bottom costs, which have led to a cluttered marketplace of small firms where the creative talent also happens to own the shop. While that means traditional media companies may be at the end of their run, those on the other side of the digital divide aren't so much taking credit as simply plowing ahead.
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