Hollywood 2.0: Why the TV Industry Might lose 28% of its Audience Forever

It’s no big secret that the 2007 Writers Guild of America strike is bound to change the future of television, as we know it. Will it boost internet TV? Will our favorite TV shows like Grey’s Anatomy, Lost, 24 ever come back? Will the strike ever end? Will there be any way of turning back for the Hollywood studios?

All these questions were a huge factor taken in to consideration by the Alliance of Motion Picture and Television Producers (AMPTP) and the Writers Guild of America before entering this historic strike that will shape the new industry forever. Hollywood 2.0.

A top industry consultant divulged an interesting theory to me. The WGA’s last big strike took place in 1988. It revolved around residuals for hour-long shows along with reduced pay for reruns. Due to the five month strike, the big studios had to push the fall season to the winter. Leading soap operas had to employ low budget writers who had reduced the shows’ quality. It is said that 10% of the TV viewers stopped watching television forever! This fact cannot be supported with 100% empirical data, but I glanced at some Nielson graphs over the web and they go a long way in proving this theory. It is also rumored that this strike gave birth to reality television. Fox Networks started the successful ‘Cops’, thus making way for many unscripted television shows that would dominate the airways in the future. The estimated loss of revenues that the AMPTP suffered was over 500 million dollars.

TV viewing changed forever, and that was before a new factor came to being – The Internet.

The 2007 strike – what’s it all about?
Every three years the WGA, representing over 12,000 writers for film, radio and television in the US, negotiate their contract with the AMPTP - the big studios paying the bills. Among many disagreements were the issues of DVD residuals, union jurisdiction over animation and reality program writers (they’re saying it’s a reality show, there are no writers…) . But the biggest is issue is compensation for "new media"-- content written for (and/or distributed through) emerging digital technologies (you, know, the internet). On November 5th, following a failed round of negotiations the WGA began to strike.
As in music, writers rely on royalties/residuals from DVD’s sold, reruns played and airing of their work on other media formats like the internet or mobile while they are sitting at home waiting their next gig. The WGA wants to bump residuals from DVD sales from 4 cents per DVD sold to 8 cents. More importantly, as it stands, the writers don’t get a nickel when TV shows and movies they’ve written are streamed via IPTV, internet downloads, smart phones, or any other online streaming solution.
Meanwhile, our favorite TV programs are dropping like flies. Check out this great list on Wikipedia to see what aired and what’s still to come.

Internet Television
Whichever way this strike plays out in the near future the real winner is the internet. There are hundreds of well funded online TV platforms like Joost , Babelgum, RayV, Knocka TV and many more ready to make their big move. Millions of viewers are emigrating to these newly launched platforms. Millions of viewers prefer watching 3 minute videos on YouTube and Metacafe over the traditional TV shows. The longer the strike continues, the more accustomed these viewers are to getting their fix online.

And so, a projected 28% of the traditional TV audience will stay online and leave television behind. Did the writers see this coming? Why start a war on online residuals when most people are still glued to their TV sets? It’s the future, and the writers know it. More so, the writers are actually negotiating with venture capitalists in an effort to bypass the Hollywood studio system and reach consumers with video entertainment on the Web.

The future of music 2.0
So what has this got to do with music licensing and YouLicense? Apparently a lot.
Music licensors have also been affected by this strike and are suffering considerable business loss. If there are no shows on TV, there are no 30K$ TV placements. But it’s the current strengthening of online television that will bring many new opportunities for musicians and personnel working in the music licensing arena. As Gerd Leonard, Music guru, so eloquently put in a previous post:
“10s of 1000s of new TV, online video, and gaming channels will be born in the next 2-3 years – and all of them will need music to go with the visuals. Millions of songs will be synched to video – this market will positively explode.”

I couldn’t agree more.


Itay said...

Great article!

c said...

i agree theres more choice and variety online.

William said...

I'm wondering if the writers' strike might not just revive "dramatic radio."

I'm listening to WAY more radio and Podcast shows these days...

Ben said...

What was your source for that 28% number?

Man said...

Thank God, those 28% have been ruining TV by posting spoilers online, having more reality shows and general not having patience for a show to develop.

If after the strike is over all we're left with is true TV fans then it was worth it.

Eugenia said...

I am a videographer. In essence, I am a video content provider on the net. But I don't need to license music, I use CC-BY licensed music which is free. I have over 100 albums to choose from, and over 500 albums to choose from if I include CC-SA and ArtLibre-licensed music in the mix.

Eugenia said...

By not "licensing", I mean paying royalties. The licensing terms are all respected.

Alan Barker said...

With the way the internets going and technology is making everything all in one super devices, that's the way it's going to be. It'll have to happen, TV will become an on demand, download when you want sort of thing, it's just a matter of when....

Peter Jones said...

Well, yes, t.v. will eventully die. and pretty soon too.i think., great article, I put it up with some funny comments here, http://www.opentopix.com/topic/other/the-tv-industry-will-loose-28-of-its-audience-for-ever

Peter Jones said...

The previous link was too long so I change it here, the link is on the first page now anyway. www.opentopix.com

Peter Jones said...

The previous link was too long so I change it here, the link is on the first page now anyway. www.opentopix.com

tom reeves said...

Thanks. I wrote some commentary (pwnership.com) on the strike this morning linking to this blog post and using a quote or two. I hope the optimism you have for licensing music proves true!

This so reminds me of the baseball strike. But without the organizing force of the commissioner's office and a strong labor union to try to rebuild a devastated fan base.

tom reeves said...

@william - more podcasts, more music, and also for me, more writing.

@28% - source?!? SWAG. And maybe someone with credibility swagged, but swag nonetheless.

@eugenia - a poignant moment perhaps is best constructed with recognized music.

@alan - different distribution channels for different folks. Your choice my become the most popular, but it will be a long time before it become even 50%.

@peter - thanks for the funny comments!

Bob said...

I've been listening to podcasts all christmas and stacking up the torrents.

So sick of adverts all day/waiting for something to start so I have to be awake at mainstream hours. I like to skip around to the good bits pause and comeback later.

I also like to save up my favourite series and watch 3 or 4 in a row when I'm in the mood, then go a month or too without.

Bah, broadcast = 20th century.

Mind you the new BBC iPlayer is nice now that it works with Linux, I can stream any show form the past 7 days in my browser... great for catching up at 4am

Neo-Negro-Tocqueville said...

Great article. I agree with you. I have taken the first step. I have compiled a list of possiblities for new programming for the 2008 and beyond. Now My guess is the TV establishment won't touch them, but as your article points out, who needs them. Here is an article of suggestions for what I think would make for great "Internet TV":


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