Kara Swisher

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Writers’ Strike Over and Still No Web Profits in Sight!

What does it take to imagine a new industry out of orange groves?

A lot more than settling a strike, I would posit.

A lot has been written about the writers’ strike in Hollywood, which is officially over after three acrimonious months with the overwhelming vote by the members of the Writers Guild of America to accept a contract it hammered out with the entertainment studios.

Writers will presumably be back at their keyboards today.


The toll? Hundreds of millions of dollars in lost revenues and no new episodes of “Heroes” (what will evil Sylar do now that his powers have returned?), all over how writers should be paid for content that appears online.

That there is precious little money being made online by anyone does not seem to have mattered, as the struggle metastasized into a symbolic battle over all the wrenching changes that digital technologies have made on the industry and are sure to make even more significantly in the future.

Writers, most of all, understand a dramatic narrative, and this one tells the tale of their work being digitized and downloaded without a lot of reward or control. It is a familiar story to them, of course, as technology after technology has not been kind to them.

In this three-year deal, victory was declared when the writers did get a percentage of the revenue from fees paid to stream their work on the Web.

Sorry to be a downer, but those fees will always and forever be peanuts, even if getting a percentage (rather than a residual) is seen as a win.

That’s because the big bucks in online content must come from advertising, which the writers will not grab a piece of at this point, if ever.

And if you think the creation of original online content is in its nascency, and it is, the robust business models around how to pay for it are even more stillborn.

Of course, there is money here and money there–some from items purchased, some from sponsorships, some from basic CPM economics.

But it is all very tentative and small now and advertisers are still not springing open their wallets with the kind of money they are used to spending on television.

And why should they? It is safe to advertise there, despite dwindling audience, wherein quality online content has so far shown itself to be very uncertain.

While there is an occasional errant hit of the most basic kind (Funny or Die’s “The Landlord” or similar material), there is no systemic or large-scale efforts to establish this industry of original online content in a way that is different from what has come before.

Of course, writers did hightail it up north to Silicon Valley during the strike to try to get some money to create new kinds of online-entertainment production companies.

But it felt like it was out of desperation, rather than a real commitment to change the system they were working in and to pioneer new forms of entertainment based around the Web medium.

The last time writers tried to marry venture capitalists, by the way, was in the last bubble and that was out of pure greed at the sight of the dot-commers all getting rich.

Well, greed did not work then and fear will not now. I would imagine writers will now abandon those efforts now that their old paychecks are back.

That’s too bad, because what’s needed is a whole new class of talent that has very little stake in the old one and who are seeking new ways of creating content, doing business and, most of all, envisioning the future.

Perhaps that is unspecific and not as real as the deal that was hammered out at the Luxe Hotel in the Brentwood section of Los Angeles between union reps and Disney’s Bob Iger and News Corp.’s Peter Chernin.

Now I have stayed at that hotel, in fact, for a conference, held nearby at the Getty Museum on a high hill overlooking Los Angeles. Called the Entertainment Gathering, it touched on the changing nature of the entertainment industry and also on the collision with the digital world it was facing.

Of course, there was a lot of talk about the innovation boom in Silicon Valley and what it meant for the entertainment industry.

At a break, one old entertainment mogul attending wanted to point out to me that Hollywood was like that once. He regaled me with stories of the mostly immigrant entrepreneurs who had left the certainty of the East Coast and had come to California and created a whole new business in the orange groves that once dominated the Los Angeles region.

“Can you imagine that?” he asked me, sweeping his hand over the vista.

Indeed, I could.