All Things Digital

Why does the idea of a marriage between Hollywood writers and VCs make me slightly queasy?

But that’s just the feeling I got when I read the always sharp Joseph Menn of the Los Angeles Times, who penned an interesting piece earlier this week about writers in Hollywood turning to venture capitalists as the strike drags on.

Wrote Menn: “At least seven groups, composed of members of the striking Writers Guild of America, are planning to form Internet-based businesses that, if successful, could create an alternative economic model to the one at the heart of the walkout, now in its seventh week.”

That includes meetings with Silicon Valley VCs like Jim Breyer of Accel Partners, whose investment in Facebook gives it insight into the creation of new audiences.

The hope for the–let’s just say it, shall we–unnatural pairing of tech VCs and Hollywood folks?

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With the entertainment industry reeling from weakness brought on by changing viewers’ watching habits due to the Internet, the news of the talks to end the writers’ strike collapsing on Friday can’t be a good thing for Hollywood.

With the strike now in its sixth week, the studio reps–the Alliance of Motion Picture and Television Producers–and the Writers Guild of America took aim at each other at a Los Angeles hotel, accusing the other side of negotiating in bad faith and being uncooperative.

The two sides still appear far apart on a lot of issues, including unionization of reality shows, but a lot of the issues center on how to split up revenues from new media.

Of course, most of those revenues from the Internet–via downloading and streaming, for example–are still tiny, so the two sides are essentially arguing over nothing, except that that nothing might be something someday.

Got it? (Kind of like Facebook being worth $15 billion!)

In honor of News Corp. officially getting ownership of Dow Jones this week, here’s a recent take from Headzup on the strike from the perspective of AllThingD.com’s new boss (Welcome, Rupe!):

I have seen the future of online entertainment and–no surprise–it’s not being created by Hollywood.

That’s because people there are too busy fighting over nothing these days.

Still, Hollywood’s writers and studios come back to the bargaining table again today, resuming their discussions to settle the strike that has been going on for three weeks now.

The Writers Guild of America is adamant about getting its writers a fair share for work that gets distributed over the Web.

And studios are just as stubbornly resisting, saying shares are not forthcoming anyway right now, given how paltry the revenues from Internet content are at this point in time.

While the wrangling has gotten lots of attention–no late night shows, the horror!–what’s really more appalling is exactly how slow all of Hollywood has been actually trying to change that equation.

Good thing, then, for producers like Pete Gibbons, the series producer of “KateModern,” an interactive online-only series being made in London and now appearing regularly on the Bebo social network. Each episode–not including all the other side videos and posts that hang all around each one–garners around 300,000 page views.

So far, of course, it is a fledgling effort, but a step in the right direction, even as Hollywood fiddles and its business burns.

Here’s an interview I did with Gibbons when I was in London:

(I am still having problems with my Brightcove player, so I uploaded it to YouTube.)

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Since they’re fighting with the studios over being paid for content that is moving to the Internet, why shouldn’t the Writers Guild of America put up some choice user-generated content on the Web?

United Hollywood is a nifty Web site chronicling the strike in a blog and video, and it also has a page on YouTube.

After all, why shouldn’t people whose work is often ripped off on the site use it for their own benefit too?

Here’s a video of the writers of “The Office,” who are as goofy as you might expect, but who make cogent arguments about why they should share in the Internet wealth:

And how much do we love the chant, “How greedy can you get, they won’t even share the Net,” with “Grey’s Anatomy” cast member Sandra Oh carrying a picket sign? As much as we like donuts, that’s how much!

What, oh what, can we say about the latest inane quote from yet another Hollywood mogul about Apple’s Steve Jobs and his hugely popular iTunes and iPod products.

The latest piece of hoo-ha comes from former Disney CEO Michael Eisner (pictured below), pointing a finger at Apple as the real villain in the ongoing strike between the Writers Guild of America and Hollywood entertainment behemoths

At fault? Steve Jobs, of course!

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So when, if ever, will there be a truly bona fide Internet hit?

And please, pretty please, it just can’t be “lonelygirl15″ (pictured below) and some clever music videos.

The lack of lasting and profitable professional content online is once again in sharp relief with the writers’ strike now taking place in Hollywood.

In a Wall Street Journal piece yesterday on the struggle between the Writers Guild of America and entertainment studios, Ken Hertz, a Los Angeles lawyer who has worked on digital music issues, made an interesting observation:

If anything, the strike could create an opportunity for the online world to step up and prove its value to the guild. A strike could in a strange way damage the studios by creating online competitors who come forward to offer the union writers a new model that no one would have otherwise had the time or effort to conceive of.”

If only.

Because, while the main point of contention between the two sides is how to split future revenues from digital distribution, I am not sure exactly when it will become more than the middling revenue (and not much income) online content generates today, which is more like splitting up a tip jar at Starbucks than raking in big bags of dough from some Hollywood blockbuster.

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The talks between Hollywood studios and the Writers Guild of America ground to a halt as of last night and a strike could happen anytime, since the contract between them expired at midnight.

The big problem? Digital issues, which are sure to be an increasingly vexing issue for the entertainment industry, as more and more content moves or is even born online.

At issue are low-ball DVD residuals that writers also fear will be replicated in the digital arena, such as Internet downloads. They also want a piece of the online video ad market, which is still in its formative stages.

In a statement, the Writers Guild noted: “Every issue that matters to writers, including Internet reuse, original writing for new media, DVDs and jurisdiction, has been ignored.”

Studios, repped by the Alliance of Motion Picture and Television Producers, argue that the nascent digital entertainment industry, which so far is paltry in comparison to other distribution methods, needs time to breath before being pummeled by higher costs.

What NBC Universal CEO Jeff Zucker said the other day, referring in this case to its not-so-lucrative deal with Apple’s iTunes (only $15 million in video revenue in a year), is perhaps apt: “We don’t want to replace the dollars we were making in the analog world with pennies on the digital side.”

Except that might actually be the case for a while until Hollywood figures out a low-cost, high-standard way of producing for the digital medium. Instead, the industry is beset by piracy (which, sad to say, works well) and ever-higher production costs it seems unable to control.

In the new paradigm, one might assume that the creators of content–i.e., the writers–would have more power, as the proliferation of distribution platforms of all kinds continues.

No longer under the stranglehold of clueless and most definitely overpaid studio hacks, oops, executives, one might imagine a future where the creator and the distributor are one and the same.

Well, not yet, as creators still remain largely overpaid minions to the Hollywood machine, held in place by a system that seems sure to fall apart just as soon as a Google of the entertainment industry is created.

That is, a method for paying these creators and also for the production of content that rivals the current and obviously broken way it is now done.

Many years ago, writer Herman Mankiewicz wrote to Ben Hecht about Hollywood: “Millions are to be grabbed out here and your only competition is idiots. Don’t let this get around.”

That moment can’t come too soon for digital Hollywood.