HOLLYWOOD HONCHOS like to have it both ways: They boast that the creative biz is both uniquely different (and to most minds out here vastly more rewarding) from every other endeavor and at the same time just like every other industry.Thus, they wax lyrical about the mysterious nature of moviemaking, and that the process can’t be messed with in the same way that factory orders can be filled; but they also complain every time Europeans clamor for the so-called “cultural exception,” which essentially would exclude audiovisual content from being treated like cattle or corn in international trade agreements. I point out this seeming contradiction because these contentions are likely to color looming discussions with the various guilds — writers, actors and directors. These latter will be clamoring for a bigger piece of the entertainment pie (especially the leftovers known as residuals) over the next 18 months. Up until now, producers and creatives have been playing an avoidance game, with only minimal contact. But that will soon change. Both sides will, in the initial stages of this triennial set-to, argue fairly extreme cases before presumably getting down to brass tacks and hammering out a deal. The unions will seize upon the latest data on the enormous booty Hollywood is bringing home from around the world. Just last week such a report, from the Intl. Intellectual Property Alliance (IIPA), provided additional ammo for the workers, by suggesting that the so-called “core copyright industries” of film, TV and music collectively raked in $110 billion in 2005 from foreign exports. (That puts the industry in pole position ahead even of American petro-chemicals and pharmaceuticals.) The report also claims that the media sector accounted for almost 13% of GDP in 2005, more than any other single industry. There’s another way to look at the picture though, producers will hasten to point out. Healthy as Hollywood is, it’s being buffeted by forces analogous to those that have upended so many other Stateside industries. Stories about the ailing automobile industry may even be brought to bear. “The Big Three automakers spent last year shedding tens of thousands of workers, overhauling their marketing and shaking up their managements. Now, it’s becoming clear that even more drastic action may be needed to turn them around,” the Wall Street Journal recently opined. The point of that piece is that Detroit still isn’t reflecting the changing tastes of the buying public and not responding well to foreign rivals’ inroads into their market. Could Hollywood at some stage be similarly afflicted? On a much less dramatic scale, Tinseltown media congloms have already had to downsize and revamp. Hundreds of staffers, from the development ranks down to typists, have been let go at the major studios. DreamWorks, once billed as the new United Artists, has been unceremoniously absorbed by Viacom; Tribune Entertainment, once a thriving TV producer-distributor, has essentially gone the way of the Edsel. Producers may argue that the new economics have thrown everything out of whack, and that this is not the time to be giving away the shop. Workers will probably counter that these cutbacks were largely made to boost stock prices, or to otherwise satisfy shareholders. If things get really ugly, producers may point out (from that same IIPA report) that workers in the media biz earn 40% more than the average American stiff, some $70,000 a year. Already the joke among producers is: Yes, a strike in Hollywood would be dire. Workers might even lose their home — their second one. For their part, workers could finger the eye-popping salaries, bonuses and stock options that some corporate titans in the biz award themselves. Why should those execs pocket such sums when workers’ slice of DVD revenue has been kept so paltry? Still, these may be just the preliminary punches. When it comes to the final skirmish, the two sides will have to confront the elephant in the room: What are, and what are projected to be, the revenues from these new media platforms and ventures and how should they fairly be divvied up? Only at that point will it become clear just how tight, or how cushy, a spot the biz is in. Let the games begin.
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