Reality strikes Hollywood!

 Support Socialist Appeal – Subscribe or make a Donation!

Production at the American dream factory has slowed down as workers organised in the Writers Guild of America just completed their third week on strike. 4,000 marched in support of the strike down the famous Hollywood Boulevard.

The employers are some of your favourite names – Disney, Warner Brothers, Paramount, Universal, Fox, Sony, plus the famous but smaller MGM. They are organised in the Alliance of Motion Picture and Television Producers (AMPTP).

The significance of the dispute goes beyond the writers' immediate demands for a bigger share of DVD and new media revenues. (The unions and also sometimes the ‘talent agents' who represent the workers negotiate a small share of what the projects earn from box office or sales etc. as part of their remuneration.)

Entertainment is the second biggest US export industry and Los Angeles is the centre of it. The famous sign looking down from the Hollywood hills is a symbol of an industry which dominates the film and television screens of the world. Not to mention popular music.

Beyond the huge economic importance of this industry there is a massive cultural impact on the minds of millions of people around the world. This is well understood as an important tool of US imperialism in defending and extending its global domination. Satellite TV and now the internet have extended it into even the poorest societies.

But it is also important to spread the news that right at the heart of the richest and most powerful capitalist power in history, in the most glamourised and mythologised activity, workers are organized into strong trade unions. And they fight to defend their interests as workers selling their labour.

sag-solidarity-with-wga.jpgActors and Directors are also well organized. The Screen Actors Guild and Directors Guild of America are strong trade unions who have taken strike action in the past and are lining up behind the WGA.

Moreover, whereas in Britain many unions, especially in the media, lost a lot of influence with the abolition of the closed shop by Thatcher in the mid 1980s, these US unions still operate an effective closed shop. Crafts people and technicians are also well organised (in IATSE) and the Teamsters have a pretty firm grip on everything that moves.

The most immediate effect is on television. Very current programmes like the Jay Leno Show (he has been on the picket line supporting the writers) are hit immediately. Fast turn around series will be next. Movies will take longer, the studios have stockpiled projects and have huge backlogs of scripts. But they won't be able to get any re-writes done and no new scripts will be commissioned.

This may not seem like a big deal, but the production line must be fed with new ideas and new projects or there will be a serious hiccup in the money making. It's a bit like any factory, except every product is unique (or slightly unique!) and its profitability is uncertain, so something new has to be coming along to make up for the last flop.

To give an idea of the scale of the business, it's estimated that the strike is costing the economy over $20m a day. In terms of the claim, Jonathon Handel estimates that if the WGA win their demands for ‘residual' payments on DVD and new media and the other unions receive the same increase in proportion with their usual deals, it would cost the employers $3bn. A large part of that would just come from the roughly four cents per DVD increase the WGA is asking for.

It sounds like a lot of money but as he goes on to point out "Divide by 8, yielding $375 million as a per-company average, to roughly account for the fact that there are six majors, one quasi-major, and many smaller companies in the AMPTP. Then divide by 3, yielding a gap of $125 million per major per year."

Assume, he suggests, that a compromise is done and they split the difference: "That's about a $60 million increase per major per year. $60 million? It's a small fraction of the typical revenue and profits the conglomerates are achieving. The numbers are complex, but the conclusion is simple: the producers can afford to increase the residual payments, and it's time for them to do so."

Considering Disney's earnings rose from $3.4bn to $4.7bn for the 2007 financial year you can see his point. But though talks are planned it looks like being a bitter battle. Ironic really, considering a lot of the motivation for building Los Angeles was so employers could get away from the unions!

Are you a communist?
Then apply to join your party!