Why did the Hollywood writers go on strike?

Strike

The Writers Guild of America strike was initiated so that the union representing an estimated 12,000 writers could force the hand of the Alliance of Motion Picture and Television Producers. Every 3 years negotiations begin between the two parties to come up with a working contract. In late 2007 it became clear that the two sides were very far apart and neither side was willing to give in. On November 5th, 2007 a strike was declared by the Actors Guild.

Issues

Residual income for DVD sales was a major sticking point in the negotiations. It was decided back in 1988 that writers would get .3% - .36% of all revenue generated from home video sales. When this decision was made, VHS tapes were just beginning to gain traction and only comprised a small percentage of profits generated by Hollywood. As the years have gone by and VHS tapes have been replaced by DVDs, revenue generated from DVDs has increased dramatically. Last year Hollywood made almost 3 times as much money from DVD sales as it did at the box office. The actors guild asked that their share of this revenue be doubled; they claim their share would increase from approximately 4 cents per DVD sold to 8 cents each. Related to this same issue was the increase in income generated by the studios for "New Media." New Media includes internet downloads and on-demand programming. Currently no agreement exists for this form of distribution. The Screen Actors Guild insisted that a deal be reached including an agreement related to this new form of digital distribution. The production companies argued that "New Media" is not a proven industry, similar to their argument in 1988 related to home video sales. This caused much resentment between the two sides and was proven to be a major stumbling block towards a resolution.

Another major issue was the inclusion of reality television and animation writers into the union. The guild requested to see new language added to the contract to include this group of writers to their guild. The Hollywood studios rejected this proposal, saying it would only strengthen the Screen Actors Guild and make future negotiations even more difficult.

As the strike continued its impact became more and more apparent. It is estimated the strike cost the entertainment and related industries some two billion dollars.

The two sides came to an agreement and the strike ended on February 12, 2008, 14 weeks after it began. The new deal establishes a scale of royalty payments for writers whose work is sold over the Internet or streamed for free; major studios agreed to pay the writers 2 percent of revenues starting in two years.

First answer by Ksmail. Last edit by Kamuna. Contributor trust: 818 [recommend contributor]. Question popularity: 22 [recommend question]