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WGA And Studios: Is Strike Getting Nasty Now?

Thursday, 15 Nov 2007 | 11:01 AM ET

A video made by the Writers Guild is circulating the web. As of now, it's been seen 111,000 times on Youtube. It dramatically argues that the studios are cashing in on digital distribution and the writers aren't getting a penny. It starts with Disney CEO Bob Iger saying that Disney has about $1.5 billion in digital revenues. (I should point out--that it's a CNBC interview Iger, and it includes an interview I did with NBC TV chief Ben Silverman. Hey, isn't that copyright infringement?).

The writers are arguing that these companies are making boatloads of cash--showing Sumner Redstone saying that Viacom will double its revenues this year from digital--and that there's no reason writers shouldn't have a piece of that. Take a look at the leaflet that writers are passing out bashing Disney:

So, is it true? Well, not exactly. That $1.5 billion Bob Iger mentioned actually includes a lot of revenues that have nothing to do with writers--people booking trips to Disney resorts, etc. Iger should have said that $1.5 billion of their revenues are generated over the internet.

And this is the statement Disney issued in response:

"The WGA leadership is deliberately distorting the facts. As the WGA knows full well, more than half of Disney's digital revenues are from sales of travel packages and the vast majority of the rest is from online advertising on sites like Disney.com and ESPN.com and through online merchandise sales. The WGA also knows its members have been paid residuals on entertainment content downloaded via iTunes. Deliberately misleading the public is not the best way to resolve this issue and get Hollywood back to work."

So is the writers' premise true? Well, they do get a piece of digital sales like iTunes downloads. And Steve Jobs is keeping such a huge chunk of those revenues that perhaps they should be protesting.

The studios complain to me that they're getting killed on that download revenue and that's one reason many studios won't deal with Apple . But I digress, the issue is whether the writers are getting adequately compensated for those ads next to streaming shows. This debate, however off base, is far more dramatic!

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.