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Writer Strike Coming To End, So Who Wins?

Monday, 11 Feb 2008 | 4:06 PM ET
CNBC.com

It's about time. The writers guild strike is coming to an end and Hollywood should be back at work by Wednesday. The Writers Guild leadership unanimously approved the tentative deal made with the studios, and now the only step left, is the Writers Guild membership vote on Tuesday at the Writers Guild theater. This following a very busy weekend in Hollywood. (I for one am exhausted, as are many of the writers).

Saturday night, writers on both coasts gathered to hear the details of the deal the WGA and AMPTP had completed just hours before. And based on what I heard from writers exiting the Shrine Auditorium in downtown LA, it was a resounding success. The deal points met with applause and standing ovations.

We got lots of thumbs ups from writers walking out of the theater. And Sunday, WGA West President Patric Verrone called this deal the best the WGA has negotiated in 30 years and the most successful work stoppage in the U.S. in the 21st century.

So why were writers so happy? The writers achieved their big goal of jurisdiction over the new, fast-growing world of digital content and online distribution, and they nailed down a revenue sharing model. The writers say they got a better deal than what the Directors Guild secured in its contract last month. (The writers get a percentage of revenues from online streaming of shows by the third year of their contract, instead of just a flat fee).

And writers say that this strike achieved more tangible gains than the 5 month-plus long 1988 strike. And this strike ended up giving writers nearly twice the percent revenue from streaming that the writers back in 1988 got from DVDs.

The media companies are happy because they got the guild to drop their demands for WGA jurisdiction over reality TV (a seriously profitable business for the studios) and feature animation. And the media companies made what they consider a big win securing a longer 'promotional window', which means the first few weeks they stream a show online after it airs on TV counts as 'marketing,' so they don't have to pay writers until a few weeks (17 days for most) have elapsed.

But this isn't a pure win-win. Thousands of people were unemployed for the three months this has dragged on, and the strike surely cost the LA economy hundreds of millions of dollars. And the the writers this affected the most--TV writers and TV 'showrunners'--will have given up far more in paychecks in the past few weeks than they can possibly gain from this deal in the next few years.

The unknown, of course, is how big digital revenues will be. If streaming digital revenues turn out to be as significant as DVD revenues are now, this strike will have been worth it for the writers. If not, the writers on the higher-paid end of the spectrum will have lost out on a few very profitable months of salary.

How will the TV industry be changed? That's a blog for another day.

Hollywood Writers Reach Deal
What the deal means for the media business, with CNBC's Julia Boorstin and Dennis Kneale.

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.