Wednesday, December 31, 2008

Give Time Warner Cable a Medal

Time Warner Cable's refusal to even consider Viacom's proposed 25%± increase in carriage fees is an action deserving of commendation and a medal. If Viacom wants to demonstrate how much these channels are worth, unpackage them, set a price for each, have TWC add on it’s costs and a modest profit, and agree to an optional carry contract based upon some drop number like less than 10% of cable customers in a service area. Give the same contract to all carriers, cable and satellite. We’ll see if anything but Nick, MTV, and Comedy Central can survive. (And maybe not all of those.)

Most certainly the time has come to let me subscribe to Comedy Central and dump the rest of those. If I really want to watch "Spongebob", I’ll go to the Nick web site where I can also play games. In fact, if I could get Dish Network to dump Viacom right now, I'd watch Comedy Central shows on the web.

Viacom, of course, is one of those greedy media conglomerates that's telling SAG this isn't the time for seeking more money.

Tuesday, December 16, 2008

The SAG saga: the ending has been written on the wall

The reports of the Monday night SAG discussion indicates the kiss of death for the militant's strike vote proposal. This article from The Hollywood Reporter gives a very good feel for the depth of conflict within SAG. Here's a short bit from the long article:

"The contentious and at times bitter meeting capped a roller-coaster four days for SAG, in which opposition to the guild leadership's call for strike authorization has crystallized."

Perhaps what's most disturbing is that many of the well-known millionaire "actors" leading the opposition have resum├ęs filled with "producer" credits. None of these people are facing their elder years supported by income from being a Walmart greeter.

The question is: How can a new bargaining committee get more than $46 a year for new media "rerun" views as opposed to what they get from network and syndicated reruns and from DVD sales? And if they don't get more, can "day performers" survive?

Right now we see younger familiar faces with no name recognition doing bit parts within the "CSI" and "Law & Order" families of shows. Reruns on the various cable channels give them some income to keep them going.

If in the future, rerun views shift to the internet derived from source sites such the GE and News Corp. owned Hulu, that $46-per-year typical residual won't be much of a long-term income plan even when combined with waiting tables. If nothing else, those rerun residuals created a "ownership society" cushion during the wrenching mid-life career change away from acting.

It's difficult to understand why GE and News Corp. don't understand the risks of reducing the incentive for younger actors. Do they have in mind a return to a "contract-class" of studio-owned actors like in the mid-1930's through the early 1950's? Or do they have no idea what they're doing just like the major financial institutions? GE in particular focuses entirely on next quarter's profit increases and dumps any subsidiary that fails to meet the goals. The problem is the subsidiaries aren't allowed much room to invest profits into planning for the long term.

Now probably isn't the time for an actors strike, because GE and News Corp. would be happy to let them be on strike during the time ad revenue plunges in 2009. Reduced production costs would mean better quarterly net revenues.

Had SAG and WGA coordinated an approach to shutting down production in a single strike beginning on April 1, 2008, they might have achieved their objectives within 60 days. Now the economy is in the tank, a shocked WGA is in a legal wrangle with the conglomerates over the post-2007 new media residuals clause in their contract, and SAG is tied up in a bitter internecine power struggle.

Welcome to WalMart folks.

Thursday, December 11, 2008

A Note to Jeff Zucker about the Leno thing

Jeff, I know you’re President and CEO of NBC Universal. So I expect it to be difficult to see the same big picture you see in your head for the NBC broadcast network. While I do understand your efforts to diversify NBCU, I can’t seem to get your view of the prime time TV schedule.

Here’s what I see for the upcoming Winter Season 8-10 pm Monday prime time. Fox with “House” plus “24" and CBS with it’s comedy lineup will own a significant chunk of the audience for scripted programming. ABC will grab off the reality audience chunk with 90 minute “The Bachelor” followed by the popular “Samantha Who”. The younger crowd (along with many of us younger at heart) will be watching either The CW’s “Gossip Girl” and “One Tree Hill” or ABC Family’s “Secret Life of the American Teenager” and “Kyle XY”. And the crime procedural fans will reject that 10 hours of programming to watch TNT’s “The Closer”, slated to return in January in the 9-10 pm slot.

You see, Jeff, to me, it makes no sense that you would allow the new Leno talk variety show to block NBC from putting any scripted shows in from 10-11 pm. After all, compared to the competition outlined above from 8-10 pm, why would you not want to try a scripted show against CBS “CSI: Miami”, ABC “True Beauty” and TNT “Trust Me.” Why would you keep NBC’s scripted shows where they can’t possibly get any ratings - the 8-10 pm slots.

How about Tuesday 8-10 pm, Jeff? Fox, of course, has that little cult show called “American Idol” which will be followed by “Fringe”. CBS has those time slot almost thrown away with sweeps winners “NCIS” and “The Mentalist” And ABC is practically giving up with their new “Homeland Security USA” docucopsoap and that worthless show you cancelled, “Scrubs”. And The CW is always a pushover with such fluff as “90210" and “Privileged” (the latter to be replaced by “Reaper” in March).

I guess it make sense to you that the new Leno talk variety show would block NBC from putting any scripted shows in from 10-11 pm. What? Someone told you that no one would want to try a scripted show against CBS “Without a Trace” and ABC’s struggling/cancelled “Eli Stone”. After all, you would also be facing TNT’s “Leverage” and FX “Nip/Tuck” which apparently might pull in 8 million viewers? Otherwise, why would you schedule Leno there instead of a good scripted show.

The rest of the week 8-10 pm is, of course, similarly structured with your competition scheduling what you must think are their weak shows. Yep, you wouldn’t want to schedule something other than Leno against those Thursday 10 pm heavyweights like “Private Practice” and “Eleventh Hour”, when you can put your scripted shows against “Grey’s Anatomy” and “CSI”. And you can put one of your scripted shows not only against them Thursday, but also against “Burn Notice” which is on some cable network - USA, ever heard of it? NBCU owns it. Why would you have Leno on at 10 pm so you have no choice but to screw two of your properties, NBC and USA.

I know, I know. Advertisers are already cheering you, so you’ll be a hero at GE for a couple of more quarters. The ad buyers think Leno is more DVR proof. They, of course, don’t know that in our home we DVR both Leno and Letterman every night, to be watched the following day skipping all those (and I mean “all” those) commercials and the many segments of show we don’t want to watch. The ad buyers must think we’re not representative of the future of television. Unlike us, they think other people are getting DVR’s just so they can watch Leno’s commercials live and the repeat them a few times. Have you sold the 9 pm Sunday slot to these same morons?

In December 2007 I wrote here: “Yes, that ad supported NBC channel you watch now may degenerate into only news, sports, and televaudeville.” But Jeff, I really didn’t think you would actually try to do that.

Then again, you probably realize it doesn’t matter. You probably know the schedule for January already contains 60 hours a week of scripted programming in prime time without NBC. And half of it is good, without NBC.

I could get along without NBC. But I have a fondness for the network that dates back to the 1950's when my uncle was a producer for NBC programming. And I have a focus on scripted programming. So don’t let the GE corporate view completely destroy NBC as a source of scripted programming.

Wednesday, December 3, 2008

Is Alan Rosenberg America’s Last Norma Rae?

Hollywood produces drama. But the geographic Hollywood may become the stage for a showdown representing the end to an old dynamic that balanced the interests of workers against the power of huge corporations.

From an historical standpoint, it's going to be a riveting drama. But from the standpoint of a long-time (56 years) American TV viewer who loves scripted TV, it's depressing. It is the logical real world outcome of shifts in organizational theory, the collapse of the international labor movement, and the simultaneous rise of the international corporate economy in the last half of the 20th Century. Within that larger framework, a scenario has evolved with its tensions and real characters.

The protagonist is Screen Actors Guild (SAG) President Alan Rosenberg. He's had years of significant roles in TV and movies. He's been a political militant all his life. During the 'radical' 60s, Rosenberg became a member of the Black Panthers and was an active protestor of the Vietnam War. He's from a show business family and is married to actress Marg Helgenberger.

Rosenberg may be an anachronism within the current American labor climate in that he strongly believes labor should get a larger piece of the pie than it has over the last three decades and it is worth a major sacrifice to get it.

Flashback - Rosenberg describes to the crowd the crux of the drama’s conflict from his perspective: “Fair play doesn't pertain in bargaining. What matters there is leverage. Here (pointing to the crowd) is the leverage. Our leverage is that we're the product. We took a bad deal for cable 25 years ago. We took a horrible deal for VHS 20 years ago. We won't be fooled again.”

While most of SAG’s 120,000 members are probably sympathetic to the idea they've been screwed for 30 years, most also are typical of Americans - up to their ears in debt and not willing to sacrifice their cars and homes for principles. My guess is that Rosenberg and Helgenberger were not one of those couples whose lifestyle is in serious financial jeopardy because of last year’s writers strike. The dramatic dilemma for Rosenberg is that he has no real leverage unless he can get a “strike vote” from 75% of the SAG membership.

Our drama has two principal antagonists. The first is Jeff Zucker. In 2005 Zucker was promoted to Chief Executive Officer of NBC Universal Television Group behind Bob Wright, vice chairman of General Electric and chairman & CEO of NBC Universal. On February 6, 2007, to the position of president & CEO of NBC Universal (NBCU), replacing Wright.

Zucker is the perfect historical antagonist to Rosenberg. He is the son of a cardiologist, was captain of his high school tennis team, a Harvard graduate who majored in history and was President of the Harvard Crimson, who was hired by NBC in 1988 to research material for its coverage of the 1988 Seoul Olympics. From there he became the Executive Producer of the Today Show at age 26 and has continued to rise in the NBCU organization.

In contrast to the relatively small SAG organization, NBCU is a subsidiary of General Electric Company (GE), the world’s third largest multinational conglomerate considered by many to be the most successful conglomerate. Despite the recent economic collapse, on October 10, 2008 Zucker’s boss, GE Chairman and CEO Jeff Immelt, reported that third quarter revenues from continuing operations were $47.2 billion, up 11%. “Our infrastructure and media businesses continued to see signs of strength,” Immelt explained. “NBC Universal grew segment profit 10%, its eighth straight quarter of growth.”

GE’s financial subsidiary, GE Capital, did report problems related to the general economy. But there is no real need for the American taxpayer to worry about this subsidiary of the world’s third largest conglomerate. On November 12, 2008, the Federal Deposit Insurance Corporation approved GE Capital as an eligible entity under the FDIC's Temporary Liquidity Guarantee Program, under which the FDIC guarantees GE Capital's senior unsecured debt.

Yes, Zucker, as the outwardly congenial “company man” fronting for an impersonal international conglomerate, is the perfect antagonist to Rosenberg. Early this year, Zucker addressed the perennial question about whether General Electric was thinking about selling NBC. "As things have improved with NBC Universal and NBC prime time, those questions have subsided. It's all about performance. If we perform, the question goes away. If we don't perform, they should sell us."

But there is a second antagonist. Rupert Murdoch is described as an Australian-American global media mogul. He is the major shareholder, chairman and managing director of News Corporation (News Corp) which owns all the various Fox media brands. Murdoch's father was a powerful Australian newspaper proprietor and his mother the daughter of a wealthy Irish family. After attending Oxford, Murdoch became managing director of News Limited in 1953. From those not very humble beginnings, Murdoch built News Corp, a holding company which is the world's largest media conglomerate. According to the 2008 Forbes 400, Murdoch is the 109th-richest person in the world, with a net worth of $8.3 billion.

If one might doubt that Rosenberg family struggled much financially during the writers strike, one might be tempted to think Murdoch didn’t know the strike was going on. One would be wrong because, unlike Zucker, for Murdoch everything that affects his business empire is very personal. And very much like Rosenberg, Murdoch understands that everything he does is political.

The nature of the battle between the media congloms versus organized labor during the past 18 months is clear. Much like the financial institutions that recently collapsed, the congloms don’t care about the public, the workers, or the shareholders. The attitudes of management reflect an ego oriented self-assured manipulative aggression. And they are good at it as they control significant elements of the flow of information around the world.

The Alliance of Motion Picture & Television Producers (AMPTP) representing Zucker and Murdoch clearly had a plan to crush the creative guilds built around all the flaws the membership of the guilds themselves created.

Unlike the AMPTP which is made up of the dominating conglomerates plus others, the guilds are made up of squabbling creative egos. The struggles within the WGA and SAG make them look like the Italian Parliament, unable to suppress “healthy” dissent long enough to create a healthy being. To get the two guilds to work in unison against AMPTP would be, at best, a daydream for a serious labor organizer.

So, AMPTP was given many gifts by the workers. To begin with, the labor contracts didn’t all expire at the same time. So the WGA contract expired October 31, 2007. Talks began on July 13, 2007 with AMPTP making the following ultimatum as reported by Variety :

"As for the proposals, the AMPTP beat the guild by several hours in disclosing its official demands. The companies told WGA members they have two choices:

"1. Maintain the status quo via a three-year contract that provides for a study centered on revamping compensation in order to figure out how to pay writers from revenues from the plethora of new-media platforms. Agreeing to the study would keep the current residuals system in place with increases in salary minimums to be negotiated.

"2. If there's no study on revamping compensation, the companies will play hardball and demand a four-year deal that will institute a recoupment-based residuals system -- meaning that writers receive residuals only after companies have made back their basic costs of development, production and marketing."

In other words, the proposal from the congloms was “you agree to give us the content you create over the next three years and we will study how to compensate you for our use of it.” And at no point in time prior to the beginning of the strike November 3, 2007 did the congloms improve that offer.

As I wrote in December, it was obvious that AMPTP was bargaining in bad faith in order to force the WGA to strike which created a de facto lockout of other workers including SAG members.

Among those locked out were directors who, though directors are clearly middle management, belong to a guild of their own - the Directors Guild of America (DGA). The AMPTP intended to use locking out its middle management personnel in the DGA to manipulate the course of events. Naturally, the AMPTP was very successful. By the middle of December, the DGA announced it was going to negotiate with AMPTP on its contract which wasn’t due to expire until June 2008.

And indeed, after “highly productive” informal talks, the DGA and AMPTP met January 12, 2008, and wrapped up a deal six days later. It didn’t take much for middle-management and management to agree on a deal.

This ramped up the pressure on the WGA. And there already was pressure. WGA members were complaining. Craft and Teamsters union members were hostile. The public was hostile. Even within SAG which was facing its own contract expiration in June, actors were divided. So much for a united front from labor. The congloms had won.

Or had they?

Sure, a WGA contract “modeled” on the DGA contract came soon after January. But Alan Rosenberg refused to accept this model, despite it being embraced by SAG’s competitor AFTRA. He just waited right up through, and well beyond, the expiration of the existing contract in June, explaining it was a bad contract for creative workers.

Even after his own membership elected new Board members to get things moving, he held his ground. And the new Board members, not wishing to be seen as totally incompetent, gave him more time by asking for federal mediation.

Just one day before the first mediated meeting between AMPTP and SAG, WGA members finally figured out they were screwed in the new contract. From Variety:

"In a move echoing the bitter disputes surrounding the 100-day WGA strike, the Writers Guild of America West has accused the conglomerates of failing to comply with the guild's 8-month-old contract.

"The move elicited a sharp denial by the Alliance of Motion Picture & Television Producers, which asserted that the WGA has misinterpreted the terms of the deal that ended the strike by wrongly asserting that it covers projects prior to start of the agreement.

"The WGA announced Wednesday that it has filed for arbitration over alleged nonpayment of new-media residuals for programs sold as electronic downloads, also known as electronic sell-through (EST). WGA West board member John Bowman, who headed the guild's negotiating committee, said the contract with the companies on electronic sell-through covers feature films produced after July 1, 1971, and TV programs produced after 1977.

"'The companies have reneged on this agreement and are taking the position that only programs produced after Feb. 13, 2008, are covered by the new provision,' he added. 'This may be their deal with the DGA, but that was never our agreement. Every proposal we made during negotiations made clear our position that library product was covered, and the AMPTP never objected to that position. The guild will not allow this to stand.'

"The AMPTP shot back that the WGA is mistaken about how the new-media residuals apply."

And so the mediated talks between an unbending AMPTP and SAG failed when Rosenberg presented this news of bad faith bargaining by AMPTP. And Rosenberg can now ask SAG members to consider authorizing a strike.

Zucker, Murdoch, and their fellow conglomerate CEO’s are willing to bet Rosenberg can’t persuade 75% of the SAG voting membership to approve a strike. If they are right, they will have effectively broken organized labor in the media industry. If they are wrong, the next question will be: "Will the congloms risk a strike?"

Maybe Rosenberg can pull off a “Norma Rae” win saving what little bit of influence labor has in this country. It will be a true “Hollywood drama” with consequences for the rest of us. Sure, the potential consequences include disrupting our TV. But the consequences potentially include American labor giving up on more than a century of workers seeking a fair and equitable share of the American dream.

I rooted for a fictional "Norma Rae" and now I'm rooting in real life for Alan Rosenberg. And I'll donate to a strike fund for all the affected media workers if it comes to that.