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Published on November 2nd, 2007 | by Tom

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TV Writers Strike Caused by Jump Point Economics

The looming strike by the Writer’s Guild of America illustrates some important points about the coming Jump Point economy.  As we approach a world where every consumer is connected to every other consumer, content–including repurposed and repackaged TV shows–will be increasingly digitized and available for download online and on mobile phones.  According to the Wall Street Journal, for the union "one of the most contentious points is how much writers should be paid when their work is distributed digitally for viewing on computers, mobile phones and iPods. There’s a big problem resolving the issue, though: No one in Hollywood has any idea how lucrative the digital marketplace will become."

Sure, TV and movie downloads are a relatively small part of the business today–only 50 million shows were downloaded on iTune this year, compared to one billion songs–yet it is clear that infrastructure and attitudes are changing.  Video-caliber iPods haven’t yet hit the tipping point, and pricing models don’t yet track with reality.  But, clearly, video downloads will be a huge part of the entertainment future. 

More, because the granularity of consumer information is so much finer with digital distribution, we could see better, more targeted advertising fetching even bigger revenues for content producers and distributors.  The Guild is smart for recognizing this and not letting the issue be swept under the carpet. 

On the other hand, the union should also be mindful of the other writing on the wall.  This is a dangerous time to gamble with your place in the content food chain.  The rise of YouTube and blogs and other amateur content sites means things are changing and consumers won’t be held hostage to a long drawn out strike: they might simply move on to new forms of entertainment.  If the Guild plays its hand too stridently, we could see amateurs filling the void, closing the holes.  That might mean more reality programming and more short-form and funky offerings.  Consumers are now producers, after all, and they might, out of necessity, turn their attention to new kinds of content.  So, the WGA should beware.  Nature abhors a vacuum–but not as much as consumers.  Thing is, leave them high and dry and this time the consumers might just amuse themselves. 

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