After I casually mentioned my support of the writer’s strike, a good friend told me that he thought that the strike was bad, in part because the writers should be getting a share of the profits and not of revenue (and since there were no profits in internet video yet, they should be getting nothing in the internet yet, hence, no good reason for the strike.)
The response to that, of course, is that you can’t trust the studios to report their profits at all accurately- even if they were going to be honest with their writers (unlikely), they have plenty of other incentives (including tax rules) that make them distort their profit reports. Revenues are much more easily auditable, so one of the things you get taught even in first year contracts is that rational participants in the process key their payments off revenue instead of profit.
Two reminders of this came across today that I thought might be instructive for people interested in the issue but unfamiliar with how Hollywood functions. In one, the folks who did the Lord of the Rings movies have been failing to pay the royalties owed to the Tolkien family. Oops. Six billion dollars in revenue, and apparently no payment to the writer. (Of course, they didn’t pay Peter Jackson either.) And it happens in lower profile cases too; the LA Times has a good writeup of ‘Hollywood accounting’ today too, completely outside of the high-profile Tolkien/Jackson cases.
Hopefully I’m not the only one who finds this fascinating ;)
4 thoughts on “why the writers demands shares of revenues instead of profits”
Luis Villa’s Blog / why the writers demands shares of revenues instead of profitsHot ! – 13 minutes ago wearehugh : Luis Villa’s Blog / why the writers demands shares of revenues instead of profits – because accountants are paid to make numbers lie Tags : finance # copy
i starved and froze for nearly a decade working on numerous film & television projects in new york city. my basic work day was 12 hours, many times this turned into 18 hours, and may pay hardy ever was adjusted beyond a daily rate of $125.00. the accounting department caled this a negotiated rate, although if i didn’t like the rate that was offered, then i did not get the position.
finally, i quit. i wold rather find a business or industry where i wil have a greater opportunity to earn a fair wage.
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Actually, this is a very interesting subject, and as you know this is not unique to Hollywood. The music industry has also been accused many times of shady accounting designed to disadvantage song writers and performers. (Universal was just sued a few days ago over these issues.) I think such practices are ultimately counter-productive to the interests of the studios and labels, because they weaken public support for a system of copyright supposedly instituted to protect the interests of artists.
I think such practices are ultimately counter-productive to the interests of the studios and labels, because they weaken public support for a system of copyright supposedly instituted to protect the interests of artists.
The problem, of course, is that historically the studios and labels didn’t need public support, so they’ve been used to doing this since the studio and label systems were created. Tough to break getting on a century of bad habits when all the sudden the public has alternatives.
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