Friday, April 4, 2008

Why the Strike Was Important

This week's South Park episode had all Canadians going on strike. They called themselves the "Canadian Work League" (or something similar) - or "WGA" for short - and they simply wanted "more money." When they were told there was no more money to give them, they demanded "some of that Internet money."

It was a pointed reference to the WGA strike and the points it made were that the Canadians don't really do anything, there is no money to be had online, and the concessions the production companies gave the writers was nothing but a peace offering to shut them up, save them some face, and get them back to work. In the end, Canada set their prime minister adrift on an iceberg for having led them into a losing battle.

As per the standard South Park rubric, Kyle summed-up the entire message right before the credits rolled in a soliloquy imparting wisdom belying his age. In it, he noted that the WGA's battle was a losing one because there is no money in the Internet, as it is still too young an emerging technology to be commercially viable, thus the producers had every right to depend on their proven distribution methods (TV, theaters, DVDs, PPV, subscription cable channels, etc.) and expect to continue receiving the (then) current rate of returns from them.

And while I love Trey Parker and Matt Stone and agree with almost everything they have to say through South Park, I disagreed with 95% of this episode. The producers are making money hand-over-fist from streaming Web media and DVD/CD sales, and the original creators of that content have every right to expect dividends from their work, the same way they do when it is distributed in the traditional manners!

South Park's faulty logic featured parodies of several Internetainment "celebrities" from the past couple of years - the kid who sang Chocolate Rain, the guy who cried for us to "Leave Britney alo-o-one!," etc. - lined-up in a lobby, waiting for their "Internet money." Except that these guys did not know wtf they were doing and/or did not create their content for pay; they uploaded their content, freely, to YouTube and similar sites and their individual content became viral hits all on their own. Had they been looking to turn a buck on their work, they would have known to create a website and/or submit their content to paying venues. Further, aside from maybe a few e-mails to friends and the like, they did not market and promote their content the way executives do, and they certainly do not have access to the same means for doing so!

The companies at the center of this battle, on quite the other hand, offer streaming content online through paid subscription services, such a iTunes, and advertising-based sites; whether they get the money directly for the content they provide or they give the content away for free, they still make money on the advertising placed on the sites which distribute it, as well as that placed in the content, itself! Unlike members who submit content to YouTube and the like, major media companies know exactly what they are doing and they never give anything away for free!

To South Park's credit, it is true that the WWW is still an emerging technology and is not a commercially viable alternative to traditional distribution venues - but only to the extent that it doesn't grant the level of returns that the traditional methods do! Making $100 online is tantamount to making $10,000 on TV, so it isn't that it doesn't work, it's just that the stakes are much smaller. But if the companies are making any money on the creators' content, then they owe the creators their due!

And when it comes to DVD/CD sales, what more need I say? At a cost of roughly 25¢ per unit to manufacture, produce, market, and distribute, with a sticker price of anywhere from $19.99 - 49.99, South Park is trying to convince us that there isn't enough money involved to justify the strike!? That one's a no-brainer, so let's stick to the WWW:

Granted, the technology is still young, but part of the reason its development has been so retarded lay with these executives! These fat cats have a vested interest in making sure the Web doesn't succeed as a distribution venue. Of course, it works brilliantly in this regard, but its reach is very limited; even with over 1 billion Internet users, worldwide - 250 million of whom have high-speed access - that still only amounts to less than 15% of the population! And since high-speed access is necessary for the proper delivery of streaming media, we're talking about an audience of approximately 250 million households, primarily in industrialized areas. Obviously, both TV and movies reach far greater audiences across a much broader spectrum.

As of 2006, 1 in 10 people watch TV online, though almost none of them (only 1 in 4) reported a change in their regular TV-viewing habits - meaning they watch more TV: they watch as much TV as they always did offline, and use the Web to watch additional television programming. In fact, almost 2/3 of Netizens logon daily for entertainment and an additional 15% said they logon for entertainment several times a week (as opposed to daily). Compared to the numbers of traditional film distribution audiences, these may be minor, but let's put it into perspective:

Increasingly, world powers are calling for changes in the Internet infrastructure and pricing, as less-industrialized countries are benefiting least from the "Internet boom" (obviously) and they wish to diminish the gap between those nations and the rest. The whole "free Internet" movement never died - it has, in fact, gained a lot of ground in recent years! Consider the growing number of public outlets offering free wi-fi access (restaurants, electronics stores, public services buildings, more) and the success of the recent $100 laptop program (albeit limited, due to litigious battles), and you have a more replete idea of just what is at-stake here. Further, consider how many people have Internet access today, as compared to 10 - or even 5 - years ago; now consider that in terms of high-speed access!

When you put all of this together and do a little math, you come up with some pretty incredible projection numbers as to how many people will be online, and watching streaming media, 5-10 years from now... and that's where the WGA strike starts to make a whole lot of fiscal sense! Especially when you factor-in the possibility of any of these political movements "exploding" and making real strides in that time.

So, contrary to what the recent South Park episode emphatically stated, the strike was necessary and did make headway. Like I said before, I couldn't make heads nor tails of the settlement - largely because they did their best to obfuscate everything - and I do not agree with unions in general, but the long and short of it is that the producers and executives tried to treat the writers like fools and the writers were smart enough to see through their bullshit and stand up to them. While it may not have had an immediate impact, it certainly sets a precedent that will have lasting effects, beneficial to the actual creators of the content from which the bean-counters most certainly are making money online.

© C Harris Lynn, 2008

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