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Abstract

The paper examines the writer's guild strike of 2007-2008. A brief introduction of the strike is given. The main issues that brought the strike are tackled. This is done to give the strike perspective.The effects of the strike on the parties involved are discussed in-depth. These are the effects to the community at large, employers and employees.

Introduction/Historical background

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The writer's guild of America strike that occurred from November 2007 to February 2008, was  a strike by the writer's guild of America west (WGAW), and  the writer's guild of America East (WGAE).The labor unions of WGAW and WGAE  represent writers  who write for television, film and radio in the United States. The goal of the strikers was to rectify the historical injustice to the writers of America. The injustice is that writers in America receive little monetary compensation in comparison to the profits made by the studio owners (DeVol and Bedroussian 42-44).

The targeted companies are AMPTP, which is a conglomeration of around 397 American Television and film producers. The striking writers' negotiators reached an agreement on 8.2.2011. The boards of WGAE and the WAGW approved the deal unanimously on 10.2.2008. Two days later, striking writers voted to end the strike (DeVol and Bedroussian 42-44). These two guilds went on strike for 100 days. This is in contrast to the longest writer's strike of 1988 that lasted for 153 days. The 2008 strike cost the L.A economy an estimated US$ 1.5 billion (DeVol and Bedroussian 42-44.

Issues of the strike

The writer's guild negotiates a fresh basic agreement every three years with the AMPTP. This is because the writers are employed through this organization. The contract agreed upon is called the Minimum Basic   agreement. During the board negotiation of 2007, there was an impasse (DeVol and Bedroussian 42-44). After the impasse was reached, the membership of WGA decided to call a strike. The main issues of the strike are mentioned hereunder.

DVD residuals

The writer's guild had gone on strike in 1985, because of the home video market. At this time, the home video market was small, and its distribution was through video tape. During this time, the entertainment companies argued that home video had not proved themselves in the market. The entertainment companies said that the delivery channel for these home videos were extremely expensive. This is because the said companies had to manufacture Betamax tapes, VHS and Laserdisc. Movies were being sold at the range of around US$ 40-100. A formula was agreed upon in which the guild writers could get a 0.3 percentage of the first million on the gross sales reported. After the gross sale writer percentage, the writer could receive a 0.36 residual (DeVol and Bedroussian 42-44).

After a short period, the home video market exploded. The manufacturing costs of video tapes dropped dramatically. Writers began to feel that the deal they had agreed to was unfair to them. DVDs made their debut in 1996, replacing the expensive VHS.  By 2001 DVDs had become the dominant format. The contract of VHS continued to be applied to the writers in relation to DVDs. The writers felt that this was unfair. The home video market has remained the chief source of income for movie studios. The WGA proposed that the writer's residue be increased to 0.6. This is because this is the income that writers rely on in times of unemployment. Periods of unemployment are rampart with writers (DeVol and Bedroussian 42-44). This is because they are employed on a contractual basis. The request of doubling the residual rate from DVD sales was the one of the main issued for the 2007-2008 strike (DeVol and Bedroussian 42-44).

New media

Another main issue of the 2007-2008 writers' guild strike was the contentious issue of residuals for emerging new media. This is the compensation for  movie and related products delivery channels  such as smart phone programming, IPTV, Internet downloads, straight - to Internet content, cable TV ,Satellite TV and video on demand cable. The battle is because presently, WGA does not have an agreement with entertainment industries in regard to the use of online content (DeVol and Bedroussian 42-44). As to the writing of this paper, two models of proposed Internet distribution are under negotiations. The first is Internet sales, technically known as electronic sale- through. In this sale, the final consumer buys a copy of the program. The consumer then downloads into a local storage device. This is for the subsequent viewing of the consumer. Examples of this model of purchase include movies bought thorough Amazon Video on Demand and iTunes stores (DeVol and Bedroussian 42-44).

The second model allows the consumers to   watch programs in real time as the program is transmitted to their computers, without the consumer saving the program. The predictions are that new media is going to supplant DVDs in the broadcasting market, and the home market. The entertainment industries have been arguing that new media is a market that is untested. They argue that new media has not been proved in the market. WGA membership reason that the new media is going to resemble the deal they have had for DVDs. In short, the WGA members think that they are going to be short charged again (DeVol and Bedroussian 42-44).

Jurisdiction in reality and animation

The members of WGA work on a variety of other programs besides live action scripts for television and movies. These include animation and reality TV. The Minimum Basic agreement has not worked formulations to cover these other programs. This has been one of the issues that contributed to the strike of 2007-2008. This is because the jurisdiction for reality and animation programs has not been established. This is despite the fact that WGA has been working on the issue for close to seven years now (Albanesius 54).

Effects of the strike

The strike of the writer's guild that hit Hollywood from November 2007 to February 2008 has had damaging effects on the Californian economy. All the parties that are involved in the strike have suffered many effects. These include the employees and the employers. The L.A community at large was adversely affected by the strike.  This is because Hollywood is the chief industry in Los Angeles. The three month strike almost crippled the entertainment industry. This is because as to the writing of this paper, the entertainment industry is still recovering from the effects of the strike (Albanesius 54).

The strike has also caused   considerable losses in terms of wages, employment, personal income and salaries. The state of California has   shown that a total loss of around 37,000 jobs occurred because of the strike. It has been shown that the total revenue lost by workers is close to US$ 2.1 Billion. The total amount of revenue decline among workers has been shown to be close to US$ 3.1 billion (Albanesius 54). The 14 weeks strike had considerable negative impact on the economy of California. The Impact on the Los Angeles country was devastating. This is because, the stoppage of work came at a time when there was significant downturn in the housing market of the state (Albanesius 54).  Economic analysts have postulated that the writers strike was one of the factors that contributed to the economic recession of California in 2008. The entertainment industry encompasses many other industries in California. These include the hospitality industry, the leisure industry and the information industry. All these industries were affected by the writer's strike of 2007-2008.

Effects on the community

Before, the paper progresses into the effects of the strike on the employees and employers, it is important to tackle the effects of the strike on the Californian community. This is because the entertainment industry is the chief industry of California. It has in turn anchored other industries like the leisure, information and hospitality industries. The strike effects rippled through the Californian state, affecting most of the people in the state. State revenues were affected as well as other states. Main economic indicators of the state were affected (DeVol et al, 64).

A chief impact of the writer's strike of 2007-2008 was the significant drop in the viewership of television. This is because, as the scripted television shows ran out of new episodes, many people began to turn way from network television. They turned to other forms of entertainment. This was a big blow to many broadcast networks. This is because, they watched as their revenues from advertising sank together with their ratings (DeVol et al 64).

Another chief impact of the strike is that the economy of California was dramatically affected by the strike. This is the reason that made the governor of California to come into the dispute, and offers to mediate (DeVol et al 64). The effect of the strike on the economy was so large that all the presidential candidates offered to come and mediate in the wake of the strike. This is because the state economy of California was widely affected by the strike. Most of the people who used to come for the leisure industry like gambling out of state stopped. This means that revenue stopped coming to the Californian state. Workers who used to work in unrelated industries like the hospitality industry stopped working. This is because their industries rely on the entertainment industry. The loss of revenue for the employees of the striking companies affected the whole state of California. This is because the families of the affected workers suffered financially. The three months of the strike devastated the personal incomes of most families in Los Angeles (DeVol et al 64).

One of the negative social impacts of the strike on the community was that there was an increase in viewing pornography. This is because the people who crave for original television scripted shows were forced to look for counterparts in the socially despised pornographic industry. This was especially so for the young, and television addicted audience. Although it has been difficult to estimate the number of people who turned to pornography in the wake of the strike, the fact is that a sizeable number of Americans did turn to pornography (Adalian 32).

One of the positive effects of the strike is that it affected the performance of school kids on learning. This is because it was observed that the score of children turning to their homework in the wake of TV show cancellation increased. In the past, as in the present scenario, television shows have been seen as the culprits that have made most children neglect their studies. It has been found out that most elementary kids cannot read for more than 45 minutes in America. This is because they are busy watching television (Adalian 32). This has had the effect of lowering the education standards of America. The three month break helped restore diligence in academics to a small number of children in America. The results of this minor triumph are difficult to measure because of the short period of the strike, and also because the number of kids in school is relatively large (Adalian 32).

It has been anecdotally put that one of the positive effects of the writers strike on American families was to restore love to most marriages going asunder. This is because most couples had nothing to do but have one another in the wake of show cancellation.  This observation is difficult to   prove academically, and the paper is not going to pursue it. The strike also changed the viewership of the American public significantly (Adalian, 32). This is because the number of television networks affected was too great.  Most television stations turned to airing documentaries to substantiate for the cancelled shows. This had the impact of changing the tastes of a small number of Americans. The effects of the strike continue to be felt on the Californian state. This is because the strike came at about the same time as the global financial recession. This means that California was doubly affected.

Effect on Employer

The writer's strike of 2007-2008 had the most dramatic effects on the performance of several chief television networks in the country. The stoppage had a devastating crippling effect on many shows that had been scripted. This crippling of many prime time shows dramatically affected the ratings of many television networks.  Television network schedules for three consecutive seasons, from 2007 to 2009 were affected. From the last week of January, 2008, ratings of most broadcasting networks were down. It has been shown that the top five broadcasting networks dropped by an estimated 21%. This drop was directly attributable to the strike of the writers (Amel and Cryan 21).

As television episodes began to run out, network ratings started to fall by a substantial percentage. It has been observed that when the strike was in the middle, network ratings had fallen by 10%. Even networks like NBC, which are reputed for fast replacements on the reality programs, fell in ratings by 7%.  Another key broadcast network, CBS fell by 26%.  ABC fell by 23%.  The falling rates affected most network broadcasts negatively. This is in the field of finaces.This is because many advertisers began pulling out from existing advertising contracts. The advertisers were blaming the broadcast networks for failing to guarantee audience viewership. This was particularly so when new episodes were cancelled, or delayed (Amel and Cryan 21).

The loss of revenue of the broadcast networks was enormous. This is because, as the paper has stated in another section, advertisers refused to place adverts on many broadcast networks. It has been estimated that the entertainment industry lost close to US$ 2.1 billion in revenues. This is in the span of three months when the strike was active. This amount is more than the amount lost during the 1988 writers strike. During the referred strike, only US$ 500 million was lost by the entertainment industry.  As entertainment is the leading industry in California. The effects of the strike were felt by other industrial employers (Amel and Cryan 21).

Some of the other industries that directly lost revenue as result of the writers strike are the leisure, information and hospitality industry. This is because these industries are dependent on the entertainment industry.  During the last quarter of 2007, when the strike came into force, the catering industry lost close to US$ 55 million. This is a loss that was absorbed by the employers. Other employers who lost significant amounts of revenue are the leisure and information industry bosses. The Californian leisure industry lost almost half of its revenue. This is because most of the clients were striking. This is especially so in the county of Los Angeles (Amel and Cryan, 21). The industry bosses lost so much as they watched the wrangles in the entertainment industry.

The information industry bosses lost a lot of money. This is also true for the financial industry. These industries lost on the home front as well on the stock exchange (Amel and Cryan 21). The rating of many public companies on the stock exchange fell dramatically. The stocks of some of these companies almost crumpled (Amel and Cryan 21). This was made worse by the fact that the world was experiencing a minor financial recession that came to be known as the global financial recession of 2008-09.  The stock of many studios fell further when it was reveled that the actor's guild was planning to stage a strike in 2009.  By the time the negotiations came to bear fruits some major studios were almost crumbling (Amel and Cryan 21).

Effects on employees

The striking workers were most affected by the strike. Other workers that were affected by the strike are workers in related industries. Some of these industries include manufacturing industry, leisure industry, hospitality and information industry.  The projections made on the effects on employees indicate grim reality in the side of finances. As has been stated earlier, the strike started in the last financial quarter of 2007. In this quarter, at least 1000 full time jobs were lost. The estimated projection of revenue lost by the striking writers has been put nominally at US$ 57.5 million (Chang 17). This projection and estimate of the total losses in the first phase of the strike has been grossly underestimated. This is because the strike started in November. This was at a time when most writers and technicians were still on payroll (Chang 17).

The effects of the strike continued to be felt by the turn of 2008. This is because at this time, the effects of the industry had begun to be felt by the non manufacturing industry. This industry started suffering a decline in employment. This is because 14,000 jobs were lost in this industry. This was only in the first quarter of 2008. The jobs in the leisure, information and hospitality industry were largely affected.  In the first quarter of 2008, the stated industries lost close to 7,500 jobs. In the second quarter, the industry lost close to5, 000 jobs (Chang 17).

The professional and business services lost considerable numbers of workers. In the first quarter of 2008, these business services lost an estimated 2800 jobs. In the second quarter, the said business lost around 3200 jobs. The transport, trade and utility industry lost around 1700 jobs in the first quarter of 2008. In the second quarter, they lost close to 1000 jobs. The health, financial and education sectors were also affected, although in a minor way. This is because, the said industries lost an estimated 300 jobs. This is in the first quarter of 2008. In the second quarter they lost about 800 jobs (Chang 17).

In the financial arena, many workers were affected by the strike. This is because workers in the business and professional services lost an estimated US$ 183.8 million. This was lost in salaries and wages in the first quarter of 2008. In the second quarter, they lost close to US$ 147.3 million. Those employees in the utility, trade, and transport industries lost around 200 million. The strike also affected workers in the construction and mining sectors. These lost an estimated US$ 13 million in the first quarter. In the second quarter, they lost US$ 55.2 million in wages and salaries (Chang 17).

Conclusion

The writer's strike of 2007-2008 had many devastating effects on all the parties involved. Although it was only for 14 weeks, its economic devastation was far much worse than the 23 weeks strike of 1988 (Chang 17). This is because, the economic damage of the latter strike is greater than that of the former strike. This strike nearly collapsed the economy of L.A. It is the hope of this paper that in the future, strikes of this nature will be avoided. This is because they wreck a lot of damage to the parties involved.

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