Thursday, January 24, 2008

What can striking WGA writers learn from video game writers? A lot.

This year's WGA awards are featuring a new award devoted to video game writers. The award, I am sure, was created to increase the ties between television/film writers and writers in the video game industry in order to set the foundation for video game writers eventual migration into the WGA structure. While specific games selected by the nominating committee might leave those of us who actually play video games doubting the sanity of the WGA, the fact that the WGA is reaching out the the video game community proves them to be not only sane but savvy. The quicker the WGA reaches out to the video game industry, the better.

The WGA should have begun looking into a partnership twenty years ago when games like Zak McCracken and Maniac Mansion were already showing the link between film and game (you can watch the introductions to these games below). George Lucas understood that video games can tell stories, and that there was a demand for computer based games. But it is better to be late, as is the case with the WGA and their outreach to the video game industry, than never.

Had the WGA reached out to video game writers/designers earlier, they might have been more prepared when going into negotiations seven years ago. They would have had members who had experience with "alternate revenue streams" and not bought into the studios selling them on the "unpredictability" of the DVD sales market. Luckily, there is time to learn more lessons from writers and designers in video games and to benefit from their outlook when it comes to alternate revenue streams.

In a recent article on Gamasutra, a United Business Media (the people who own PR Newswire and CMP) site devoted to the gaming industry, Tom Buscaglia discusses a recent negotiation he entered into with a game company and how he ensured his clients received a fair share of the revenue the game would produce. One of the first points that Buscaglia made was that their are "some things that publishers excel at and one of them is coming up with new and innovative ways to commercially exploit games." The publishers, like the movie/tv studios, may not know how to make a good game/show/movie (or even how to recognize one), but they certainly know how to make money off of one when it is successful. Buscaglia reminds us as readers that this means that those going into negotiations with publisher (and by extension producers) need to go in with their eyes wide open.

Buscaglia sites a common mistake that people make when entering negotiations with a publisher. What is it? "Often the developer is so focused on getting a publisher to sell their game that all they look at are the royalties from game sales." This is a huge mistake, according to Buscaglia, because, "If all the developer asks for is a portion of the revenue from the sales, what’s all they’ll get, regardless of how much ancillary revenue a game generates. And publishers are getting really good at finding innovative ancillary revenue streams from the games the sell."

That's right. If all you want to do is secure that you receive a percentage of sales, that's all you're going to get, but don't fool yourself into thinking that is all the publisher is going to get. I wish that the WGA understood this in their earlier negotiations with the producers and studios. The "suits" certainly understood this, even as they were dickering a low residual rate for the writers. What about business to business (B2B) revenue created from advertising sold on studio websites when episodes are streaming? Nope. None of that, but the studio is certainly making money that way. The writers were already getting B2B revenue from syndication, why didn't they see that there might be other B2B revenue streams?

What might one of these alternate revenue streams look like? Once again, we can look to the Buscaglia article and the video game industry. "Eventually, through some rather persistent negotiating, we were able get the publisher to agree to pour any in-game advertising and any B2B revenue into the revenue pool." So...they made sure to get a share of business to business revenue, and...what's this? They also got the publisher to pour in a share of "in-game advertising?" When was the last time the writer's asked for a share of "product placement" revenue? It is the film/tv equivalent of in-game advertising after all. If Bruce Willis drinks a Pepsi in a movie, and the funders are benefiting financially from that event, the writer should be getting a share of that revenue as well.

Buscaglia, in representing video game developers, tries to ensure that his clients are a part of any potential future earnings. For example, just "in case the publisher found any other way to exploit the game that was had not covered, [he] also include[s] in the contact a "catch all" provision pouring any and all revenue from any commercial exploitation of the game from anywhere into the royalty pool to be split with the developer."

Certainly, the fact that Buscaglia is representing individual clients (and not a whole union) enables a certain degree of liberty in the negotiating process, but the WGA could certainly learn from the way he looks at a creative property as a revenue source.

Here is a list of what I think the WGA should be getting:

  • Continuing Syndication Revenue: Yes, syndication is dead. And yes, they are already receiving syndication money, but this revenue stream needs to keep trickling.
  • DVD Residual: Like syndication, this revenue stream is actually already dead -- it just doesn't know it yet. And writers are already receiving some revenue from DVDs. They need to milk this for as much as they can get, for as long as they can get it. They also need to understand that it isn't going to be around for much longer.
  • Internet Download Residuals: These too are actually already dead. That's right, this "wave of the future" way of selling movies is already obsolete. Sure, it will pass through a period of high revenue, but it will die and quickly. Once again, that shouldn't stop the WGA from getting their members a share.
  • Revenue Sharing from Online Display: An absolute must. This may, or may not, be a long lasting future source of revenue, but revenue sharing -- rather than a "per view" payment -- is an absolute must.
  • Cell Phone Viewing Residuals: What? Cell phones? Yes, and I'm not talking iPhone downloads -- but those too. I'm talking about "on demand" cellular viewing technology, or streaming cellular video technology. People will be using their portable devices to watch tv on the go. In fact, the WGA should be negotiating for all of the TVs of tomorrow.
  • Percentage of Product Placement Revenue: This is most likely going to have to be negotiated by individuals, and likely will be limited to "creators," but the writers had better be keeping his revenue in mind. My acquaintance Rob Long likes to talk about how everyone knows that the "King of Queens" works for UPS, and that the studio is watching a revenue go down the drain every episode. The studios, and the show's creators should be fighting to get UPS money if they can do so without losing creative control.
  • A percentage of any future revenue source I can't predict: I'm not able to see into the future, but the WGA and writers need to be thinking about any future revenue now. They either need to get a better "percentage" in the long run or demand more money up front.

Maniac Mansion Introduction

Zak McCracken Introduction

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