Eisner's advice to striking writers: Blame Steve Jobs, not the studios
NEW YORK--In his keynote speech on Wednesday morning at the Media and Money conference hosted by Dow Jones and Nielsen, former Disney CEO Michael Eisner talked about writers as though they were a minority group that he didn't particularly understand well. "I like writers. Some of my best friends are writers," he said as though attempting to save face. But nevertheless, his foremost epithet for the ongoing Writer's Guild of America strike was "stupid."
"I see stupid strikes, and I see less stupid strikes. I see smart strikes," Eisner said in the keynote, which was structured as a conversation with Neil P. Cavuto, senior vice president and managing editor of Fox Business News. "This is a stupid strike."
The problem, Eisner said, is that the Writer's Guild is lobbying for a bigger cut of the profits from digital distribution--and according to the former Disney chief, those profits simply aren't there. Eisner, now the head of a private investment firm called The Tornante Company, has launched an online video studio called Vuguru, and said that it's still more or less a fruitless labor. Vuguru's debut series, a serial mystery called Prom Queen, "didn't make money," he said.
Cavuto, naturally, played devil's advocate and asked Eisner why he's sticking with it. "First of all, I'm doing it because I think it's fun, I think it's the future, and I think it's interesting," Eisner replied, "(but) I'm begging advertisers to give me enough money to break even."
At the moment, Eisner said, digital media is too new to be profitable. "The studios are there because they don't want to be in the transportation business and telling everybody that they're in the train business," he said. "They want to be in the entertainment business, and God forbid they should forget yet another distribution track." In other words, they don't want to get left behind.
He said it would take about three years for Web video and other forms of digital distribution to gain enough of a foothold to be profitable--and that's when the Writer's Guild would have a case to make. "What I'm saying is for a current writer, for six thousand people to give up today's money for a nonexistent piece today is stupid," Eisner asserted. "They can do it in three years. They shouldn't be doing it now." Right now, the profit from digital content is "a piece of a nonexistent flow, which won't be nonexistent, but it will be nonexistent for the next three years."
One thing Cavuto failed to ask Eisner, who estimated that the Writer's Guild strike would dissipate by the end of next week, was exactly how Web video would start to be profitable. Presumably, advertisers will warm up to the opportunity.
But Eisner acknowledged that the studios and networks aren't entirely faultless. Their problem, he said, is hyping up digital platforms as being more profitable than they actually are. "It's a double-edged sword. The studios deserve what they're getting, because they've been announcing how great (the Internet) is. But then they open their books."
Eisner, a well-known critic of Apple (whose CEO, Steve Jobs, is a powerful member of Disney's board of directors), suggested that the profits may be getting sucked up elsewhere. The studios "make deals with Steve Jobs, who takes them to the cleaners. They make all these kinds of things, and who's making money? Apple! They should get a piece of Apple. If I was a union, I'd be striking up wherever he is."
"Cupertino?" Cavuto offered.
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline.
Eisner needs to spend more time learning how to use a PC and an iBook, and less time explaining why he is the best thing Disney ever had.
The King is dead.
and i am a little fuzzy on how Jobs enters into a writer's strike at all. because he promotes iTunes?
so TV writers hear that iTunes is making money and then strike because they want a piece of... itunes? because Steve Jobs is a big TV guy? what the hell is eisner talking about?
wreaking havoc in the Disney empire and tried to beat down Pixar.
When he soured that unbelievably profitable partnership he lost all
remaining credibility with the Disney Board. He takes every
opportunity to sharpen his claws on Apple or Steve Jobs or Pixar
[though he's quieted his criticisms once Disney bought them up].
Eisner is a bitter has-been.
they just get screwed?
Someone's not being forthright here.
...calling Arthur Andersen...
Edison, who ironically attended and promoted the launch of
Universal Pictures when it opened in the early 20th Century.
There's nothing new about this at all. But, when the food isn't
on the table for the creators, and there are Jumbo Jets flying an
individual's ego, then obviously there's a gap that isn't right. i
think both sides would agree with this. And, of note, don't you
think the egg was put before the chicken when the 1 millionth
music download occurred? Who promoted that? How did we all
come to know about that little tid-bit?
One word: Netflix.
You can download a rented movie from 'em over broadband, and it takes very little time at all to do it. Netflix seems to be doing alright by themselves, even turning a profit and slaughtering the marketshares of traditional video rental houses like Hollywood Video and Blockbuster.
So I suspect that if a media company CEO can't even acknowledge (and even refutes) something that big, he's either incompetent or trying to push an agenda. I'm thinking the latter, along the lines of "poor me, I'm going broke selling stuff online and those bastich writers want their cut too! *snif*"
Whatever - Netflix is but one of numerous examples of companies who have zero problems with digital distribution, and the movie houses are going to have to get used to the idea that they're no longer the only game in town.
/P
born content was only available by Radio and TV. Today you have a
wide range of choices in the digital realm for distribution. So why
blame Apple for leading the way in online digital distribution. It
seems they have a well established system for paid content.
This isn't rocket science. If it is, then it's a good time to simplify.
That said, the writers aren't just looking to get paid from internet distribution. They are also eyeing the DVD royalty also. Correct me if I am wrong, but I think the studio makes money (A LOT OF THEM) from DVD. That's the pie they can definitely cut up and give to the writer.
The entertainment industry is populated almost entirely of
nephews and sons. When you get to about the third or fourth
generation of nepotism, with each previous generation "watering
down" the genuine intelligence of the first generation by
marrying vacuous bimbos to sire their children, you have little
but empty suits with no brains who have grown up in an
atmosphere of entitlement. Really, it's very much like the old
days of hereditary royalty. The first guy got to be in charge by
leading an army and hacking his way to the top with a sword,
but his great grandson sits on the same throne eating himself
stupid and surrounding himself with yes-men who tell him he's
brilliant.
The big media companies do not create anything. In one of their
business practices, they do enable the creation of content by
providing the up-front capital. But because of their lock on
distribution, they can extract completely unreasonable terms
from anybody who wants to get paid for producing that content.
With the way that the business is structured, there's only one
game in town - it just has many faces. It's highway robbery in
the classic sense - they control a critical piece of the road from
creation to the consumer and get to take away as much as they
can carry.
That is, there was only one game in town. Now comes the
Internet - you don't need a network of affiliates all over the
country, you don't need to buy into a basic cable distribution
package, you don't need to grovel at whatever deals the
incompetent cartel executives tell you are in your best interests
and ultimately you don't have to just swallow it when they tell
you to dumb it down and add more T & A. If you can get it
created, the Internet will take care of the distribution for what is
essentially free (at least, if you can figure out a way to make
money, it'll be a tiny fraction of what people will pay).
The content cartels' days are numbered, and they're going to
blame everybody they can for the extinction of their business
model when it's really just the march of technology that has
finally obsoleted their highway robbery.
We're not there yet but Apple, and anybody else who can figure
out how to cut the cartels out of the decision making process
while still allowing content creators to make money, is going to
put these dinosaurs in the ground. And not a minute too soon.
pulled out of a contract from iTunes and are giving away free
shows on the web.
The writers and producers and so on are NOT receiving a penny
from this free distribution to millions of consumers. NBC said it
is a promotional advertisement that is not part of the actors,
writers, producers, etc, contract to receive any residuals. Even
thought these free shows have paid advertisement or
commercials in them. In another words NBC is making a
substantial amount of money from these "Free" shows on their
web site.
know that in music, it's around 30%. Let's say its the same.
For a studio, that means a 70% cut with essentially no extra
costs. There is some minimal one time costs to encode the video
in Apple's format and provide the necessary artwork. That's it.
Apple pays for the bandwidth to download the movies and
studios get their 70% cut.
Zero costs, 70% cut of revenue, umm, if you can't make money
in that scenario, you suck as a businessman.
I love how folks are looking to blame Apple for everything these
days. There is no way the problem could be with the actual
studios, because THEY would never do wrong by the actors and
writers. They have the purest of hearts... which is why you
NEVER accept net revenues from studios. Instead, you look at
gross revenues, else you'll never see a dime.
is prohibited.
I guess an article with the title "Blame Steve Jobs" is not considered
a personal attack.
Begging for advertising?!?! How lame is that.
Get a life, get some half decent content and get a CLUE!
market, which is the real reason for the strike. The writers were
told by Nicholas Counter III years ago to have a "wait and see"
attitude toward that market, and look what happened. Mr. Eisner
also fails to point out the phenomenal success of Itunes, which has
brought billions into the music business. Better to be late to the
table than never, Mr. Eisner.
Right now I am seriously considering cancelling cable TV since it is mostly reruns, ads and infomercials and little good content. The internet may actually contain already more good content than TV.
I am willing to pay for good entertainment, but cable is too inflexable so I pay for mostly what I do not want to watch. The internet offers targeted ads (googlization) but can offer targeted content that is worth more because I get more what I choose. Somebody will soon find a business model for this. Right now Netflix saves the day for me.
These are the same suits who are deaf to the demands that the internet speed up. This country is lagging well behind the rest of the developed world that is closing in on speeds of 20Mbps, while we hover around... 3 (three) Mbps. If they think they will succeed in creating a two-tier i/net, they need to be retired, no - fired, right now! The phone companies wouldn't get with the times, and now they're replaced by Skype, Gizmo, Grand Central, EQO to name a few, free or cheap, alternatives. Cell phone carriers are next. TVs will be gone in a decade or so. Maybe sooner.
Eisner's comments about "nonexistent" income for writers is laughable... the number of DVDs sold each year just keeps growing, and I'm sure Disney has an income stream from them (as does each director). Why shouldn't the writers get income from their work?
- Eisner is half right ... con artists beware!
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by George Riddick
November 7, 2007 3:51 PM PST
- Finally!
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Reply to this comment
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by substrata
September 23, 2008 4:50 AM PDT
- George P. Riddick, III is a man with a mission. A man with a singular and almost fanatical crusade to seek out and destroy those he claims to have violated his copyright and therefore should be burnt in hell (or pay out substantial amounts of cash, whichever the courts decide first, I guess)!
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Showing 1 of 2 pages (51 Comments)Is Mr. Eisner the only business executive in the traditional media/entertainment industry who gets this? I sure hope not.
Of course, the Internet crew is full of "con artists", as one of your readers noted earlier. Half the top billionaires in this country come from this lot. Do you really think they have gotten there by playing fairly or respecting the rights of writers, artists, and other copyright owners?
And there are no profits in this entrie distribution channel to share with the original creators of content??? Give me a break!
These traditional media executives should have their salaries cut by 1/3 every time they "strike" a bad deal with the Apple's, Google's, Yahoo's, or Microsoft's of the world. Problem is ... they'd all be on the streets by year's end.
Where are the young "deal makers" in the modern media/entertainment companies? Can it be that every "modern" rocket scientist, investment banker, and spinmaster we have left in this coountry now works for someone in Silicon Valley or Redmond?
Wake up folks. If there are profits to be made down the road, why can't those terms be written into a fair and equitable agreement today?
A prolonged strike is not the answer.
I am certain of one thing. This strike sure isn't stopping the overflow of cash in the bank accounts of these Internet self-proclaimed "visionaries".
If the entertainment industry doesn't wake up soon, we'll see Google and Microsoft (and perhaps even China) stepping in to arbitrate these royalty issues.
Who wants that to happen?
George P. Riddick, III
Chairman/CEO
Imageline, Inc.
griddick@imageline2.com
What George P. Riddick, III is possibly unaware of however, is that his collection of bitmap clip art is vastly out-dated crap that no one in their right mind apart from the odd backwater church community or primary school would ever nowadays use. Although he still viciously pursues and targets those as well.
With the immense and truly wonderful power of the Internet, search engines as powered by Google and Microsoft collect and index information that makes it easier for everyone to find images. Mr Riddick is ferociously against this as he believes they infringe his copyright by holding his images on their servers, and therefore people can search and use them freely.
(Read his comment to an article here:
http://seekingalpha.com/article/48337-microsoft-banks-170-million-in-first-day-of-halo-3-release)
Well, I guess of course this would be correct them if the images you are so fiercely protecting do not have a copyright watermark on them!
Oddly enough too, Microsoft, one of his hated targeted companies belongs to the Copyright Alliance Organization, of which George is also a proud member and hypocritically uses this fact when dishing out one of his so-called 'official' emails.
The ironic twist to all this is that the bitter and resentful George P. Riddick, III should look no further for international infringement than within his own collection of shoddy and archaic bitmaps. I noticed one example of the United Nations flag here:
http://www.imageline2.com/pages/ipics2_MAPSFlags.htm
Now, even though such flags are ineligible for copyright they are still protected by 'Article 6' of the Paris Convention (Protection of State Emblems, and Names, Abbreviations and Emblems of International Intergovernmental Organizations).
I wonder if Mr Riddick therefore realizes that depicted images (including but not limited to photographs and two dimensional drawings) representing partly or in whole of the UN emblem, name and flag are STRICTLY PROHIBITED FOR DISTRIBUTED COMMERCIAL USE without going through proper channels of procedure and obtaining permission.
Mr Riddick claims to have never been accused of any violations within the last 25 years, well I have news, now you have. Yes George P. Riddick, III, you too are seriously infringing the industrial property rights of an international organization, how does it feel?
So Mr Riddick, before you continue your tiresome, pointless and self-indulging evangelistic campaign, maybe you should look nearer home, hold yourself accountable and add Imageline, Inc. to that All Company Listing you so condescendingly produce. And how about sending the United Nations a grovelling apology and one of those huge out-of-court settlement fees that you so enjoy collecting from everyone else.
And remember, an ignorant plea is never a defence in a court of law.