The Writers' Union Is RIGHT (Socialists Rejoice)

[ConstantineX]

In typical union battles, no matter how sympathetic we are to the strikers, we usually see that most of the value creation comes from the corporate suits, "the Man". The reasons cars are so cheap comes mainly from the economies of scale and automation that Henry Ford first introduced; in short, industrialization. There is no special difference between individual line workers, and in the most lubricated economy in reality they might all have been replaced by now.

At first this does not square with our usual powerful image of the unions in the '50s, '60s, '70s. The reasons unions were powerful in the auto industry back then, according to some hypotheses I've read, is mainly because the auto industry was a growth industry back then. Typically, in growth industries, you're trying to expand market share rather than margins (your margins are pretty damn fat already). The beginning of globalization and the availability of cheap oil meant the Big 3 focused on shipping more and more cars, rather than focusing on expenses. Now with the near saturation of the developed world's market with steadily increasing oil prices the auto industry has become mature. They can no longer blithely sign unreasonable contracts and carefully monitor and control and cut their expenses, which unfortunately include labor and health costs (and no one could have forseen the amazing growth in health costs).

It's quite different in the realm of intellectual property. There are substantial differences between the most valuable writers and actors for example, enough to put really high premiums for the absolute best. The best actors I believe in Hollywood are not just paid a straight salary, like plebes, but get a percentage of the equity, like capitalists. I think some of CharlieDontSurf's posts have highlighted that for some projects, studios will only work with certain writers and the best individuals wield a great amount of power in the Hollywood scene. Personally, shows like The Office reinforce to me that good writing makes and breaks a good (and therefore profitable) show.

The thing about the computer, and digital revolution in general, is that it's made one of the core benefits of "traditional industry" virtually costless: that is, it has made mass distribution and promotion very very cheap. Actually this reduces the overall costs of the good in question as well; for example, I believe that music is going to become virtually free. The difference between the two markets is the percentage share of value that "labor" contributes.

The corporates might have well chosen the worst time to challenge the writers. For the first time TV viewership as as a percentage of media consumption is down (not exactly the myth of the lazy American huh?). People are more systematically consuming their favorite shows in dainty portions rather than unwholesome chunks. More and more media is going to be distributed digitally, and rather paying the mere pittance (I think) the writers are paying for, the studios are going to accelerate the writers' departure towards a medium where they can wrest a greater share of the profits. I predict, for example, more and more instead of a studio financing a film or project, individual, powerful writers are going to be individually financed by project. Viral marketing and the ability to "sell" your good to more people (all through advertising) through the nature of Internet is just going to increase the value proposition writers see in the "New Media" versus the "Old Media".

So, socialists, revolutionaries, brothers, rejoice! The labels will die. The studios will die. The corporates are going to lose this battle, and many others in the future very badly.

Cliff Notes: In the show-down between bad guys vs. good guys, the suits vs. the shirts, the good guys are going to win.

PS - This is a similar situation: if technology ever invents some sort of car replicator, where you can own designs, expect the Big 3 with alot less business and the car designers to get a larger cut of the income.