October 26, 2007
This is a complex business and one that faces significant technological change. But it is also simple: it is a business where everything depends upon quality content being distributed across multiple platforms. In conversations over the past year, three top executives of your companies made that exact statement to me. Everything depends upon quality content.
In the process of content creation, writers are fundamental creators. Compelling, exciting, humorous stories are the linchpin of the industry's success. Writers create the basic material that drives your success.
For this reason, the relationship between creative talent and the industry is also fundamental. You can't generate quality content without us and we cannot bring that content to the world without you. This relationship is one of the great strategic advantages that you possess in a global market.
We could argue at length about the economics and prospects of the business. And we have. But I want you to know that our view in this regard is essentially unchanged: despite inevitable challenges, your companies are highly successful. Box office, ad revenue, foreign and ancillary markets all continue to grow and prosper. All of the projections that we've analyzed, including those from industry veterans Adams, Price Waterhouse, Veronis Suhler and E Marketer, as well as your own SEC filings, predict that digital distribution will spur additional solid growth in the coming years.
For a few decades now there has been a growing feeling among writers that they are slowly being left behind. Every new technology or genre, instead of being treated as a new opportunity for mutual growth and benefit, is presented to us as some unfathomable obstacle that requires flexibility from writers--meaning a cheap deal that remains in place. This happened with home video. It happened with basic cable. It has happened with Reality TV. Now you want it to happen with new media and the Internet.
We have to find a way in this negotiation to deal with all of these issues in a manner that is fair to writers and fair to the industry. We want to do that. That is why we are here.
Whether or not that will be possible remains to be seen. We are well aware that negotiations are about power and the ability to exercise it. We're prepared to do that.
But negotiations are also about the willingness to explore compromises and we are prepared to do that, too. It is in this spirit, and with the objective of finding common ground by October 31, that we have prepared the material that we will share with you now.