As the Writer’s Guild strike continues, one of the issues which has been coming up ishow writers might get paid for content which is re-broadcast on the Internet. Apparently, writers are unhappy that they receive no residuals when shows are re-broadcast on the Internet.

Interestingly enough, the whole issue of clearances for new media is one of the biggest issues facing the studios in actually applying their content to the Internet. Even at the levels of residuals today, studios cannot pry their content out of the old media world and post anything online, without going through huge hoops and investing more money than they could hope to earn back to get their content onto the web.

I was discussing the difficulty of getting movies onto the Internet the other day with Derek Broes, Senior Vice President of Digital Entertainment at Paramount Pictures, and Derek described to me the great difficulty and time involved in clearing films for the Internet. For example, looking at Ferris Bueller’s Day Off, the popular 1980′s comedy film with Matthew Broderick, Broes told me that it would cost Paramount “millions” in order to clear just the music in that film for Internet broadcast — not to mention all of the other clearances required from the rest of the production. In many cases, it would cost the studio more than it took to produce the film in the first place — to clear a film to show on the Internet. Not to mention the legal hassles, lack of paperwork, and very strange geographic distribution rights requirements that Hollywood currently has with its film distributors (ie. say you figure out how to post your film online in the U.S., but legally you can’t let someone in Romania view it) which just can’t be addressed all that well without a lot of strange DRM twister.

The way much of how Hollywood content gets to the Internet (think ring tones, video clips, etc.) is through the also controversial use of promotional clauses–which allow studios to use that content without any payments or residuals to the artists.

It’s a digital dilemma for Hollywood. The whole system is built on such an antiquated system of physical distribution, that there’s almost no hope of “adapting” the current system to the new world of the Internet. The fact that the studios can’t pay a few more cents for residuals to writers for Internet streaming is but a small part of the huge issue the industry faces. It’s almost easier to start from zero than it is to try to unravel the old media habits and traditions in this new world.

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Hollywood by Benjamin Kuo