Writers' strike deal could come within week

File photo shows members of the Writers Guild of America carrying picket signs as the strike against television and film producers continues, at an entrance to the NBC television network studios in Burbank, California January 8, 2008. The striking writers have made a key breakthrough in contract talks with film and television producers, leading to what could be a deal between the two parties by the end of next week, The New York Times reported on Saturday.

LOS ANGELES (Reuters) - Hollywood's striking writers have made a key breakthrough in contract talks with film and television producers, leading to what could be a deal between the two parties by the end of next week, The New York Times reported on Saturday.

Negotiators in the bitter labour dispute reached an understanding late on Friday on how to deal with payments writers would receive when their work was streamed over the Internet, the newspaper reported, citing unnamed sources.

The report is the second sign of progress in one week in the screenwriters' strike that began on November 5 and has crippled Hollywood with TV production shutdowns and layoffs. It also has threatened to dim the lights on the Oscars on February 24.

Earlier this week, the Los Angeles Times said progress had been made in the round of "informal talks" that began on January 23.

A spokesman for the Writers Guild of America, which has some 10,500 striking members, was not immediately available to comment. An official for the Alliance of Motion Picture and Television Producers, or AMPTP, which represents film and TV studios, declined comment, citing their media blackout.

The informal talks began as a way to set out a framework for more formal talks at a later date. The New York Times said formalizing the talks may not be necessary as the parties could reach a deal and go straight to their governing boards.

Any contract agreement would require ratification by the union's rank-and-file members.

Screenwriters walked off the job four days after their old contract expired in a dispute that hinges on how much writers should earn for work distributed over the Internet.

The key provision settled on Friday, according to the New York Times, was what to do about streaming content. The paper said the AMPTP members wanted to pay a flat fee of $1,200 (600 pounds) for one year of streaming, as in the directors' contract.

Writers wanted 1.2 percent of the distributor's total streaming revenue. How that issue was resolved was not exactly clear, said the newspaper.

Any breakthrough would calm the worried U.S. media industry. The Los Angeles Economic Development Corp has estimated the strike cost the region's film and TV industry at least $650 million in wages, with over $1 billion more in lost earnings attributed to a ripple effect on the local economy.

Striking writers have threatened to picket the Oscars, tarnishing the world's top film awards, although organizers have vowed to let the show go on.

(Reporting by Bob Tourtellotte; Editing by Peter Cooney)