Alternative media sees silver lining from strike
NEW YORK (Reuters) - The Hollywood screenwriters' strike is an opportunity for alternative media companies, from DVD renters to cable television and the Web, to reach new audiences, according to entertainment industry executives.
"To the extent that people aren't watching the (television) networks, that's an interesting opportunity," said Peter Levinsohn, president of News Corp's Fox Interactive Media, home to the wildly popular MySpace online social network.
The three-week-old strike by the 12,000-member Writers Guild of America has sent late-night talk shows into reruns and halted work on dozens of prime-time comedies and dramas and several film projects.
Many networks had stockpiled episodes in anticipation of a strike, but it is widely expected they will need to resort to reruns, news or reality programming if the strike runs into January.
Purveyors of nonfiction content, like the Discovery network, which does not rely on writers for its programming, said they thought the strike had boosted viewership.
"I think it's helped," Discovery Communications Chief Executive David Zaslav told the Reuters Media Summit in New York on Wednesday.
"We've just had fantastic numbers, and ratings are growing across the board," said Zaslav, whose company is owned in part by Discovery Holding Co.
"When the broadcast networks are doing high (amounts of) original premiers, cable suffers," he said. But the inverse is also true, with cable generally benefiting in times such as the summer season, when networks tend not to feature first-run original programming, he said.
"If, in fact, the quality of the programming erodes, so might your audience," said David Sanderson, head of the Media and Entertainment practice of management consulting firm Bain & Co.
The writers resumed contract talks with major film and TV studios this week, but progress was unclear.
The dispute has centered on compensation for film and TV writers for work distributed via the Internet. The last major Hollywood strike, a 1988 walkout by writers, lasted 22 weeks and cost the entertainment industry at least $500 million. Economists see the current work stoppage as potentially more expensive.
Goldman Sachs analyst Anthony Noto told the Reuters summit that big media companies could save on production costs in the short term but could be hurt if the strike drags on.
"The strike is an incremental headwind ... if they can't find a resolution in the first quarter," he said.
In the meantime, media executives from competing industries cited benefits for themselves.
James Keyes, chief executive of Blockbuster Inc, said the strike will send customers to his company's video rental stores.
"With the writers' strike, we have people seeking alternative forms of entertainment," Keyes told Reuters.
Executives in the business of professional sports, another popular form of unscripted television entertainment, also saw a benefit.
"We are more valuable when there's a strike," said Brian France, chairman of the auto racing organization NASCAR. "Call us reality TV. Most sports are fact-based, and they (networks) are happy when they have the sports content."
Gary Bettman, commissioner of the National Hockey League, said the longer the strike, the better for all sports, which already have an advantage over regularly scheduled programming, since consumers are not apt to record sporting events to watch at a later time.
"People want live," he said.
(Editing by John Wallace)
