AFI BLOG: Media and Technology

Forbes

Hollywood is once again on the brink of war. This time the big movie studios and TV networks are skirmishing with their actors, whose union contracts expire next month. Unless both sides can agree on how to split future Internet revenues, the industry faces the terrifying prospect of its second prolonged talent strike of the year. Peter Chernin vows it won’t happen. The News Corp. president watched in horror as the recent writers’ strike paralyzed Hollywood over the very same online royalty issues, draining $2.5 billion from the industry and filling the country’s TV screens with reruns.

As that strike dragged into February, Chernin took action. One morning he and Disney Chief Robert Iger showed up at the negotiations at L.A.’s secluded Luxe Hotel bearing a crucial concession: The studios would give writers a cut of any money they took in streaming movies and television shows on the Internet. It was a line the studios had previously refused to cross. Chernin was willing to tiptoe over it. The writers would get a modest percentage of the studios’ gross in the third year of a three-year deal. By the time he walked out of the hotel that night the strike was over.

The Chernin compromise met his main goal: leaving News Corp. free to try out radically different ways of selling TV shows and movies online without being blocked by Writers Guild rules. He hopes to strike a similar deal with the actors. “I think there’s a potential to impede moving content online, and I will not allow that to happen,” he says flatly.

By many measures Peter Chernin is Hollywood’s most powerful man. He runs the most-watched TV network, the largest movie studio (based on year-to-date box office sales), a clutch of cable channels and an expanding array of Internet sites. Thanks to his reputation as a straight shooter in an industry famous for duplicity, Chernin has also become a leader in keeping the peace with Hollywood’s stars.

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