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FROM THIS EPISODE

I'm Matt Holzman with The Business Brief, a guide to what's happening in and around the business.

Last week, I made the modest proposal that it was time for the Screen Actors Guild to accept the producers “last, best offer” and move on. This was no commentary on whether SAG's demands are right or wrong -- frankly I think they're right -- but on the hopelessness of their bargaining position.

This week, we've seen another reason why it's time for SAG to call it a day. The call for a strike-authorization vote has caused a major rift within the union, much to the continued delight of their true adversaries, the studio chiefs.

Still, I can understand why the union continues to take its hard-line stance even in the face of unpleasant facts. What is at stake is not a few dollars for digital media, but the future of the Hollywood middle class. It's unfortunate that the guilds that went to the table before SAG didn't understand as much.

Back in the days of the studio system, you could have an actual job in show business. Make-up people and technicians of all kinds would go to the studio every day and work on whatever movie was in production. They would work relatively predictable hours, then go home to their house and their family at the end of the day. Even contract writers, actors and directors had steady employment and steady incomes.

In 1948, a federal anti-trust suit known as the Paramount Case would signal the beginning of the end of the studio system. The result would eventually be the divorce of the studios and the exhibitors, and by 1960, the studio system was pretty much a thing of the past. Most production people became carnies of a sort, working when and where they could on a contract basis.

In the intervening years, the nature of the middle class in America has changed across the board. Costs have gone up and wages have stayed pretty much the same. In the catch-as-catch-can world of Hollywood production, that means more and more working-class people have had to turn to other kinds of work outside of Hollywood to stay above water.

What has made things even worse in Hollywood is that above the line players now eat up a huge chunk of a film's budget and often take the first bite of profits. The exhibitor takes their sizeable share and the glut of films have caused marketing costs to skyrocket. In the end, the studio is left with an unacceptable return on their investment. So like hell if they're going to give any more money to anyone they don't absolutely have to.

Ironically, there's a new trend away from using stars to open movies. The relatively starless, relatively cheap $40 million vampire picture Twilight is on track to make a huge amount of money.

But do not expect the studios to pass their increased profits onto the people at the bottom of the show-business pay-pyramid. The guilds will have to continue to fight to make sure that working-class people above and below the line will be able to earn a living wage. But SAG should start that fight by stopping the fight inside the union, and signing the studios' offer. I say run away to fight another day, but make sure that all of Hollywood's unions are on the same page when you do.

I'd love to know what you think. Send me an e-mail at TheBusiness@KCRW.org. You can download a podcast of this commentary, share it with a friend, or embed it on your blog with the click of a button from our new media player at KCRW.com/TheBusinessBrief. For KCRW, I'm Matt Holzman.

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