Will Hollywood writers strike? Labor drama unfolds.

As the deadline for a new contract nears, writers and producers are negotiating, but some are braced for the worst.

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Reporter Gloria Goodale describes the environment in Hollywood as a potential writer's strike looms.

Hollywood writers generally know where a story is headed when they sit down to write scripts for TV shows and movies. But the final act is up in the air as the entertainment industry braces for a possible strike by the Writers Guild of America (WGA), which would be the first in nearly two decades.

If writers were to strike after the Oct. 31 deadline for a new contract, viewers could see the impact on their TV screens by Christmas or even a little sooner – in the form of a greater offering of unscripted reality shows, reruns, and specials. After that, selection at the local cineplex would be affected, as studios dole out lower-quality movies they already own but that have been sitting on the shelf.

Negotiations between TV writers and the Alliance of Motion Picture and Television Producers (AMPTP) have languished since July, and the WGA is expected on Friday to announce that its members have voted to authorize a strike, if it comes to that.

For both sides, the deal-breaker question is how to allocate profits from new media – work disseminated on everything from the Internet to cellphones to iPods.

"The source of our difficulties lies with the rapid technological and commercial changes that have been occurring within this industry," said Carol Lombardini, AMPTP executive vice president of business and legal affairs, in a statement.

AMPTP has called for a revamp of the decades-old system of so-called residuals, the fees paid to writers, actors, and other talent when a show is reused.

Producers have argued that they should pay out residuals only after they have recouped their investments in a TV show or a movie, which has become harder to do now that the audience is more fragmented thanks to competition from cable, satellite TV, webcasting, and other viewing options. They dropped that "recoupment" provision in a surprise move Tuesday, but they continue to emphasize their unwillingness to expand residual payments to cover the digital world of DVDs as well as TV shows and movies online, as the WGA has demanded.

Meanwhile, the WGA is drawing its line in the sand. "What this [strike authorization vote] means is that the guild is in fact serious about our proposals, is willing to go to the table to negotiate a deal, and is not going to back down," says Gregg Mitchell, spokesman for WGA West. A vote to authorize a strike does not necessarily mean the WGA will strike, but it signals that the members will back the union leadership if it deems a strike is necessary, says Mr. Mitchell.

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