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Writers in film and TV are making less money. For 2009, TV writers brought in three percent less, while screenwriters’ earnings dropped 31%.

In a rough economy, it’s no surprise to find workers in all industries making less, but in the case of the writers, it feels a lot different on the ground. It’s not simply the economy.

Fundamental relationships and business practices are changing. More writers are competing for fewer jobs. Established quotes are being ignored. Mid-tier writers are passed over in favor of the very cheap or very expensive, and even they have a hard time actually getting paid.

Get a group of working — or should be working — screenwriters together for more than ten minutes, and you’re likely to discuss all these issues.

Last week, David A. Goodman (Family Guy), Kayla Alpert (Confessions of a Shopaholic) and I did a panel on KCRW’s The Business, discussing these topics. The show is now online, and worth a listen.

Some important points to emphasize:

• All writers in the industry are essentially freelance. Even being staffed on a TV show is seasonal. Writers aren’t “laid off;” they’re simply unhired. That’s true for many jobs in film and TV, from actors to gaffers to costume designers. Writers are pretty much the only craft that can generate their own work, however.

• Writing is the R&D of the entertainment industry. Try as they might, studios don’t know which projects — or even which genres — are going to be hits. That’s why they develop a range of properties, knowing that only a few of them will go into production. A studio that doesn’t develop material won’t have movies or shows for upcoming seasons.

• Studios are small parts of big corporations. While studios have often been owned by larger corporations, from Gulf+Western to Coca-Cola, the current consolidation and integration of the major studios is unprecedented. Film and TV used to be largely insulated for a downturn in the economy — people still wanted their movies and shows. But now that studios are so tightly entwined with their parent companies, corporate cutbacks hit Hollywood much more directly.

• Quotes are both real and imaginary. A writer’s quote is generally whatever she has recently been paid for a roughly equivalent job. ((Quotes work the same for actors and directors.)) If Sasha Dramaturg received $200K for a draft, set and polish ((“Draft, set and polish” is common shorthand for a writer’s first draft, a rewrite of that draft, and smaller polish on that draft.)) on a movie at Fox, her quote would be $200K. If Fox wanted to hire her to write a movie, her agents would be looking for at least that much money. Recently, however, quotes are sometimes being ignored. Fox might tell her agents that they’re paying $100K, take it or leave it. If Sasha takes it, her quote is now $100K. ((Deals can also be “no-quote,” meaning they’re not supposed to be disclosed. For the animated movies I’ve written, I’ve made significantly less than my quote.))

• Writers aren’t unique. While this panel was about writers, every facet of film and television is in upheaval. You can take any profession or craft, from development executive to stunt coordinator, and find uncertainty and anxiety about where this is all headed.

Host Kim Masters did a smart job stoking the conversation, and producer Darby Maloney cut an hour’s worth of material down with remarkable finesse.

One thing that didn’t make the cut was a list that a friend had sent me in anticipation of the panel. It’s more bloggy than radio anyway:

What’s Wrong With The Film Business

1. The conflict and turnover caused by the buying and selling of companies causes confusion, uncertainty, and weakens morale in the production area.

The “suits” who control the studios interfere too much with creative decisions; the studios should be run by creative people rather than businessmen, lawyers, etc.

The constant turnover of the production head of the studio is disastrous.

Overhead is indefensibly high.

Authority is not clearly defined.

Producers are given exorbitant contracts, and there is no relationship between what a producer receives and the box-office success of his or her films.

Screenplay costs are excessive and and the write-off on stories and contracts is enormous.

While this seems like a very current assessment, the list actually comes from a 1936 report by Joseph P. Kennedy, who was hired by Paramount’s board of directors to determine what was ailing the studio. ((This list comes courtesy Howard Suber, who makes reference of it in his book The Power of Film. It originally appeared in Leo Rosten’s 1941 book Hollywood: The Movie Colony/The Movie Makers (New York: Harcourt, Brace and Company, Inc., 1941), Pp. 253-254.
Rosten’s book is out of print, unfortunately.))

I find it strangely comforting to realize that the industry was just as broken 70 years ago.

To me, it suggests there’s a cycle to the industry. While we’re in a painful contraction phase now, there is still reason for optimism. Hollywood loves money, and money loves Hollywood. As the economy improves, I suspect we’ll see increased investment in the industry, either through new technology (as happened with home video) or new piles of money (such as foreign investment funds).

It’s a strange time for a writer to be starting in the industry. Not only will you be competing with every other aspiring writer, you’ll also find yourself up against established writers who’ve been forced to cut their quotes. With uncertainty comes caution, and studios will be less likely to take a chance on an unknown writer.

But crisis is also an opportunity. When I meet with recent film school graduates, I remind them that whatever happens next in the industry won’t be something my generation does. It will happen among the 20-somethings, the narrative entrepreneurs who figure out how to make the next great thing. Rather than seeking permission to work in the existing industry, they’ll make their own.

To become one of those inventors of industry, you need to surround yourself with similarly ambitious people. Film school is a good choice, but so is living and working in the right neighborhood in Silverlake or Brooklyn or Austin — or more likely, a place I wouldn’t even realize is a hotbed.

In the KCRW panel, Kayla Alpert made a final point worth repeating: writers can write. As frustrating a time as this is, screenwriters at every level have the unique opportunity to make something new by themselves. That’s a luxury worth more than dollars.