Company Town : Writers Guild West Opens Up to Authors of Interactive Media : Labor: Historic move underscores the union’s commitment to seeking new creative outlets for its members.

In a break with tradition that may clear the way for teen-age computer hackers to join the ranks of Hollywood’s elite screenwriters, the Writers Guild of America West has opened its doors to writer-designers of interactive multimedia computer games.

Last week, the Santa Barbara-based husband-and-wife team of Tony and Meryl Perutz, who wrote Electronic Arts’ new “Around the World in Eighty Days,” and Michele Em of Sierra Madre, author of the best-selling “Return to Zork,” became the first writers to gain admission to the guild solely for scripting CD-ROM software titles under its newly devised interactive contract.

Previously, to become a member, a writer had to work for a TV or movie company that had signed the guild’s 400-page collective bargaining agreement regulating compensation, terms of employment and revenues from such markets as home video, foreign TV and merchandising.

“It’s been an incredible experience, learning to write non-linear stories,” says Tony Perutz, a former program executive who helped devise Warner Communications Inc.’s first interactive TV experiment in the mid-1970s. “It’s exciting to see that this new field has been accepted by the creative community,” added Meryl Perutz.

The historic move--prompted by the staggering profit potential of the in-home electronic games industry--underscores the WGAW’s commitment to developing ties with Silicon Valley, and its intent to exploit the coming age of interactive media on behalf of its 7,600 members.

“Our studies indicate that, at any one point in time, over half of our members are not working, so we see this as a great source of employment and new creative and business opportunities,” says Joel Block, the guild’s director of industry alliances.

The Directors Guild of America, the Screen Actors Guild and the American Federation of Television and Radio Actors have similar agendas, and all three report that a growing number of software publishers are starting to hire their members.

With CD-ROM technology now within the economic reach of a growing number of consumers, retail sales of CD-ROM software are expected to hit $2.1 billion this year, up 40% from $1.5 billion in 1993. Conservative estimates see annual retail sales of $15 billion five years from now.

In addition to lobbying software publishers to hire guild writers, the WGAW is educating its members in interactive technologies. It has also become a fixture at digital trade shows and produces an interactive multimedia writers directory.

But, most significantly, while business parameters for the software industry are still being drawn, the guild has replaced its massive collective bargaining agreement with a flexible, one-page interactive media contract. The new pact allows the parties to freely negotiate terms of compensation--requiring only that software publishers contribute a total of 12.5% of a writer’s total compensation to the guild’s pension and health funds.

However, when the “get acquainted” honeymoon is over, a heated debate may emerge over gross royalties.

Lee Isgur, a media analyst and managing director at Jefferies & Co., says that Acclaim Entertainment’s “Mortal Kombat II,” shipped last week, will probably sell 4 million to 10 million units worldwide over the next 12 months at an average wholesale price of $40. “So we’re talking about $160 million to $400 million,” he says. “Everyone wants a piece of that action, and that’s what they’ll be fighting for.”

While few precedents exist for compensating writers of interactive media--fees can range from $25,000 to $100,000 for a 500-page script or “design document”--guild negotiators suggest the precedent for royalty payments already exists in the software industry.

“There is a tradition of rewarding authors of software with gross-based royalty compensation packages, and we believe the writer should share in the success of the product,” said Block of the WGAW. “This shouldn’t have to be fought over every deal--it should be cemented into the business practices of the industry.”

However, media analyst Isgur calls that notion “ludicrous.” “It’s like saying, ‘If I buy a Bill Blass suit, every time I wear it, I should pay a rental fee,’ ” he says.

About 20 companies, including Knowledge Adventure, Philips Interactive Media of America and Interfilm Technologies, have used the interactive agreement to hire guild writers. So far, the outlook seems positive.

“On ‘Wing Commander III,’ our in-house multimedia writers turned out a script that wasn’t good enough, so we went with two guild writers--Terry Borst and Frank de Palma,” says Bing Gordon, executive vice president at Electronic Arts Studios. “The result was we started with a script that nobody liked and ended up with a script that everybody liked.”

Not everyone has embraced new media.

“A lot of our writers--particularly those with experience--are resisting the whole idea of interactive storytelling,” said former WGAW President Del Reisman. “What they’re saying is: ‘We don’t want you at home to have choices about the ending or anything else. We’re the writers and we prefer to tell the stories.’ ”