Where’s the dialogue?

Universal Music Group made virtually its entire catalog available for free this week on Imeem, an online social network, in exchange for a cut of the company’s advertising revenue. It’s a risky bet, the kind of move that none of the major record companies were making even three years ago. But all the labels are making them now, in the hope that revenue from the Web and wireless networks will offset their sliding CD sales.

Meanwhile, in Hollywood, the studios and the writers union aren’t even talking about a deal. Until last week, the biggest stumbling block seemed to be the formula for paying writers when their works were used online. But negotiations broke down again on Friday after the studios objected to the writers’ demands on several old-school issues, including how the studios’ parent companies do their accounting and whether the Writers Guild should represent the scribes working in reality TV and cartoons.

It’s doubtful that any studio mogul would trade places with his or her counterpart at a major record company. While CD sales have plummeted, DVD sales have merely flattened, and the licensing fees for TV shows have continued to rise. But the Internet’s digital revolution is going to remake Hollywood’s business as surely as it has the music industry’s. And as the record companies learned the hard way, the longer it takes to adapt, the more painful the transition becomes. Music fans have shifted their entertainment dollars away from the major labels, and it’s not clear how the industry can win that money back.

That’s why the on-again, off-again pace of the studios’ talks with the writers union is so hard to understand. Yes, there are many issues to work through, although the central one remains how to compensate writers when their scripts are used on the Net. And no, there’s no easy answer for how to divide the online pot, especially when no one knows how to fill it. Successful online business models will emerge from the wreckage of many failures. Such experimentation requires flexibility and a willingness to adapt rather than a slavish adherence to past practice and decades-old formulas. Advertiser-supported ventures such as Imeem’s will probably be a key element, given the public’s reluctance to pay directly for content online. But the studios haven’t been announcing many Internet deals during the strike, in part because they don’t want to exacerbate their dispute with the writers.

Negotiators have twice left the bargaining table, and now the studios’ focus is shifting to the Directors Guild of America, whose contract expires in a little more than six months. Such a shift would only prolong the shutdown in scripted television and film production, whose effects reach further every week. The writers’ negotiators say every item is negotiable, and the studios should hold them to that. Most of all, the two sides need to keep talking.