I cut startups a lot of slack. Innovation and entrepreneurship rely on some suspension of disbelief: we’ll be able to make this product, on this schedule, at this price. Google was once a pipe dream, as were Twitter and Facebook. Dream big, I say.

But since I was name-checked twice in this interview from Wharton School of Business, I feel some responsibility to point out a few fallacies and follies.

When the Writers Guild of America went on strike in 2007, it looked as if Hollywood’s balance of power favoring big, money-hungry studios would never be the same again. To some extent, that’s the case, but not necessarily in the way the striking screenwriters expected. The growing popularity of free, web-based writing software — available to anyone, anywhere — is breaking down the barriers to entry of the screenwriting profession as never before, says Sunil Rajaraman, co-founder, president and CEO of Scripped.com. As he tells it, the urgent mission for his California-based screenwriting software startup couldn’t be clearer, yet more daunting: Change Hollywood.

I met with Sunil and his partner Zak Freer (a Starkie) in 2007 when they were coming up with their concept for Scripped. I gave them a few suggestions and wished them luck.

In particular, I hoped they could fulfill the international aspect to their mission:

We combine cloud computing and web-based software to provide free access to Scripped.com to aspiring writers worldwide, to find the next John August. He or she might be in Thailand, China or India — not necessarily in Los Angeles, which is the way the film industry has traditionally thought about sourcing this kind of talent.

Their site is up and running. I haven’t really checked in with it for the past two years. But it annoys me to see Rajaraman recycle this Hollywood urban legend as proof his software is needed.

Two problems are solved with web-based screenwriting software. The first is collaboration. Many of the scripts of the films we see in movie theaters have undergone dozens of rewrites before they make it to the screen. For example, for the original of Good Will Hunting, Matt Damon and Ben Affleck put the screenplay together with more anecdotal stories about South Boston and friends they grew up with. Characters were eliminated from the screenplay and it underwent a very detailed rewriting process. Who knows how many writers had their hands on that screenplay before it was made — and it eventually won an Oscar.

So, wait: does the untrue story about rewriters on Good Will Hunting mean your collaboration software is good thing, or a bad thing? Rajaraman is taking one of the few actual advantages of of web-based screenwriting software — real-time multiple users on an open document — and making it sound unsavory.

The second problem online software solves is access to writers. If you give the software away for free — it is very cheap to provide the software — you can attract all sorts of talent that would have otherwise not been interested in screenwriting.

There are many free or low-cost options for screenwriting software, including the basic word processors everyone already has on their computers. I wrote Go in Microsoft Word. Screenwriting software is useful, but hardly necessary.

For that matter, both of the flagship applications cost less than $200. When the price of an iPod will buy you all the software you need, that’s a very low barrier to entry.

The Writers Guild West consists of about 15,000 writers, a very small group. The average price in Hollywood for a feature-length script from an accomplished writer is US$250,000. These writers have to protect the system, and the system exists to provide for them. Because Scripped aggregates talent worldwide and brings new content to producers, it is a threat to the way business is currently done.

WGAw membership is closer to 8,000. I don’t know where Rajaraman is pulling the $250,000 figure, but he’s committing the classic mistake of confusing a script sale with a career. In 2007, median earnings for a WGA writer were $104,857.

Hollywood pays roughly US$1.2 billion a year for feature-length scripts. So point one, producers are not necessarily getting the most talented writers to write those scripts. And, two, they are overpaying for those scripts. We aim to democratize the process, cut the cost and increase the talent pool of writers who have access to the Hollywood studio system and elsewhere.

I emailed Rajaraman to ask about the $1.2 billion, but I think he’s off by at least a zero.1 Regardless, I can’t fathom how that proves producers are overpaying for less-talented writers.

I don’t know that there’s a viable business model for Scripped. I still wish them luck; I’m not rooting against them by any means. But they do themselves a disservice by misrepresenting the facts behind the motion picture industry and the career of screenwriting.

Through my work with the Sundance Screenwriting Labs, I’ve experienced that the best way to extend the craft of screenwriting to other countries is through example and outreach. The Labs does it with in-country sister programs. I do it with this site, trying to make sure my articles acknowledge the wider world beyond the 30-mile zone.

But I’m also very leery of trying to promote screenwriting as a career separate from the greater film industry. The reason most screenwriters live in Los Angeles is because this is where Hollywood movies are developed, financed and produced. Software doesn’t change that.

  1. Update: Rajaraman says he’s basing that on $30 billion in worldwide film production costs, with 3% to 5% going to the writer. He will try to get the article updated. It still doesn’t help make his point.