Around 12,000 film and television writers have gone on strike in the United States after the collapse of last-ditch contract negotiations.

Picket lines formed in New York and Los Angeles on Monday after the Writers Guild of America and the studios failed to reach an agreement on DVD and internet revenues.

US television audiences will be the first to feel the impact of the first industrial action in Hollywood for nearly 20 years.

Daily late-night talk shows such as The Tonight Show With Jay Leno and The Late Show With David Letterman, were expected to immediately begin showing re-runs.

The contract between the guild and the Alliance of Motion Picture and Television Producers, a body that represents 350 production companies and studios, expired on October 31.

The two sides met for nearly 11 hours on Sunday at the request of a federal mediator before East Coast members of the writers union announced on their website that the strike had begun.

Compensation package

The union says the overall compensation package it sought would cost $220 million over three years, a fraction of the $24.4 billion in revenues generated by US DVD sales and rentals last year alone, according to accounting firm PricewaterhouseCoopers.

"We say give us a percentage so if they make money, we make money" Jose Arroyo, screenwriter

"They claim that the new media is still too new to structure a model for compensation," Jose Arroyo, a writer for Late Night with Conan O'Brien, said.

"We say give us a percentage so if they make money, we make money."

The last major Hollywood strike in 1988 lasted for 22 weeks, delayed the start of the autumn TV season and cost the industry an estimated $500 million.
   
Jack Kyser, a Los Angeles economist, said a similar strike now could result in at least $1 billion in economic losses.

Production of prime-time comedies, such as the CBS hit Two and a Half Men, The Daily Show with Jon Stewart and Kelsey Grammer's new Fox sitcom Back to You, was expected to stop because they depend on a substantial amount of last-minute script rewrites.
   
However, the effect on movies will be less obvious since the major studios have many already produced or scripted.