With Hollywood bracing for a season of possible labor strife, screenwriters and studio executives on Monday opened contract talks expected to hinge in part on how the Internet has altered show business.

The two sides spent the first day exchanging proposals for a three-year pact covering 12,000 members of the Writers Guild of America, whose agreement expires on October 31.

The talks were adjourned about eight hours after they began, with negotiators agreeing to return to the bargaining table on Wednesday, union and industry representatives said.

Comments from both sides indicated they remain far apart.

The studios and television networks, represented by the Alliance of Motion Picture and Television Producers, issued a statement saying the writers' demands would impose unreasonable costs and draconian restrictions.

The guild, whose negotiators include Desperate Housewives creator Marc Cherry and Dreamgirls writer-director Bill Condon, responded by saying the companies always try to paint us as unreasonable and bellicose.

Our proposals simply try to ensure that writers keep up with the industry's growth. That's fair and reasonable, the WGA said.

The biggest differences center on proposals to revamp the decades-old system by which TV and film writers are paid extra when their work goes beyond an initial broadcast or theatrical release and into reruns, DVDs, the Internet or other outlets.

With union and management sharply divided on key issues, strike concerns have been running high in Hollywood, prompting studios and TV networks to stockpile scripts and accelerate production on some projects as a precaution.

The outcome of the talks go beyond whatever deal the writers gain, setting the stage for subsequent labor negotiations for actors and directors, whose separate contracts run out next summer.

COSTLY DELAY IN 1988

Hollywood screenwriters last walked off the job in 1988. That 22-day strike delayed the fall TV season and cost the industry a reported $500 million.

As in the past, the writers have made a top priority of seeking increases in residuals -- bonus payments they earn as movies and TV shows enter secondary markets like cable TV reruns.

This year, the guild is pushing hard to expand residuals for TV and film content that is reused on the Internet and other digital media platforms, like cell phones and iPods.

Industry executives insist that wireless and Web-based entertainment still consist largely of experimental ventures whose business models are unproven.

The producers also argue that the old system of calculating residuals of all types as a percentage of gross revenues is outdated in the fast-changing, fragmented world of the Internet and other new media.

They want a new system that withholds residual payments to writers and other creative talent until studios recoup costs for development, production, distribution and marketing.

Payments of residuals to screenwriters total more than $100 million a year, according to industry figures. The union says such payments account for as much as half the income earned by the middle-class writers, the bulk of the WGA's membership.

Rather than trying to negotiate new Internet compensation and residual formulas now, the producers have suggested the two sides study those issues and return them to the bargaining table in three years. Union leaders have rebuffed the idea of a study as a stalling tactic.

Intellectual property law