An End To The Billion Dollar Strike?

Finally, in the third month of a bitter strike by TV and screen writers, there's something in the air.

"I think that there's a cautious optimism out there right now," one writer told CBS News correspondent Sandra Hughes. "The general mood is pretty hopeful," said another.

The Writers Guild and the studios have started talking again, the ice broken after the Directors Guild reached a deal first.

The big issue, how much directors, actors, and writers earn when their work is downloaded from the internet.

At the Sundance Film Festival in Utah, industry observers say time is running out, because the actor's contract is expiring soon. And if they strike, too?

"That would really bring the industry into a state of full-on civil war, entertainment attorney Jonathan Handel tells CBS News, "if the strike doesn't settle by the Oscars, we're facing a potential nightmare scenario."

So the pressure to settle is huge, the writer's strike already costing Hollywood more than a billion dollars.

High-profile movies, like the daVinci code sequel, have shut down.

Except for the few shows with fresh episodes like "Lost", TV is running on re-runs and reality ... as studios watch audiences slowly switching to computers, maybe forever.

The pressure is on writers, too, from colleagues who want their union to accept the directors' deal as is and others who want their union to hang tough for more.

There has been softening on both sides. The writers have given up demanding jurisdiction over reality shows and animation. The studios, in talks with directors, gave in on new media, doubling the fee when movies and shows are bought online - a good sign to many writers.

"I think this is the time when the deal will be made," said Matt Weiner, executive producer of the drama "Mad Men". "I think everyone feels that."

And like writers do, he's plotting the pathos of the picket-line.

"A lot of the emotional experience of the strike," said Weiner, "both the powerlessness and the power and unity and feeling part of things with other writers, because we're very isolated a lot of the time, it's been amazing."

All in all, it sounds like a screen play in the making.