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New Media Money Stumbling Block for Actors The fight over the payment of residuals to actors and other key creative personnel on projects distributed through "new media" (including internet, wireless, cell phone and ipod distribution and new areas such as mobisodes and podcasts) rages on. As I pen this article, Hollywood Studios have rejected a recent tentative settlement to the actors' strike in Eastern Canada, between the CFTPA (the English Canadian producers), the APFTQ (the Quebec independent producers association) and ACTRA, particularly because the settlement included a resolution of issues surrounding new media residuals. While it was hoped that any agreement reached there would form the basis of an agreement with the Screen Actors Guild and other unions such as the Director's Guild (DGA) and the Writer's Guild (WGA), it appears that Hollywood is not willing to give up much ground just yet, particularly with respect to distribution over the Internet. While the average consumer seems very excited by the possibilities presented by these new forms of distribution (did anyone else notice how fast iTunes and now YouTube have become an indispensable part of our cultural fabric?) it appears that the industry is engaged in a closed door-cage match to determine how to divide this potentially explosive revenue stream. Certainly some of the conflict relates to the tensions that naturally exist between the realities of the highly unionized film and television industries and our prevailing notions of how to run an Internet business. The latter can best be described as "suck them in with free services for at least as long as it takes till they're totally addicted and then start making them pay with monthly automatic credit card charges." And while Hollywood and the producer's associations have long argued that "no one is making a cent on the Internet," Apple's deployment of the iTunes platform and their resultant enormous profitability from and domination of the music industry, have effectively debunked that idea and put Hollywood on notice that similar results are possible in the video media industry. It is important to remember that while there are no provisions in the collective agreements which directly address the question of residuals and new media, one can certainly argue that, given a broad enough interpretation, the existing categories could "catch" some of these newer forms of distribution. For example, when considering the various Netflix services under the existing British Columbia actors' (UBCP) contract, one can argue that the provision of that service falls either within the definition of compact devices (which include the more traditional renting of video media through video stores) or even possibly within the provision of pay-tv distribution and as such are included in the normal residual pre-payment procedures of the UBCP collective agreement. In addition, C102 of the current UBCP agreement provides that where the producer wishes to exploit a form of distribution not mentioned in the agreement, the producer may do so by paying the union 3.6% of Distributors Gross Revenues (interestingly, the same amount which was used in the Hollywood disrupted settlement to the ACTRA strike) until the union and the producer have negotiated a mutually acceptable term to apply to such use. What
can we expect for the future? Much will depend on the position that
Hollywood takes when it begins negotiations with SAG. It now seems
clear that Hollywood did not want any agreement with ACTRA on new
media rights that would force their hand and raise the bar in advance
of those negotiations. And while UBCP and the BC film industry have
managed to avoid (and to an extent, benefit from) this conflict
so far, it is safe to assume that Hollywood's presence at the bargaining
table will have a major impact on the upcoming UBCP negotiations.
Stay tuned for further developments as this area promises to be
an exciting battle ground over the next few years.
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