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Guilds to Negotiate for Bigger Slice of DVD

15 Apr, 2003 By: Joan Villa

As DVD grows into a bigger portion of the home entertainment pie, it has also caught the eye of the Hollywood guilds that will represent writers, actors, directors and other television and film professionals in upcoming contract negotiations. DVD is “exceptionally important,” in the words of one union president, as talking points are defined and presented in coming months. The Writers Guild of America (WGA), which will be the first to enter contract discussions and often sets the tone and issues for the other guilds, has already identified DVD as one of five or six top concerns it will bring to the table.“The writers feel their percentage of revenue is not in concert with what it ought to be, considering the price of making the DVD and the huge explosion in the marketplace,” said Victoria Riskin, WGA West president.Typically, talks center on the percentages that writers, directors and performers get when their films and television shows appear in syndicated markets, overseas venues, pay cable and home video. But this time around, the unions will also seek to reduce a sizeable manufacturing allowance that was based on the old costs of reproducing VHS, which is subtracted before calculating residuals. “The issue for writers is that a DVD is pretty inexpensive to make, especially when compared to videocassettes, so the cost of manufacturing is a fraction of what it is to manufacture a videotape,” she said.That concern will also be front-and-center for the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA), who jointly negotiate beginning about a year in advance of contracts expiring June 30, 2004, according to AFTRA president John Connolly.“DVDs are much, much cheaper in every way to manufacture and distribute, not the least of which is when you're shipping a million units you can ship in much smaller containers than VHS, so one of the arguments we will make will need to address that distribution/manufacturing deduction,” he said.The current formula allows an 80 percent deduction on gross video sales, and then the remaining 20 percent is used to calculate guild residuals of 1.5 percent of the first million dollars and 1.8 percent after that, according to WGA West assistant executive director Charles Slocum, who will have a hand in negotiating the new contract. SAG receives three times those residuals because their payments must be divided among several eligible actors, he said. “In the last negotiations, our rallying cry was ‘Just a penny per DVD,’ Slocum said. This year, he added, they'll again be asking for a penny more. These residual payments are “a very small piece” of the overall revenue stream but crucial to writers who may be credited on one or two scripts over an entire career, Riskin said. In the current contract expiring in May 2004, writers also garnered a one-time $5,000 publishing fee for including their screenplay in a DVD and won new guidelines for bigger roles in the creative process and within DVD bonus features.“The question is, could the industry absorb another five or six cents they might have to pay the entire creative community [per DVD], and I think the answer is unequivocally yes,” she added.For actors, Connolly said DVD residuals can be “substantial,” citing one recent instance where the DVD payout doubled an initial $20,000 fee for a mid-level actor in a low-budget genre film. For AFTRA, residuals help defray expenses that professional actors incur while out of work, he said. Plus, the ancillary market payouts are also for the first time impacting TV actors whose shows, like “The Sopranos,” are huge sellers on DVD.So far, no unions have balked at the additional work required of their members to create special DVD features, he said, and most enjoy the opportunity to talk about their craft in making-of featurettes that tend to be filmed unobtrusively while on-set.“I've heard of some abuses where people have been asked to come in on days that are not regular work days to read whole special scripts, and do extra work and that's not going to fly,” Connolly said. “But the bottom line is it's in all of our interests to make a final package to go to consumers that's as appealing as possible.”

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