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Update: DVD Residuals Issue Not Being Abandoned by SAG

13 Oct, 2004 By: Holly J. Wagner

While the Writers Guild of America (WGA) appears to have thrown in the towel on DVD residuals for the near future, the Screen Actors Guild (SAG) is holding fast to its vow to pursue the issue.

“In recent years, we've watched downstream markets explode for employers,” SAG president Melissa Gilbert said in the October issue of the guild's Screen Actor magazine. “The residual structure isn't as fair as it should be when it comes to the ones who make TV and movies magical — actors.”

The article, outlining key elements of negotiations, refers to “the DVD juggernaut which has produced a world where Finding Nemo sells 8 million units in one day, and TV shows like “Sex and the City “and “Seinfeld” are released on DVD and generate huge revenue for a studio.” The guild wants to “adjust the antiquated formula used for calculating video residuals as was crafted when the market was in its infancy, and long before DVD. And, finally, the guild wants to address the appropriate residuals formula for so-called video-on-demand — including film and television programs downloaded from the Internet.”

The WGA opted instead to focus on health-care support in its stalled negotiations.

The guild suspended negotiations with the Alliance of Motion Picture and Television Producers (AMPTP) in June, in the hope the Directors Guild of America (DGA) would win concessions and pave the way for the other guilds.

The DGA negotiated its new contract with substantial gains in support for health benefits, but chose not to fight for changes to DVD residuals. A letter from DGA president Michael Apted noted that video has generated so much more revenue overall in the past few years that directors are making more money than ever before, even without a larger percentage of residuals.

The writers went back to the table Monday, on the heels of a letter from WGAW president Daniel Petrie outlining the negotiating landscape.

“While the Directors Guild made some proposals in the area of DVD residuals, they did not make the issue a priority, and did not achieve any change in the DVD residual formula. This is disappointing to all those who believe, as I do, that artists deserve a greater share in the DVD bonanza,” Petrie's letter stated. “The DGA decided, however, that given the companies' determination to not give in on this issue, a change in the formula would not be possible without a lengthy strike — and perhaps not possible with a lengthy strike. Whether or not you agree with their analysis, it's certainly true that throughout our own negotiations in March, April, May and June, we met with absolute, unyielding rejection of our own proposal for a DVD increase. (One studio executive spoke of ‘burning the town down' before he'd change the DVD formula in our favor.)”

WGA negotiators were reportedly back at the table Monday, but there was no guarantee it would resolve the stalemate.

“Our exploratory talks with the AMPTP may or may not turn into actual talks,” Petrie's letter cautioned.

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