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WGA, Producers Stuck on DVD

3 Jun, 2004 By: Holly J. Wagner

The Association of Motion Picture and Television Producers (AMPTP) has thrown down the DVD gauntlet before the Writers Guild of America (WGA) with a “final” three-year contract offer that does not include any change to DVD and Internet payments for writers.

The writers, meanwhile, are holding fast to their demands, saying the compensation formula used for new technologies is unfair and outdated.

No further negotiations were scheduled at press time. Meanwhile there has been no indication of a possible strike by WGA members in response.

“The response of the companies and the networks to our reasonable demands has, so far, been inadequate and unacceptable on every issue of concern. But that doesn't mean we should simply walk away from the table. The fact is, the economic well-being not only of our membership but also of the entire industry is at stake in these negotiations,” said WGA president Daniel Petrie Jr. “With this in mind, our message to our members and the industry is: the Writers Guild of America, west and east, intends to continue these talks as long as it takes to reach a fair agreement. We urge the companies to make the same commitment.”

The offer provides increases in several areas, including health fund contributions, minimum rates, excerpt payments, made-for-video sequels to feature films and made-for-pay television residuals. It also calls for all increases to be retroactive to May 2 if it is ratified within 30 days. The proposal would give the WGA “favored nations” status with the Directors Guild of America (DGA) and Screen Actors Guild (SAG) as to the DVD residual formula if either of those guilds negotiates changes in that formula before the proposed three-year contract ends. The current contract with the WGA does not include a residual formula for unlimited exhibitions of motion pictures delivered through the Internet.

“With regard to DVDs and the Internet, we feel it is crucial for the current and future health of the industry that we maintain the status quo in these areas,” said AMPTP president Nick Counter. “In an era of escalating costs, when box office revenue no longer covers expenditures, DVDs have become a primary revenue source for feature films. Further burdening a film's revenue stream without, at the very least, recouping production, distribution and marketing costs is simply fiscally irresponsible. With respect to Internet delivery, it is too soon to determine the appropriate course. The studios have invested heavily in such nascent services as Movielink to assess in the real marketplace the business and copyright protection feasibilities of Internet delivery of feature films.”

So far, the guild isn't budging.

“Internet video sales represent the future of our industry, yet the companies refuse to accept the same formula that is the standard for not only Internet rentals but also all other percentage-based residuals other than DVDs,” Petrie said. “As for DVDs and videocassettes, the current formula is based on a 20-year-old business model that is both outdated and unfair.”

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