Thursday, July 17, 2008

Letter from SAG

SAG and the AMPTP seem to be holding firm to their positions. Here's an email SAG sent to their members today, and the AMPTP response:

July 17, 2008

It’s Not New Media – It’s NOW Media

Dear Screen Actors Guild Member,

I want to tell you why your national negotiating committee has not accepted the June 30 offer put across the table by the Alliance of Motion Pictures and Television Producers (AMPTP.) For one reason and one reason only: It’s not a good offer. It doesn’t address enough of your priorities (as outlined in past SAG Contract 2008 Reports), particularly in new media.

The AMPTP ‘s current offer to SAG, which is nearly the same for new media as the deals that the DGA, WGA and AFTRA accepted, has come to be called “the template.” Some of you may be wondering why we don’t just agree to the template established by the other unions.

The template doesn’t protect actors, and while we may be the last union to come to the table, we still have the obligation to address the issues that are most important to you. We have had the extra time to effectively assess the impact of rapid technological and marketplace changes, and after careful analysis, we don’t believe the template works for SAG members.

In the six months since the Directors Guild of America reached a deal with the AMPTP, the landscape in digital media has dramatically shifted. The seven global conglomerates that own the motion picture studios and television networks are so confident in digital media prospects, that they are putting up huge dollars to fast track their technology deals.

The DGA and WGA represent writers and directors, not actors. Their resolution of the new media issues may work for them, but they don’t address your specific needs. The DGA and WGA agreed to allow producers to make new media productions entirely non-union, at the producers’ option, for projects below budgets of $15,000 per minute (effectively, almost all new media productions for the foreseeable future.)

Most union directors and writers don’t have to worry about large non-union pools of trained and talented competitors, but union actors do. Non-union principal and background actors already compete for your jobs, especially outside of New York and California. It makes no sense for SAG to agree to allow the studios and networks to exacerbate our problem by giving them a pass to produce entirely non-union under a SAG union contract. We are a union, and our mission and obligation to all of our members nationwide is to promote union jobs.

Another example of how the new media template negatively impacts actors is its effect on residuals. The AMPTP’s recent offer to SAG doesn’t include residuals for programs made for new media and streamed again on ad-supported new media platforms. So a program originally made for could be available for re-viewing on, or any other ad-supported Internet outlet, as often as possible and forever with no residuals, no matter how much money is generated or how many times it is shown. (There is one minor exception if a program is made for and re-run on a pay platform like iTunes and the budget is more than $25,000 per minute.)

Just as we have shown we can work successfully with low-budget filmmakers, we are flexible and can accommodate fledgling new media productions under SAG contracts. We have offered to base made-for new media residuals on a percentage of revenue with no fixed obligation. If there is no money generated, no residuals are paid. But if revenue is generated from programs available over time, actors should receive residual payments. So far, management’s negotiators have rejected SAG’s reasonable solution, while management’s proposal could mean the beginning of the end of residuals.

What some among our employers – the major global media conglomerates -- insist on terming “new media” it’s really “now media.” It is urgent, instant and immediate. That’s why achieving a fair compensation formula now, in all forms of media, and confirming jurisdiction from the first dollar of the production budget, are core objectives of the SAG national negotiating committee. [Click here to downlink the full version of our “Now Media” white paper including the index of recent new media entertainment developments.]

Your national negotiating committee takes its responsibility very seriously. We want to make a deal as soon as possible, but we don’t want to make a deal that hurts actors. No deal is better than a bad deal that allows non-union productions by our employers and snuffs out residuals for projects made for and rerun on new media platforms. We don’t need to experiment on the backs of actors. Our real world and practical experience has taught us how to provide union benefits and protections in low budget productions.

Management’s resistance is frustrating but we have to be patient. The stakes are too high to concede jurisdiction and residuals for programs made for new media. That future is now and, if we ignore it, it will pass actors by and this generation and future generations of actors will never recover.

Thank you for your understanding and your solidarity.

Doug Allen
National Executive Director and Chief Negotiator

P.S. For anyone who thinks that is a hypothetical and distant future, this is what the business magazine Forbes said in a June 2008 article about YouTube:

“The vast majority of YouTube’s library is…babies laughing and dogs splashing in wading pools… Pricing for display advertising next to user-generated content has collapsed. Rates on sites such as Facebook, MySpace and YouTube have fallen 45% since February (’08), to 18 cents per thousand page views, according to digital analytics outfit PubMatic. Most of the momentum now, says Chris B. Allen, director of video innovation at media buyer Starcom is for ads within full episodes run on the TV network sites, such as NBC and Fox’s Hulu, and It’s a format advertisers understand.”

Click here to download the full text of our white paper “It’s Not New Media – It’s NOW Media.” And to see an index of significant events and deals in entertainment media technology since January 2008, when the DGA-AMPTP deal tried to set “the template.” The index shows a sizable increase in technology investments, new deals, unique platforms and dramatic market forces at work.

Send your email questions or comments to us at (Your email browser must be open to access the email link.)



July 17, 2008

Statement by the AMPTP

Today, SAG's chief negotiator said he could not accept AMPTP's offer because
the digital media "landscape has dramatically shifted in the six months since
the DGA" reached its deal. This statement is not just factually untrue; it
ignores the truly seismic shifts we have all seen over the last six months in
the rapidly deteriorating economy, the worsening credit crisis, and the
skyrocketing price of energy. Even in the midst of these severe economic
problems for our country and our industry, AMPTP has made SAG a good and fair
offer, with more than $250 million in increased compensation, groundbreaking
new media rights, and pension and health protections that most Americans would

By refusing to accept the AMPTP's offer, SAG's negotiators are ensuring that
SAG members will continue to work indefinitely under the old contract - a
contract negotiated by SAG that has allowed for non-union Internet production
since 2001. AMPTP has offered to extend SAG jurisdiction to original new media
production, including low-budget programs that employ a single "covered actor."
The AMPTP's final offer also guarantees residuals of 3.6% of distributor's
gross when original new media productions are reused on consumer pay platforms,
and terms to increase pay and residuals if the program is eventually exhibited
theatrically or on television. These terms are a major advancement for SAG
members compared to the existing contract terms.

In addition, the new media framework we have offered to SAG establishes
first-ever residuals for ad-supported streaming, made-for new media programs
and reuse of clips in new media. We have also offered to double the residual
rate for permanent downloads and give SAG exclusive jurisdiction over new media
programs derived from existing television series. Not a single one of these
rights exists under the contract that expired on June 30th - a contract that
SAG members now must work under because of the failure of SAG negotiators to
make a deal.

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