Memo to DGA - Please Propose a Tri-Guild New Media Adjustment Committee

Since the WGA negotiations have devolved into nuclear winter, it looks like the next move will be talks between the studios and the DGA. Here's a suggestion/request for the directors: please include, in your proposal to the studios, a tri-guild New Media Adjustment Committee.

What does that mean?

"Tri-guild" - the committee should have members from management and from all three above-the-line guilds (WGA, DGA, SAG), assuming each guild ratifies a similar contract proposal (so that all three guild agreements would contain the same language establishing the committee). The committee might also have members from the IA (IATSE represents many below-the-line workers, i.e. craftspeople), AFTRA (a performers union), and AF of M (musicians union), both of which also have new media issues (since both also receive residuals); however, these latter two unions haven't generally been part of multi-guild committees in the entertainment industry. The committee should also have more-or-less non-aligned members from the legal and agency world, academia, and elsewhere.

"New Media" - the committee's focus would be the issues associated with new media.

"Adjustment Committee" - the committee would have the power to propose and pre-negotiate changes to the WGA, DGA and SAG agreements, so that new media issues aren't dealt with in an almost-indigestible lump on the eve of (or after) contract expiration, which is part of what led to the current, bitter strike.

The committee should meet quarterly or even monthly. It will need research support (sharing of data) from all parties, and a small budget for purchase of research reports and other such expenses. The committee would build relationships with major players and information sources (agencies, attorneys, other guilds, academics, research firms, tech cos., etc.).

The WGA had a Contract Adjustment Committee in the 1990's, with a general focus (it had nothing in particular to do with new media), but I understand that it was not very effective. This time the stakes are higher, because technological change, like the Terminator, will never stop.

This means more of what we've been seeing for the last 10 years: software keeps evolving, business models keep changing, hardware gets smaller, faster and cheaper, data capacities and transmission speeds increase, new web sites spring up overnight with instant audiences, and new technologies are developed on a regular basis.

Where all this leads is unknown, but one thing is clear: Silicon Valley is not going to suddenly take an Ambien and stop innovating. Yet, when it comes to guild agreements, the entertainment industry seems content to snooze between contract renewals.

The guild agreements are multi-hundred page accretions of hard-fought gains, historical accidents, and tough compromises. Unless the entertainment industry establishes a mechanism to modify those contracts on an ongoing basis - rather than attempting to do so under looming deadlines - we may face repeated strikes and near strikes (de facto strikes) at regular, three-year intervals. The 2007 strike is no fun, to put it mildly. Do we really want the same thing in 2010 as well?

DD CGI CO TO IPO

Digital Domain, a major visual effects company (CGI, Computer Generated Imagery aka Computer Graphics Imagery), has filed for an IPO, reports socalTECH.com. They're looking to raise $100M.

"Don't Touch My Body (of Work)!" Vivid Tells PornoTube

Vivid Video, a major adult video producer, is suing PornoTube, a YouTube knockoff, reports the LA Times. The suit alleges that Vivid's copyrighted content is available on PornoTube. Suit is conceptually similar to the Viacom suit against YouTube and Google.

The LA Times story also notes in passing that the widespread availability of free short clips on the Web hurts porn producers (whose content is often long-form) because "consumers of adult fare often get what they are looking for in clips of five minutes or less." Indeed.

Vudu Works Its Magic, Releases HD Movies Day-and-Date With HD DVD and Blu-ray

For the first time, a movie will be available (legally) in electronic form on the same day it's released on physical media, the LA Times/AP reports.

The movie is The Bourne Ultimatum, and it will be available this Tuesday in high-def on the Vudu box - a hybrid download/streaming device - the same day as the DVD is released. The film industry term for this is a "day-and-date" release.

Usually, electronic releases are not available until the pay-per-view or pay-TV window, which is usually a month or so after the DVD release. Most such releases are in download or streaming form via the Internet, whereas Vudu is a somewhat unique device that attaches to the television set.

Still, if the experiment is successful, it could lead the way to accelerated online delivery of more films - a development that the big DVD retailers (Wal-mart, Best Buy and Target) might strenuously resist, but that might be favored by download vendors such as Apple (iTunes) and Amazon.

This development will contribute to the debate over release windows - the film industry practice of releasing a movie in phases via different media - first theatrically, then DVD, then pay cable, basic cable, and finally syndication. The industry maintains that this approach maximizes revenue, while critics suggest that refusing to make films immediately available via some form of home media encourages piracy and frustrates consumers.

Interestingly, there has been some collapse of windows related to foreign release patterns. In the past, foreign theatrical releases followed domestic. Today, due to the Internet's effect on both piracy and worldwide publicity, many large "event" films ("tentpoles") are released in some international territories day-and-date with domestic.

Too Funny - AMPTP.com

If you want to visit the AMPTP website, go to AMPTP.org. But if you want to see a hilarious and sharp-tongued parody site, visit AMPTP.com, at least until the lawyers make them take it down (it may amount to cybersquatting). The first sentence on the home page sets the tone:

We are heartbroken to report that despite our best efforts, including sending them a muffin basket, making them a mix CD, and standing outside their window with a boombox blasting Peter Gabriel songs, our talks with the WGA have broken down.

There are five pages in all. The owner of the site, Tactical Edge Group's Bill Davis - an experienced prop master and armorer (weapons master for TV show and movies) - tells me he's rented the site for a limited time to a group of striking writers. He's owned the site for several years, along with several hundred others. A visit to the Internet Archive's Wayback Machine (which archives past versions of websites) shows that the site has been parked for several years. Check it out at http://web.archive.org/web/*/http://amptp.com .

Tip o' the hat to Dave McNary at Variety for mentioning the site to me.

Expanding the IP Empire

A bill introduced in the House would expand enforcement of IP laws regarding movies, fashion and other areas, reports Variety. The bill would establish an IP czar in the White House and an IP division in the Justice Dept. Too early to tell what the bill's prospects might be.

DVD + Hi Def = $20 billion in 2012

"By 2012, standard DVD discs will total $10 billion in U.S. consumer sales, HD DVD $5 billion and Blu-ray $5 billion," per Adams Media Research, as reported by Video Business.

This compares with 2006, in which DVD was a $16.5 billion business, according to the Entertainment Merchants Association trade org. (Unclear if this also includes hi def, but the difference is probably not great either way.)

That growth, even in the face of the continued hi def format war (Blu-ray vs. HD DVD), means that the WGA's failure to achieve an increase in the DVD residual (see WGA Strike - Negotiation Issues) will continue to represent a significant loss, as I previously predicted. See Slipped Disc: Why DVD Residuals Still Matter — and Always Will.

WGA Strike - Negotiation Issues

I've written a detailed memo on the current state of the proposals in the writers strike. It includes several summary sections in plain English, as well as more detailed analysis.

WGA Strike - Confusion Reigns

Let's see the proposals - the studios (AMPTP) and writers (WGA) need to release the full text of their latest proposals so the entire entertainment industry can form an informed opinion on the negotiations. Here's why:

Streaming Ad Market Worth $120m to Nets in '07

The Financial Times is reporting that the four major U.S. networks will reap $120 million in 2007 from ads connected with free streaming of their content. The number is expected to sharply increase next year. The FT's source is Starcom, described as a leading media buying agency.

The WGA wants 1.2% of such ad revenue, which suggests $1.44 million would have gone to the WGA for 2007. However, the Guild is willing to give the nets a residual-free promotional window of several days (i.e., the first several days that a particular program is available would not trigger residuals). Thus, the WGA's take would be less than the math suggests.

The cost to the nets and/or studios would be 9.5 times as much, because the residual formulas in agreements for the directors, actors and below-the-line craft workers would contain similar residuals formulas.