Alternative Distribution Methods Affecting Union Talks
Pacts with Writers Guild of America, Screen Actors Guild, American Federation of Television and Radio Artists Set to Expire
By Linda Haugsted -- Multichannel News, 7/13/2007 7:28:00 PM
Beverly Hills, Calif. -- Representatives of TV and movie producers said they “need to know the size of the pie” of revenues from alternative distribution platforms before they can craft new contracts with three of Hollywood’s largest trade unions.
Speaking at a session they arranged before the Television Critics Association tour here, members of the Alliance of Motion Picture and Television Producers said they are committed to negotiating new pacts with the Writers Guild of America, the Screen Actors Guild and the American Federation of Television and Radio Artists.
All three contracts expire within the next year. But the profit picture for new platforms -- including Internet streaming, iPod content purchases and video-on-demand -- will be clearer in 24-36 months, they argued.
Bruce Rosenblum, president of Warner Bros. Television Group, said that by then, producers will have knowledge gained by two advertising cycles on broadband platforms. Content creators will have a chance to determine if revenue gained from these distribution sites is incremental or cannibalistic, he said. Also, the original production model for broadband programming needs to mature, he added.
Producers suggested that unions allow for a three-year study of the impact of Internet viewing before new contracts are crafted. Right now the digital landscape is so unpredictable that deals for broadband productions are rarely more than one year, he said.
Current compensation and residual models are 50 years old, Rosenblum added. Today, the average rate for producing a one-hour scripted drama runs $2.5 million-$3 million, he said, adding that network licensing fees do not cover the cost of production. To cover costs and generate a profit, shows need to make it into syndication, producers said. But in reality, 80% of new programs fail in their first year.
Producers need flexibility in guild contracts that will allow producers to program content anywhere consumers seek to find it in order to attract a following for a show on a traditional broadcast or cable network.
The first contract to expire is that of the writers. Guild members were invited by the TCA to describe, the same day or the day after AMPTP members appeared, what they hope to get out of contract talks (their pact expires Oct.10). However, the WGA members stuck to their plan to address the critics July 21.
Marc Graboff, co-chairman of NBC Entertainment and Universal Media Studios, said producers are preparing for a possible strike by writers but declined to say what that entails, adding that NBC is committed to providing quality entertainment programming.
“You are not going to see a test pattern,” he said, then joked, “Although maybe on NBC a test pattern in some cases would be OK.”
“We’re preparing for the worst but hoping for the best,” he said. If there is a strike, there will be a full schedule of programming on NBC, he said, and all of the other networks are doing the same.
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