WGA Proposes Online TV-Content Streaming Fee Based on Views
Proposal Includes Tiered Compensation Formula
By Linda Moss -- Multichannel News, 12/5/2007 9:23:00 AM
Striking TV writers Wednesday unveiled some of the details of their counter offer to the studios, a proposal that includes a tiered compensation formula – based on viewing -- for the online streaming of TV shows.
The presidents of the Writers Guild of America East and West described their proposal in a letter to members as talks between the scribes and Alliance of Motion Picture and Television Producers continued Wednesday.
The AMPTP had offered to pay a single fixed fee of less than $250 a year for the video streaming of a hour-long TV show on
the Web, which the WGA, on strike since Nov. 5, rejected.
“Rather than basing the residual for the entire first year on a small percentage of the applicable minimum, we proposed that the fixed residual be paid on a higher percentage of applicable minimum for each 100,000 streams per quarter,” Michael Winship and Patric Verrone, president of the WGA East and West, respectively, said in their letter to members.
“After the first year, following the companies’ proposal, reuse is paid on a percentage formula,” the WGA said. “We held to our proposal that the appropriate rate for that payment is 2.5% of distributor’s gross and the same rate should also apply to streaming of theatrical motion pictures.”
In other words, under the new formula proposed by the writers they would get paid a 3% payment of “the applicable minimum” for the first 100,000 streams of a TV show in a quarter, and another 3% for each subsequent 100,000 views in that quarter, according to a WGA spokesman. At the start of each subsequent quarter, the count to 100,000 streams would start over again, with another 3% for each 100,000 streams.
The WGA didn’t offer a definition of “applicable minimum.”
This formula marks a change from the WGA’s previous position on the streaming of TV shows, where it was seeking a flat 2.5% of gross revenue. Now, it only is seeking that 2.5% rate after the first year of streaming a TV show.
“We modified our position to move closer to the companies on determining fair market value and ensuring our ability to obtain documents to enforce these revenue-based residual formulas,” the WGA said.
The guild added that determining the number of streams per quarter “is a readily ascertainable number. In fact, the companies are already keeping records of streams for their advertisers. Both the advertisers and the companies are already using these numbers as the basis for their business model.”
In summation, the WGA said, “Our fixed residual proposal is based on thorough analysis. To reach our formula, we looked at the value to writers under existing fixed television residuals and blended those residuals to the scale of new media. Our proposal protects the interests of both parties. We look forward to the AMPTP’s response as we continue to pursue a discussion of all the issues important to writers.”
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