It didn't take long for the entertainment unions to bring up the issue of residuals after the Walt Disney Co. announced Oct. 12 that episodes of its most popular TV series, Desperate Housewives and Lost, would be available for download onto iPods. That day the Screen Actors Guild, the American Federation of Television and Radio Artists, the Writers Guilds of America East and West, and the Directors Guild of America released a joint statement:
"The announcement today unveiling the Apple iPod represents the latest chapter in the ongoing technological evolution of our industry. We have not yet heard from the responsible employers of our members, but we look forward to a dialogue that ensures that our members are properly compensated for this exploitation of their work."
We're living in a fast and furious world of developing technology. If cell phone ring tones can blossom seemingly overnight into a global business worth more than $5 billion, anything is possible. Recent partnerships between two of the largest studios and the two major video-on-demand services—as well as other deals in place to broadcast films and TV shows onto cell phones—signals the beginning of the race to transmit to as many screens as possible.
Viewers will soon be able to pay 99 cents to watch prime-time shows—including Survivor, The Amazing Race, and the CSI and Law & Order series—via video-on-demand (VOD) just hours after the shows air on network TV. CBS announced an on-demand arrangement Nov. 7 to do just that with Comcast, and NBC Universal has a similar on-demand download partnership with DirecTV.
The network executives say partnering with technology companies is the future of the industry and potentially the best way to stem historically low box office returns and falling ratings.
"As with the Disney iPod deal, I think this deal is symbolic of the new age," Co-President and COO of Viacom and Chairman of CBS Leslie Moonves said regarding the partnership between CBS and Comcast. NBC Uni Television Group President Jeff Zucker agreed at the announcement of the NBC-DirecTV deal. "It is a significant acknowledgment that the way people are watching television is changing and the model is quickly changing," he said.
The synergy between entertainment and technology conglomerates continued in early November when Comcast, Time Warner, and Cox Communications announced a 20-year wireless partnership backed by $200 million to create new products and services, including wireless cable and content delivery services to cell phones.
Screening film and TV content on new tech gizmos is becoming a worldwide phenomenon. Last week, Eagle Pictures and Italian mobile-phone company H3G collaborated to show The Interpreter simultaneously in theatres and on cell phones, the first feature film with which this was attempted. Several major Italian distributors pulled the film from their theatres in protest, and Academy Award–winning actor-director Roberto Benigni expressed his disapproval, saying, "The beauty of cinema is watching it on the screen. On a cellular phone you only get a small taste." The uproar illustrates that downloading is becoming a global concern.
As the entertainment industry develops new models for consumers to buy and watch scripted content, so must the unions develop new models of compensating the actors, writers, directors, and other artists who make that content possible. Securing new residuals contracts, however, isn't exactly easy. The WGA, SAG, AFTRA, and DGA certainly discovered this during their negotiations with the Alliance of Motion Picture and Television Producers for DVD residuals earlier this year. AMPTP negotiators refused to alter the 20-year-old formula by which union members receive residuals on home-video sales, and the Alliance seemed unfazed by a threatened SAG strike when the talks broke down in January. Nonetheless, SAG and AFTRA members eventually voted to accept a new TV/Theatrical Agreement without DVD residuals. The WGA and DGA also agreed to hold the line on residuals. All four unions instead accepted increases in health-plan contributions from producers.
Similarly, SAG members overwhelmingly approved the Interactive Media Agreement in June, after threatening to strike over the lack of residuals. The contract granted higher pay and more benefits for actors who voice video game characters, but the new pact did not secure residuals.
In an interview with Back Stage last week, SAG National President Alan Rosenberg admitted his union hasn't been successful in negotiating residuals for new technology. "We have a history of not being able to improve on [the] percentage of DVDs and future technology…" he said. "People now are downloading onto iPods and Internet streaming, and we haven't begun to address that. We need to get a formula that will give us our fair share."
To that end, Rosenberg has a proposal before the SAG national board members to establish a new-technology department that will gather research and keep tabs on the rapidly evolving tech field.
If SAG and AFTRA or the unions are successful in negotiating residuals for podcasts and VODs, actors will still see less cash due to the scourge of worldwide pirating. A study released by NBC Universal Nov. 7 titled "Engines of Growth: Economic Contributions of the U.S. Intellectual Property Industries" concluded that piracy of intellectual-copyrighted products costs the U.S. economy about $250 billion annually. It has never been easier to pirate copyrighted material since the advent of the Internet and digital platforms such as MP3. Logically it won't be long before podcasts of Desperate Housewives and Lost can be swapped through illegal file-sharing programs in the vein of Napster and Grokster, which became for-pay downloading services after legal pressure from the entertainment industry forced them to temporarily shut down.
We salute the unions' joint statement recognizing the importance of the new technologies to their members' careers. We believe the entertainment unions should stay on top of the latest emerging technologies, as well as arrangements between tech companies and the major studios and networks. The unions also need to communicate constantly in this area as they move toward bargaining their new contracts—including film, TV, video games, and commercials—assuring they go to the table with responsible proposals to bring their members the pay deserved when members' work appears via the new technologies.