Labor Discord Hits Hollywood, Again

Only days after a strong majority of the Screen Actors Guild rejected what producers called their “last, best and final” offer, Zócalo hosted a panel of Hollywood and high-tech experts to discuss the real sticking point in talent union contracts: compensation for work in new media.

Though other issues remain controversial – like revamping the 25-year-old home video revenue sharing formula and ending the actors’ contract at the same time as writers and directors, to increase future negotiating strength – the uncertainty over making a living in the digital era “was the biggest flashpoint,” said TroyGould entertainment attorney Jonathan Handel to the audience at ArcLight Sherman Oaks.

He and his fellow panelists – AFTRA National Executive Director Kim Roberts Hedgpeth, actress Kathryn Joosten, actor Ron Ostrow, UCLA’s David R. Ginsburg, Veoh Founder and Chief Innovation Officer Dmitry Shapiro – and moderator Jon Healey discussed what makes digital revenue so sticky a negotiating point, and what the shift from traditional media to new media means for the industry and for consumers.

The old new media

Labor and Hollywood guestsAs Handel noted, much of the mistrust between producers and actors dates back to the rise of home video. The formula by which actors are paid for video and DVD sales is “very disfavorable to talent.” He added, “[Studios] are reaping the whirlwind of their own greed on that formula in particular, and that has triggered the degree of mistrust…. My concern is we’re going to see this kind of labor uncertainty and pressure on labor over the course of the next decade.”

The talent unions want to avoid a similar outcome from negotiations on new media-including posting traditional media content online for downloading or streaming; new media content derived from traditional media; and wholly new media-based productions. While the unions haven’t pushed too hard on the DVD issue, new media has been roiling negotiations for writers, directors and actors since the summer of 2007. The Writers Guild of America went on strike in part over the issue (see Zócalo’s panel on that issue here), and the Directors Guild of America made a deal that Handel characterized as “good but not great.”

Making a living

Actors, Hedgpeth noted, are mostly concerned with making a living as their wages and salaries for traditional media decline. “The minimum in the contracts that create the floor for performances has become increasingly important in all of these contracts,” Hedgpeth said. She also noted that AFTRA signed its contract last year because it felt it achieved a higher base wage, and a “fair compromise for a transitional time in new media,” when forecasts show that in the near term, “the real core center of this business will continue to be traditional media.”

Labor and Hollywood guestsNegotiations have stalled and restarted and stalled again in part because the producers are “no friends to working actors,” as Handel said. “They demonstrated this dramatically when they said we don’t care that there’s a new [moderate SAG] faction in town, we’re going to drive you into the dirt.”

Joosten, an Emmy-award winning actress, noted that almost all major production companies are owned by multinational corporations that are increasingly funding and making movies around the world, like this year’s Best Picture winner “Slumdog Millionaire,” leaving American actors in a weaker negotiating position. The corporations “give two hoots in hell about us. We are a blip,” she said. Ginsburg disputed this point, noting that many an American-made film is financed from abroad.

Joosten also noted that wages aren’t the only thing shrinking. “We’re getting smaller and smaller casts, background is smaller on shows, there are more reality and more game shows. Scripted material is disappearing,” she said. Ostrow, a 20-year veteran of theater, television and movies, noted that it has become harder for him to live off his earnings, particularly in comparison with well-known actors, like Joosten. “Kathy has some clout [in negotiations]. I don’t,” he said frankly, adding later, “When you negotiate with a guy like me up front, that’s not a negotiation. That’s a take it or leave it….I need my union to protect me from myself.” (Some in the audience objected to the actors’ holding up productions and leaving many in the technical unions with little or no work.)

New media norms

Ginsburg, Shapiro and Handel noted some of the rules of new media, in part in response to an audience member’s point that younger generations have changed the relationship between consumers and media by demanding free and easily accessible content and making their own works online. As Ginsburg noted, citing the conversations he’s had with his students at UCLA, younger consumers won’t watch on TV what they can find online, whether legally or illegally, in its entirety or in clips. Much of the content available online is produced by non-professionals, and, Handel said, Hollywood-made work competes not only with that, but with video games, pirated material or other web-surfing pastimes. Advertising dollars for paid online content, too, is spread thin as the supply of content increases.

Labor and Hollywood guestsAnd while advertisers are moving online, it’s not so swift a migration when compared to how quickly consumers are converting to digital viewing, said Shapiro. Healey noted that one online production considered a success, Felicity Day’s “The Guild,” couldn’t pay her talent with sponsorship revenue until the second season. Advertisers are moving more toward embedded product placement, too, which actors can’t always negotiate. (SAG and AFTRA are currently negotiating their commercial contracts.)

Shapiro and Ginsburg offered some optimism. Though there’s “no giant paycheck on day one,” Shapiro said, professionals and amateurs alike can produce content online as the technology to do it gets less expensive and easier to use. Even if it is a frightening new world, new media has opportunities: “Nobody has to green light you,” he said.

And studios are fretting about new media and new business models, too, Ginsburg said. “This side of Sony wants you to go and watch Sony Pictures at $10.50 a pop,” he said, “But this side wants you to buy a Bravia and a 42-inch TV…with a built-in hard drive…. Studios as we know them today will be bypassed.”

Watch the video here.
See more photos here.

*Photos by Aaron Salcido.

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