UPDATES with AMPTP response today.

We already know that SAG offered a counter-proposal to the AMPTP’s supposed “final” offer. For once, SAG and the AMPTP agree on the reasons why. Today, the AMPTP said the Screen Actors Guild’s chief negotiator told the Big Media cartel’s negotiating committee that he could not accept AMPTP’s offer because the digital media “landscape has dramatically shifted in the six months since the DGA” reached its deal. The Screen Actors Guild also gave that reason today — and explained why by issuing a very intriguing White Paper on its website entitled, “It’s Not New Media – It’s NOW Media” showing why the AMPTP’s latest New Media offer isn’t good enough. It’s an index of significant events and deals in entertainment media technology made since January 2008 when the DGA-AMPTP deal tried to set “the template” for all the guild negotiations. “The index shows a sizable increase in technology investments, new deals, unique platforms and dramatic market forces at work,” SAG says.

For its part, the AMPTP said today that SAG “ignores the truly seismic shifts we have all seen over the last six months in the rapidly deteriorating economy, the worsening credit crisis, and the skyrocketing price of energy.” This, even though most Big Media moguls said publicly at Camp Allen that the downturn wasn’t affecting their biz. But the big actor’s union answers that charge in its White Paper. It also quotes a Forbes article written as recently as June 2008 explaining why pricing for display advertising next to user-generated content has collapsed. And rates on Facebook, MySpace and YouTube etc have fallen 45% since February 2008. “Most of the momentum now is for ads within full episodes run on the TV network sites, such as NBC and Fox’s Hulu, ABC.com and CBS.com. It’s a format advertisers understand,” the magazine said.

So what’s the AMPTP’s next argument? That SAG members are losing out by continuing to be paid under the old contract during this stalemate when they could be earning under the new one. Not very persuasive that — especially after the AMPTP continually chided the WGA for NOT having continued to negotiate instead of striking! Sure sounds like SAG has the most leverage by just waiting, and waiting, and waiting…

Here’s the full text of an email SAG sent its members today:

Dear Screen Actors Guild Member,
I want to tell you why your national negotiating committee has not accepted the June 30 offer put across the table by the Alliance of Motion Pictures and Television Producers (AMPTP)  For one reason and one reason only: It’s not a good offer. It doesn’t address enough of your priorities (as outlined in past SAG Contract 2008 Reports), particularly in new media.

The AMPTP ‘s current offer to SAG, which is nearly the same for new media as the deals that the DGA, WGA and AFTRA accepted, has come to be called “the template.” Some of you may be wondering why we don’t just agree to the template established by the other unions. The template doesn’t protect actors, and while we may be the last union to come to the table, we still have the obligation to address the issues that are most important to you.

We have had the extra time to effectively assess the impact of rapid technological and marketplace changes, and after careful analysis, we don’t believe the template works for SAG members. In the six months since the Directors Guild of America reached a deal with the AMPTP, the landscape in digital media has dramatically shifted. The seven global conglomerates that own the motion picture studios and television networks are so confident in digital media prospects, that they are putting up huge dollars to fast track their technology deals.

The DGA and WGA represent writers and directors, not actors.  Their resolution of the new media issues may work for them, but they don’t address your specific needs.  The DGA and WGA agreed to allow producers to make new media productions entirely non-union, at the producers’ option, for projects below budgets of $15,000 per minute (effectively, almost all new media productions for the foreseeable future.)

Most union directors and writers don’t have to worry about large non-union pools of trained and talented competitors, but union actors do.  Non-union principal and background actors already compete for your jobs, especially outside of New York and California.  It makes no sense for SAG to agree to allow the studios and networks to exacerbate our problem by giving them a pass to produce entirely non-union under a SAG union contract.  We are a union, and our mission and obligation to all of our members nationwide is to promote union jobs.

Another example of how the new media template negatively impacts actors is its effect on residuals.  The AMPTP’s recent offer to SAG doesn’t include residuals for programs made for new media and streamed again on ad-supported new media platforms. So a program originally made for ABC.com could be available for re-viewing on ABC.com, or any other ad-supported Internet outlet, as often as possible and forever with no residuals, no matter how much money is generated or how many times it is shown. (There is one minor exception if a program is made for and re-run on a pay platform like iTunes and the budget is more than $25,000 per minute.)

Just as we have shown we can work successfully with low-budget filmmakers, we are flexible and can accommodate fledgling new media productions under SAG contracts. We have offered to base made-for new media residuals on a percentage of revenue with no fixed obligation.  If there is no money generated, no residuals are paid.  But if revenue is generated from programs available over time, actors should receive residual payments.

So far, management’s negotiators have rejected SAG’s reasonable solution, while management’s proposal could mean the beginning of the end of residuals. What some among our employers – the major global media conglomerates — insist on terming “new media” it’s really “now media.”  It is urgent, instant and immediate.  That’s why achieving a fair compensation formula now, in all forms of media, and confirming jurisdiction from the first dollar of the production budget, are core objectives of the SAG national negotiating committee. [Click here to downlink the full version of our “Now Media” white paper including the index of recent new media entertainment developments.]

Your national negotiating committee takes its responsibility very seriously. We want to make a deal as soon as possible, but we don’t want to make a deal that hurts actors.  No deal is better than a bad deal that allows non-union productions by our employers and snuffs out residuals for projects made for and rerun on new media platforms.  We don’t need to experiment on the backs of actors.  Our real world and practical experience has taught us how to provide union benefits and protections in low budget productions.

Management’s resistance is frustrating but we have to be patient.  The stakes are too high to concede jurisdiction and residuals for programs made for new media.  That future is now and, if we ignore it, it will pass actors by and this generation and future generations of actors will never recover.

Thank you for your understanding and your solidarity.
Doug Allen, National Executive Director and Chief Negotiator

P.S.  For anyone who thinks that is a hypothetical and distant future, this is what the business magazine Forbes said in a June 2008 article about YouTube: “The vast majority of YouTube’s library is…babies laughing and dogs splashing in wading pools…  Pricing for display advertising next to user-generated content has collapsed.  Rates on sites such as Facebook, MySpace and YouTube have fallen 45% since February (’08), to 18 cents per thousand page views, according to digital analytics outfit PubMatic.  Most of the momentum now, says Chris B. Allen, director of video innovation at media buyer Starcom is for ads within full episodes run on the TV network sites, such as NBC and Fox’s Hulu, ABC.com and CBS.com.  It’s a format advertisers understand.”

Click here to download the full text of our white paper “It’s Not New Media – It’s NOW Media.” And to see an index of significant events and deals in entertainment media technology since January 2008, when the DGA-AMPTP deal tried to set “the template.”  The index shows a sizable increase in technology investments, new deals, unique platforms and dramatic market forces at work.

Here’s the AMPTP statement From today:

“Today, SAG’s chief negotiator said he could not accept AMPTP’s offer because the digital media “landscape has dramatically shifted in the six months since the DGA” reached its deal. This statement is not just factually untrue; it ignores the truly seismic shifts we have all seen over the last six months in the rapidly deteriorating economy, the worsening credit crisis, and the skyrocketing price of energy. Even in the midst of these severe economic problems for our country and our industry, AMPTP has made SAG a good and fair offer, with more than $250 million in increased compensation, groundbreaking new media rights, and pension and health protections that most Americans would envy.

By refusing to accept the AMPTP’s offer, SAG’s negotiators are ensuring that SAG members will continue to work indefinitely under the old contract – a contract negotiated by SAG that has allowed for non-union Internet production since 2001. AMPTP has offered to extend SAG jurisdiction to original new media production, including low-budget programs that employ a single “covered actor.” The AMPTP’s final offer also guarantees residuals of 3.6% of distributor’s gross when original new media productions are reused on consumer pay platforms, and terms to increase pay and residuals if the program is eventually exhibited theatrically or on television. These terms are a major advancement for SAG members compared to the existing contract terms.

In addition, the new media framework we have offered to SAG establishes first-ever residuals for ad-supported streaming, made-for new media programs and reuse of clips in new media. We have also offered to double the residual rate for permanent downloads and give SAG exclusive jurisdiction over new media programs derived from existing television series. Not a single one of these rights exists under the contract that expired on June 30th – a contract that SAG members now must work under because of the failure of SAG negotiators to make a deal.