TV Residuals and the DGA Deal: A SAG Perspective

The following was submitted by SAG board member and regular U.H. contributor Justine Bateman.

Remember how at the beginning of the WGA's negotiations, the CEOs made a threat about getting rid of residuals? Well, by my reading, the DGA deal does that for TV.

Are you ready to trade an entire year's worth of TV residuals for a one-time fee of $1,200?

Currently, writers and directors both make approximately $20,000 for the first prime-time rerun of an hour-long episode. The residual gradually decreases on any later reruns (if the writer or director is lucky enough to get more reruns). So the directors' deal potentially gives up 97% of the first prime-time residual while the corporations can "rerun" their work infinitely over an entire year.

It seems to me that if the DGA formula for streaming is ratified, the networks will be on a fast track to never, ever rerun our work on broadcast TV.

The DGA formula is based on current fixed residuals, not upon any measure of online revenue. And experts predict that that revenue will more than double over next three years. Today, advertising online doesn't begin to match that of conventional TV, but as ad dollars shift to the Web, why would the companies rerun content when they can stream it?

If this residual formula is accepted by the WGA or (god forbid!) SAG, I bet you will see more fiber optics get installed by the communications companies. The corporations will want everybody in the country to have the highest speed Internet so they can deliver everything over broadband.

And this isn't some vague future -- IPTV, with a set-top box that streams content directly from computer to your tv, is expanding market share right now, most notably in Europe and Asia, and is already the way many people watch tv -- it's replacing broadcast tv, but viewers still use their same tv set and see the same shows.

IPTV, and services like it, are exploding in popularity right now. And under the terms of the DGA deal, what people using IPTV see on their tv looks like a rerun -- but contractually, it's streaming.

I fear the DGA formula will, in one swoop, cancel out every single residual stride that older members sacrificed to gain in the 1960's. That would be shameful.

It's been said -- I personally have said it many times -- that this moment is like the dawn of television in the sense that the responsibility falls on us to establish the rates and terms under which we will work. But I'm sure the corporations have said the same thing themselves... in the sense that when TV began there were no residuals.

Content creators have lost millions upon millions on that twenty-year-old DVD deal, but at least we could make a decent living under the minimums for TV and film production plus residual payments for TV re-use. It's vitally important we get Internet re-use terms right. The Internet is not a "supplemental market," it's where we are all going to work. By my rough estimate, the formula that pays writers and directors $1200 would translate into $99 for actors.

And we can forget about international residuals too. The Internet is "international." And what about syndication market residuals? After a show has had its run in prime time, "syndication" will likely mean web sites. The health and pension contributions that BTL crew members in the DGA depend upon will gradually go away as there will be no residuals to support them. And I understand the pension and health over at IATSE is 60% supported by residuals. When that contribution disappears, crew members will have virtually no insurance or pension.

The above scenario is NOT a legacy for which I want to be responsible.

I urge all DGA, WGA and SAG members to look in their books for 2007. How much of your income consisted of residuals? Now ask yourself if you could get by if that number were reduced by 97%.

Just ask yourself that, and come back and tell everyone you want that deal.

-Justine