Clarification on "What We Want" in New Media

A couple of people reading the site asked me to reprint this exchange from the comments section on John McNamara's letter. I've cleaned it up a little bit, added some things I forgot, and gotten more exact #'s from the MBA, but here's the exchange.

(Oh, and bear in mind, I'm not on the NegComm, not on the Board, not a lawyer, etc. So my response is a sketch at BEST, not a full-blown super-accurate presentation of everything to do with minimus and residuals and so on).

Commenter rHob posted this question:

I just want to ask a serious question and I mean that, and I want the writers out there to seriously answer me.

So if I understand it correctly, you currently receive $40,000 for the first airing of a broadcast episode and then it's either another $40,000 or it's $20,000 for the rerun and then progressively it goes down from there.

So what you really want is the same thing for straight to web episodes (webisodes)??? So this is going to cost the studios $40,000 per writer per episode for the net. Let's say that there are 5 writers, that's a cost of $100,000 right up front that the studios will have to pay just to get something started to go onto the web. Now, as I have been reading, you want to venture out on your own and stream your own shows, skipping the studios. So now you are going to compete with the studios directly but you don't have that initial $100,000 overhead. Is that fair? If this is the case, then you should have a Non-Competition clause in your contract, otherwise, how are the studios supposed to compete? The very studios that have made sure to give you employment for the past 100 years. Riddle me that Batman!

rHob

And this was my response:

Just a quick correction/explanation, I'm sure other people will do it better than me, but here goes:

For an hour of network primetime television, you get paid around $30K , not $40K, to write (which involves lots of outlines, drafts, read-throughs, many, many revisions, and so on until you finally shoot). For anything that's not primetime network -- like basic cable -- payment ranges between about $11K at the low end and $20K at the high end.

You DON'T get paid any further when your episode airs. You already got paid to write it.

You then get paid $20K for the first hour-long network primetime rerun. In cable, you get paid a lot less (I'm not sure of the exact number, it's in the neighborhood of $3400 for the first rerun, and then the amount goes down proportionally with each airing to a floor of about $300.) Also, half-hour cable rerun $'s are lower (around $1900 for the first rerun.)

And to answer the question of "why do you get paid at all?" that's because of residuals -- payment for the reuse of our content, when it's making money for the companies. My personal favorite explanation of residuals and why they exist is Craig Mazin's Magic Cake.

For the second part of your question: The residual (whatever dollar amount it is) is NOT multiplied by the "number of writers." There is usually only one, maybe two, credited writers per episode. There are credit rules about this; you can go to a max of three for an ep, but it's very unusual and they all split the resids.

The residuals don't increase by the number of people who are credited on the script. This is the same for features. The residual number is fixed, and you just split it between however many writers are CREDITED (which in features usually can't be more than three max, again, as per credit rules.) [And keep in mind that writing teams count as one "credited writer," so in features, it's not unusual for the residual pool to be split six ways. --ed.]

The idea that the WGA asked for "the same thing" for straight-to-web episodes is NOT correct. First of all, reuse of existing shows isn't "straight to web." That's streaming of something that's already been shown somewhere else first -- and what we're asking in the broadest terms is that we get a percentage (probably less than 2%) of whatever revenues the companies make when they rerun that content via streaming on the Internet.

We don't want a fixed flat number, like $20,000 (or for that matter, $1200 a year) per episode. What we asked for when this negotiation started, back in October, is a percentage, precisely because it's the only way to be sure we're being fair. If the companies get paid, they pay us, basically, somewhere around a penny and a half per dollar they make. That means that their costs NEVER outstrip their income; that problem only ever happens with flat fees.

We're sharing the risk -- if the companies are right, the income from ad revenues will be small, at least until the market "matures" -- but if it turns into a windfall, like DVD's did, then we will share in the upside as well.

What we are asking for with Internet-first (i.e. "straight to web") content is that we have jurisdiction over production so that we can get health, pension, resids and separated rights.

Internet-first means something like Ask a Ninja, that's not a rerun but an original created expressly for the Internet. (It can also mean "webisodes" that are made to go along with existing television shows but go straight-to-Internet, like webisodes for Lost or Battlestar Galactica.) "Jurisdiction" just means that the companies agree it's under signatory rules for health, pension, resids and separated rights. And if your resids are a percentage of your overall distributor's revenue (in other words, not a flat fee), then that number doesn't make it too expensive to produce that content. SAG already has a "Straight To Internet" framework that allows even the lowest budget work to be covered without making the costs so high it's unaffordable to make that content.

And just like the streaming, if we get jurisdiction on Internet-first, the only payouts that are going to be big for the companies will come in success -- if they have to share a piece of the merchandising/exploitation pie for a world or a character (say, Buffy Summers or the Buffyverse itself) then they'll only be doing it because the Internet-first content is successful and is being exploited "up-channel", i.e. being made into a movie or a tv show or something with a bigger revenue stream ALREADY. So again, companies only have to pay money out in success.

That's what we're asking -- or at least, it's what we were asking, when all this started. Since there's a press blackout, no one knows where things stand now. But all the conversation swirling around the $20K rerun vs. streaming has been confusing, and seemed worth at least trying to clear up.

-- LK