Opinion: Elaborating on today’s SAG editorial and new media residuals

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Today’s editorial about the new SAG contract tried to summarize more than two years of Hollywood labor talks in a single sentence, a high-risk move that, ahem, was not completely successful. Here’s the sentence:

A process that began with the Writers Guild of America demanding twice as much compensation from DVDs, and the studios proposing to eliminate the cherished residual system, ended with contracts for all the unions that left DVDs unchanged and residuals intact, albeit less generous.

By ‘residuals intact,’ we meant that the new contracts didn’t change the residuals already established for TV and other traditional outlets. ‘Albeit less generous’ was a reference to newly created residuals for online programming that were minuscule in comparison to the ones paid for TV reruns. But our words didn’t necessarily get these points across, and AFTRA National Executive Director Kim Roberts Hedgpeth sent me an e-mail registering her protest:

It is simply not the case, as the Times asserts, that provisions regarding residuals in the new contracts negotiated by the various talent unions during the past year are “less generous” than previous such provisions. At least with respect to the AFTRA Television Agreement negotiated in 2008, no residual of any kind was reduced in any manner in that new agreement. Indeed, by establishing residual rights where none existed before (for free-to-the-consumer platform electronic re-use) and by upping the permanent download residual, while leaving every other pre-existing residual intact, the residuals provisions of AFTRA’s new television contract are more generous—not less—than previous agreements. Although we cannot speak for other entertainment industry unions, we believe that the same is true of their recent negotiations as well.


She’s right on all accounts. I would add, though, that many writers and actors don’t view the new residuals for programs streamed on Hulu and other online sites as being ‘more generous’ than what they’ve relied on for years in television. Nor are there any residuals to be paid when a program made for the Internet is resold to other new-media outlets.

The ad-supported streaming provisions of the contracts are the real flash-points, because many union members see Hulu and its ilk taking the place of reruns on TV. In their minds, they are trading hefty TV residuals for parsimonious Internet ones. There’s no question that the networks are airing far fewer reruns, and that more people are catching those repeats online than before. But it’s also true that, at least so far, the shows that air on Hulu et al aren’t generating nearly as much revenue for the networks as their reruns used to.

So, that’s what we meant by ‘less generous.’ Now if only the newspaper offered as much space as the Opinion L.A. blog....

-- Jon Healey