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in Filmmaking
on Oct 31, 2007

Unless the latest round of dueling press releases between the AMPTP and the WGA represents a last spasm of contentiousness before a final reconciliation, which I really doubt, it looks like the WGA could be striking by the end of the week or Monday. (The WGA agreement expires at midnight tonight, but it originally looked like writers would work while negotiations continued post-expiration.)

On her Deadline Hollywood Daily Nikkie Finke posts a statement issued by AMPTP President Nick Counter. (He’s the guy repping the studios and producers). In it, Counter says not only that the WGA-desired revision of the DVD royalty formula, which was originally devised before home video was a thriving industry, is a non-starter but that, furthermore, for calculation purposes internet downloads must be considered the same as DVDs.

Counter wrote:

We want to make a deal. We think doing so is in your best interests, in your members’ best interests, in the best interests of our companies and in the best interests of the industry. But, as I said, no further movement is possible to close the gap between us so long as your DVD proposal remains on the table. In referring to DVDs, we include not only traditional DVDs, but also electronic sell-through — i.e., permanent downloads. As you know, we believe that electronic sell-through is synonymous with DVD.

“There are pending claims with regard to electronic sell-through that will be resolved through the arbitration process. But to make any new agreement with you, residuals for the DVD market, including electronic sell-through, must be paid under the existing home video formula.

The WGA responded:

“Today, just hours before the expiration of our contract, the AMPTP brought negotiations to a halt. The Companies refused to continue to bargain unless we agree that the hated DVD formula be extended to Internet downloads.

“This morning we presented the AMPTP with a comprehensive package of proposals that included movement on DVDs, new media, and jurisdictional issues. We also took nine proposals off the table. The Companies returned six hours later and said they would not respond to our package until we capitulated to their Internet demand.

“After three and a half months of bargaining, the AMPTP still has not responded to a single one of our important proposals. Every issue that matters to writers, including Internet reuse, original writing for new media, DVDs, and jurisdiction, has been ignored. This is completely unacceptable.”

In Variety, Dave McNary explains the issue:

The DVD dispute centers on the 1985 formula, under which homevid residuals were paid on the basis of 20% of wholesale revenues — equating to scribes receiving about 4¢ for each disc sold. The WGA’s seeking a doubling of that rate, asserting it agreed to a discounted deal two decades ago to help the fledgling business survive.

Studios and nets have steadfastly nixed any boost to DVD residuals, contending the revenues are crucial to moving film and TV projects out of deficit amid sharply rising costs.

The WGA’s also seeking to hike electronic sell-through revenue from1.2% of the licensing fee for each downloaded item to 2.5%.

Over at his blog, The Artful Writer, WGA scribe Craig Mazin pokes a hole (or, er, drives a Mack truck) through the AMPTP argument:

Electronic sell-through is synonymous with DVD?


DVD stands for Digital Video Disc (I think it was originally Digital Versatile Disc, but whatever).

That’s Digital Video Disc.


You buy a DISC.

When you download a movie, you do not buy a disc.

You do not buy the package for the disc.

You do not pay for the manufacture of the disc.

Nor do you own a disc.

You buy digital information. Ones and zeroes.

Internet sell-through is NOT DVD, it is NOT home video, and if that’s the game the AMPTP is playing on internet downloads, this is going to get a whole lot worse before it gets better.

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