“The volatile issue of how writers, directors and actors are to be paid when TV shows are downloaded is heating up again, with their unions accusing the ABC network of violating collective bargaining agreements,” Richard Verrier reports for The Los Angeles Times. “The Screen Actors Guild, the Writers Guild of America, West, and the Directors Guild of America all issued statements this week criticizing the Walt Disney Co.-owned network for deciding to pay residuals on TV episode sales to video iPod users under the same payment formula for DVD sales.”

Verrier continues, “That interpretation has angered guild leaders, who contend that Hollywood talent is getting shortchanged by an antiquated formula. They said networks should pay a more generous rate when consumers purchase shows online. The union leaders threatened to file claims. Under the current DVD formula, producers retain 80% of home video revenue to cover manufacturing and other costs, and actors, writers and directors receive a cut from the remaining 20%… Labor leaders don’t want to repeat what many view as a big mistake when negotiators in the early 1980s agreed to the video formula. At the time, studios contended that the rate was crucial to getting the then-fledgling videocassette business off the ground. The guilds then watched as VHS, and later DVDs, mushroomed into a multibillion-dollar-a-year, highly profitable business for the studios.”

Full article here.
Just a note that the sales are actually to iTunes Music Store (iTMS) users, not “video iPod users” as written in the first paragraph. iTMS TV show watchers might happen to own a 5G iPod or they might not. Of course, you don’t even need an iPod to watch the shows you purchase from Apple’s iTunes Music Store (a store which grows increasingly in need of a new name with each passing day, by the way), you can watch them on your computer or on your TV if you hook it up your Mac or Windows PC. As for the issue at hand, hopefully all who contribute value to the process will be fairly compensated.

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Related article:
Hollywood unions want slice of Apple’s video pie – October 14, 2005