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Hollywood unions cry foul over Apple iTunes Store ABC TV Shows deals
Thursday, March 02, 2006 - 08:40 AM EST

"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.

MacDailyNews Take: 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

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Mar 02, 06 - 09:08 am Comment from: Deus Ex Machina

What did you expect from Unions anyway? Rational thinking?

Mar 02, 06 - 09:12 am Comment from: macnut222

"What did you expect from Unions anyway? Rational thinking?"

Or maybe to be ensured fair compensation for their work.

I guess ignorance is bliss. rolleyes

Mar 02, 06 - 09:15 am Comment from: Ed

How you watch them is not the issue.

Mar 02, 06 - 09:17 am Comment from: MacDude

This is a very good sign for Apple and the buisness of selling media content online.

If people are b*tching it means they see something of value.

With growth there is pain, if something is growing, it's worth making money off of.

If people are making money off of it, then this makes jobs, which gets more people involved.

I think I'll get a gun and start a war, if you can tell me what's worth fighting for. - Coldplay.

Mar 02, 06 - 09:17 am Comment from: 00011000

the macdailynews take completely misses the point of the article on this one. This one is about royalties to Directors and Writers, and not really specifically about iTunes either... they are really talking about legal digital downloads in general, and using "video iPod users" as an example.

Mar 02, 06 - 09:20 am Comment from: MacDude

iTunes Media Store

Subtle enough, still has "tunes" in it to tell folks it sells music, the primary seller of iPods.

"Media" to also tell folks it sells a lot more than that. It's also intrigues people to find out exactly what "media" is available.

Mar 02, 06 - 09:21 am Comment from: Tyk

What do you expect from unions?

Mar 02, 06 - 09:22 am Comment from: Someone else

This is not about the unions bitching. This is about the studios being greedy. Since there's virtually no "production costs" to speak of in terms of video downloads, and certainly no packaging or warehousing costs, the 80% cut for the studios is absurd. I know we all hear about the multi-million dollar contracts that some actors get. But the truth is, most non-big name actors get paid for very little when you average out the years. Royalty payments may be small potatoes for the big shots, but it's bread n butter for the little guys.

Mar 02, 06 - 09:32 am Comment from: ajg

Tyk - appropriate name for someone so thick. The unions are only pointing out the obvious inequity of the current DVD/VHS profit distribution deal as it applies to the new online distribution model. The embedded costs as well as the operating cost for online distribution are much lower and therefore the talent should get more of the profits. the deal should be renegotiated. Btw unions are the only reason we aren't alll working in sweatshops.

Mar 02, 06 - 09:34 am Comment from: Be fair

The cost for packing and distributing DVD's and VHS (in the early days) are gone. It seems to me that this compensation agreement may need to be revisited to ensure proper distribution of monies.

Mar 02, 06 - 09:40 am Comment from: Heidi

This story is BS. The rates and information quoted are inaccurate generalizations.

Besides packaging and everything else studios put up lots of front money to develop shows that never make the big time so there are plenty of costs besides "packaging".

Royalty arrangements are worked out in advance and agreed to, simple. It's a signed done deal.

So somebody sees this as an opportunity to try to extort more money after the fact. What a crock.

Actually my inside sources say the information that prompted this story isn't about the past, it's about setting new guidelines for the future. The half baked info in this article isn't worth the eyeball time.

Mar 02, 06 - 09:40 am Comment from: me

When full length motion PICTURE movies are available on iTMS, it will HAVE to change it's name.

I like MacDude's "iTunes Media Store" suggestion because it is subtly different, but that too it the problem. It isn't different enough to convey all the stuff there. iTMS currently sells:
- audio singles and albums
- Podcasts
- books/speaches/et Audible content
- half hour (22 min) and hour (45 min) long TV shows
- short films, sports highlights, stand-up, etc

When movies are added, the store will need to morph into something that is Apple/iPod/Mac branded but also conveys the bredth and depth of the digital media offerings. iTunes may need to change its name too!

Mar 02, 06 - 09:49 am Comment from: Master Thespian

All I can say is that my talents are highly recognized, and I'm duly compensated for "ACTING!"

But, in virve-de-spirité with my fellow actors of lesser talent, I do agree the studios get too much money.

The only thing is, the money should be in proportion to the size fo the screen in pixels. So the tiny iPod video screen does not equal the 102" plasma - where my acting skills can be duly recognized.

Of course, I don't believe this hooey. I was merely "ACTING!"

Master Thespian...

Mar 02, 06 - 09:52 am Comment from: ron

Unions have outlived their usefulness. Just look at what they've done to the US auto industry---down the tubes. Unions have taken our education system down the drain. Vouchers are the only way back to excellence for our children. The best leveler in the unionverse--lowest level, that is.

MW-enough--don't you just love it?

Mar 02, 06 - 09:58 am Comment from: sound reason

Hey-- guess what? We can digitally record the TV shows FOR FREE!! Why are we paying for free crap? Hey, Actor's Guild-- you'll get minimum wage and LIKE IT!! Actors's aren't paramedics, teachers etc-- why should they get more $$??

Mar 02, 06 - 10:01 am Comment from: db

"Tyk - appropriate name for someone so thick. The unions are only pointing out the obvious inequity of the current DVD/VHS profit distribution deal as it applies to the new online distribution model. The embedded costs as well as the operating cost for online distribution are much lower and therefore the talent should get more of the profits. the deal should be renegotiated. Btw unions are the only reason we aren't alll working in sweatshops."

AJG, you are ignorant.

It is the free market system that allows for fair compensation. Unions hurt this model in the long run... this is really no use, you are obviously a union member or the son/daughter of one. I recommend you take a Economics class, or two.

Mar 02, 06 - 10:18 am Comment from: Big Al

There are no extra production costs but there is no extra union work involved either. It's like an autoworkers union asking for money from used car sales. They've already been paid for the origional work.

While the labels and the studios are greedy bastards, the various other non creative organizations who have their fingers in the pie can be just as greedy.

Mar 02, 06 - 10:18 am Comment from: M.X.N.T.4.1

iTunes really needs a rebranding, personally I've already shifted my library out of my music folder and into an all purpose media folder in my home directory. Music is now free to store stuff I don't need/want in my library. And any Garageband stuff I may create, if I could make music, or wanted to.

Mar 02, 06 - 10:28 am Comment from: the other other Mark

Actually, I think you'll find the reason the US auto industry went down the tubes is that the products, whilst having a low sticker price in comparison to Europe, are - pardon my French - shit (and I'm being charitable).

Cheap plasticky interiors, suspension that was developed in the Fifties, unbelievably inefficient engines that have completely ignored the multi-valve revolution, quality control that sucks.

Mar 02, 06 - 10:59 am Comment from: Go ahead, Make my day

Big Al Small Brain:
Writers, directors and actors have negotiated legally for residuals thru their unions for their work being sold thru other media. This is a new media which hasn't been legally formalized yet possibly violating collective bargaining agreements between studios and unions.

There was a time not long, long, long ago in this galaxy in which writers, directors and actors received no residuals.

Auto workers haven't negotiated for residuals, you fool.

Mar 02, 06 - 11:11 am Comment from: dennis

"It is the free market system that allows for fair compensation. Unions hurt this model in the long run... this is really no use, you are obviously a union member or the son/daughter of one. I recommend you take a Economics class, or two."

You're "poisoning the well." Whether or not someone is a union member has no bearing on the merits of the argument.

Wal-Mart clamps down on any attempts at employee unionization, and look how successful they are! Well, yes, but do they then pass that success on in the form of fair compensation? No (by many accounts). So why doesn't the competition scoop up Wal-Mart's employee's with better pay? Because (a) there is no competition after Wal-Mart came into town; or (b) the other guys want to pay crappy wages, too (or they have to in order to compete).

The name of the game in big business today is profit at any cost. There's little evidence that letting the corporations call all the shots leads to prosperity for anyone except the executives and stockholders.

Mar 02, 06 - 11:18 am Comment from: Greedy Scum

FucK 'em! this is one of the most lucrative and overpaid industries on the planet. i feel little for FAG (gotta love Team America). The only people who need a voice here are those myriad "behind the scenes" cameramen lighting etc. BUT i feel it's their job to negotiate better percentages from FAG. ie..less to leading men/women and more to everyone else involved. Still/as always producer retains lion's share. This is a capitalistic system. Reward goes to those who take the risk...the producers...whine about that all you want but that's an underlying truth to capitalism. Unfortunately the hundreds of hard workers on a film are being screwed by the one or two lame ass "pretty faces" on their film. Apple is NOT the problem. the problem is FAG itself.

Mar 02, 06 - 11:37 am Comment from: db

Dennis,
It is the very success of American corporations that have Americans getting paid higher than most every other country. Wal-Mart may not pay its employees a high wage, but how about all of the companies that have gotten rich making/providing products to Wal-Mart? The bottom line is... the more successful business is in America, the more successful the entire society is. We are currently living in the PROOF.

Wal-Mart can also not only be measured by what it pays its workers. IF you did all of your shopping at Wal-Mart over a years time you would find that you are literally saving THOUSANDS of dollars. Do any of the critics take this into consideration when they say that wal-mart is evil?

Here is a great idea... move to Norway (another high paying society, different fromthe USA only because of the high number of unions and socialist government)There, you will find that when you go out to eat dinner at a restaraunt that it costs twice as much as it does in the U.S. It is not as simple as you and the 'pro-labor' crowd would like to make it out to be.

Now, monopolies are another story... If you can successfully argue that Wal-Mart/Microsoft is a monopoly, then you have a point. If there is not competition, there is no free market.

Mar 02, 06 - 11:43 am Comment from: dennis, get a clue

Your economic ignorance is breathtaking. It's silly to suggest that Walmart doesn't "fairly" compensate its employees on the one hand and then to suggest that other competitors "have to" pay the same low wages in order to compete with Walmart. Think about that. If the competitors can't afford to pay more, than there's no reason to think that Walmart can afford to pay more! The other dopey notion you offer--that the competitors are equally unjust and also don't want to pay their employees more doesn't add up either--if any of them were making "excess" profits, it would be to at least one competitor's advantage to either lower prices to undercut the others or to pay higher wages/benefits to get more productive/skilled employees (if the added productivity were worth the additional cost). This whole notion is just propaganda from unions that haven't been able to crack Walmart, which by the way has been one of the greatest anti-poverty programs in the history of mankind, offering working class families affordable goods. That's clear to anyone who isn't blinkered by ideology.
Kate
MW: "million," as in the millions of low-income and working class families that benefit from Walmart every day

Mar 02, 06 - 12:10 pm Comment from: pino

The "minimum wage" is a joke and should be abolished.

It's only function is as a liberal social engineering tool.

Let the market forces decide what a job is worth. Then, if Sprawl-Mart wants to pay only $3.00/hour . . . and they get enough employees to work for that amount . . . who cares?

But the point is, they WON'T be able to pay that amount. So, the market decides that the fair wage has to be higher, so that Sprawl-Mart can keep its stores running with employees who actually show up to work, smell clean and are courteous.

Let the market decide.

Mar 02, 06 - 12:25 pm Comment from: db

you are exacly right Pino. It sounds mean, and unjust... but people don't understand that they would be better off. There are so many examples in history of how the strong hand of government ruins societys, but nobody cares to listen.

Liberals are all knee-jerk reactionary morons who can't look 2 feet past their own nose.

Mar 02, 06 - 12:27 pm Comment from: Random Guy

I'm normally no great fan of unions, but even this hardcore Free Marketeer will say that these guys have a valid claim to some share of the additional studio revenues that flow from downloads.

"Auto workers getting paid for used car sales when they've already been paid for the work" doesn't quite hold up as an argument for me. Ford doesn't get paid for the sale of a used Focus. But, BIg Giant Studio *does" get paid new money for delivering a TV show or movie in a different format or method of delivery. The parties may disagree about the percentage (as they do here), but it seems only fair that Big Giant Studio share *some* of that added revenue with the people who produced the content for them, especially since the precedent of that sharing has been established in other areas.

Mar 02, 06 - 12:45 pm Comment from: Klaatu

Apple's iTunes Music Store (a store which grows increasingly in need of a new name with each passing day, by the way)

iTMS = iTunes Media Store. There. Problem solved.

Mar 02, 06 - 01:05 pm Comment from: LordRobin

I don't like "iTunes Media Store". The term "media" is too dry. It sounds like something Microsoft would come up with.

My guess? They'll eventually drop "Music" and just call it the "iTunes Store". Hell, most mainstream consumers just say "iTunes" to refer to the store anyway. The ads on the TV networks reminding you to buy their shows usually just refer to the store as "iTunes".

We now return you to "Liberals vs. Conservatives: Death Match", already in progress...

Mar 02, 06 - 01:19 pm Comment from: db

Examples of 'knee jerk':

1. There are poor people.
"oh wow, we need to give them money... as much as we can. They need to survive don't they? After all, they have 3 kids to take care of, and they have to pay rent!"

How a conservative sees the problem:

2. You give a man a fish, and he eats for a day. You teach a man to fish, and you feed him for life.
"oh wow, we need to find a way to get them jobs. They need to survive, but they also need to be self sufficient and personally responsible. If they have 3 kids we need to make sure that they can have a good job and be able to teach those kids the value of a honest days work, which will attempt to stop the cycle. and by the way... don't let those morons pay rent! They need to purchase a house, and pay off a mortgage. Ownership is key, not paying $500/month and having nothing to show for it."

Mar 02, 06 - 01:36 pm Comment from: ajg

db - You recommending others take economics is the height of irony. Did you just read Ayn Rand or maybe the Libertarian party platform or do you really just believe that corporations are looking out for the good of the people? Either way you're two dimensional perspective of the world does not reflect reality. All you need do is actually read and understand the history of the USA to realize that what you're advocating is rubbish. The playing field is not level, never has been never will be. Is there a perfect system? No. The question is always to look for what is equitable and best for society in both the near term and the long run.

Communism doesn't work as it ignores the inherent greed and power lust of the individual and Libertarianism (read unchecked capitalism) doesn't work as it unquestionably celebrates greed and power lust. Thus the need for rules, regulations and even unions to bring about just solutions to issues such as who gets what from the profits on online distributed media.

Mar 02, 06 - 02:18 pm Comment from: coolfactor

Apple is positioning Front Row to be a replacement for iTunes Music Store, at least for the video side of things. In a future update, you'll be able to purchase content directly from Front Row.

Mar 02, 06 - 02:58 pm Comment from: iggyb

Unions whining. Shocker.

Mar 02, 06 - 03:03 pm Comment from: iggyb

Actually, I think you'll find the reason the US auto industry went down the tubes is that the products, whilst having a low sticker price in comparison to Europe, are - pardon my French - shit (and I'm being charitable).

Cheap plasticky interiors, suspension that was developed in the Fifties, unbelievably inefficient engines that have completely ignored the multi-valve revolution, quality control that sucks.

Hey other other Mark...parts are being made all over the world, and what you see in a Ford might be the same as you see in a Mazda.
However, the billions that Ford pays to retired workers every year (some in excess of $100,000 in payment and benefits annually) is particularly draining. Not that Ford hasn't done a whole slurry of other problems, but the unions have definitely contributed to the downfall.

Mar 02, 06 - 03:04 pm Comment from: iggyb

Whoops, the first two paragraphs in my last post are supposed to be in quotes from Other Other Mark...

Mar 02, 06 - 03:06 pm Comment from: db

ajg,

I never once said that corporations are looking out for the good of people. Corporations are greedy, and thank God! The number one goal of business is to have success, survive, and make money. This is how it should be, and this is what makes our society prosper. This success is the means to the end. The 'end' is a society where the majority is living in good conditions with a high quality of life.

You point me to the history of the United States... how would you say that we have come to this period of wealth in our country? Socialism? Communism?

Mar 02, 06 - 03:25 pm Comment from: davida

our economy is designed to make money, not jobs, and that it is doing well, especially for the top 1%. The middle class is shrinking, when it's gone, the whole thing collapses, not fun. GM and Ford's problems stem from the fact that they forgot how to innovate car production, and instead fixated on their 'banking business', i.e. fast, easy credit via GM financing, and Ford Credit. why mention only the union workers retirement costs without a word on Golden Parachutes for ex-excutives?

Mar 02, 06 - 04:17 pm Comment from: Re: coolfactor

"Apple is positioning Front Row to be a replacement for iTunes Music Store, at least for the video side of things. In a future update, you'll be able to purchase content directly from Front Row."

Haha...Sounds nice but i can't imagine entering my iTMS password with that silly little Apple Remote.

Mar 02, 06 - 06:28 pm Comment from: effwerd

god made man to serve the economy.

Mar 02, 06 - 07:13 pm Comment from: iMacUk

it's interesting to skim the opposing posts re the unions. in the blue corner we have a bunch of folks who say that greed is good (in corporations) and that it further breeds success. and in the red corner we have a bunch of folks who say fighting for more money (which is in itself greed) is wholly justified and good.

therefore, although they are saying different things, they are in fact agreeing (greed is progress).

there we go, everyone's on the same side. isn't that nice

MW:soon - soon, all arguments will be made this way

Mar 02, 06 - 09:03 pm Comment from: Bubba

What I don't understand is royalties. If I work for a highway construction company why shouldn't I continue to be paid by the drivers using that road. That's the same as a actor getting paid each time a movie is shown. There are many examples one could use.

Actors were well remunerated when they made the move, save your money make another film. Don't expect to be paid over and over again for the same work. Same goes for the movie and music houses as well.

Personally, because of the movie and music industry attitude I've quit going to the movies and purchasing music. For my entertainment and enjoyment I'm spending my disposable money in other areas.

Mar 03, 06 - 06:12 am Comment from: iMacUk

Bubba, that's because there's only one road which people share.

if you make a movie and only ever sell one dvd which gets passed around from person to person you only get one payment then too.

if you sell 1000 copies of your movie, you would expect each of the 1000 purchasers to pay the same, even though you already made to movie - yes?

now all you need to do is extend the 'me the movie maker' to 'us the movie makers' as no major movie is made by only one person.

i know i have simplified it but that's it in principle

MW : shown

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