Hollywood unions cry foul over Apple iTunes Store ABC TV Shows deals

“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.

Apple’s brand new iPod Hi-Fi speaker system. Home stereo. Reinvented. Available now for $349 with free shipping.
Apple’s new Mac mini. Intel Core, up to 4 times faster. Starting at just $599. Free shipping.
MacBook Pro. The first Mac notebook built upon Intel Core Duo with iLife ’06, Front Row and built-in iSight. Starting at $1999. Free shipping.
iMac. Twice as amazing — Intel Core Duo, iLife ’06, Front Row media experience, Apple Remote, built-in iSight. Starting at $1299. Free shipping.
iPod Radio Remote. Listen to FM radio on your iPod and control everything with a convenient wired remote. Just $49.
iPod. 15,000 songs. 25,000 photos. 150 hours of video. The new iPod. 30GB and 60GB models start at just $299. Free shipping.
Connect iPod to your television set with the iPod AV Cable. Just $19.

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


  1. “What did you expect from Unions anyway? Rational thinking?”

    Or maybe to be ensured fair compensation for their work.

    I guess ignorance is bliss. ” width=”19″ height=”19″ alt=”rolleyes” style=”border:0;” />

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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!

  10. 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…

  11. 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?

  12. 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 $$??

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.