LOS ANGELES – Hollywood's rush to offer programs on the Web, iPods and cell phones may be slowed by growing resistance from writers and actors who want a bigger slice of revenues from digital media.
Compensation for digitally delivered media threatens to be among the more hotly debated topics in contracts talks with unions representing writers, actors and directors over the next two years and could hold up some studios' plans, industry experts said.
"There's a lot of confusion out there for the Screen Actors Guild, along with the other guilds, like the Writers and Directors' Guilds," Mike McNulty, national director of communications for SAG, told Reuters.
"There's a lot of gray. The real crux of the thing is which formula the studios are going to pay under," he said.
The studios and talent are currently operating under labor contracts that pre-date the latest technologies and are ambiguous in terms of what pay structures should apply to content delivered beyond television or movie screens.
Writers' contracts expire in 2007, and the actors' and directors' contracts expire in 2008.
Generally, studios say it is too soon to establish new formulas for these ventures, or in many cases they say they need not pay extra to writers and actors as they are simply streaming programs online for promotional purposes.
DIFFERENCE OF OPINION
"We're at the earliest stage of seeing the influence and impact of this new media on audiences, advertising, piracy and on our traditional business models," a spokeswoman for the Alliance of Motion Picture and Television Producers (AMPTP) trade group, said. "Some of these things are strictly promotional," she said.
But writers argue they should be compensated and that the networks do, in fact, reap advertising dollars from streaming their works online even if they call it promotional.
"There is a difference of opinion regarding whether or not writers should be compensated for something promotional. Just by calling something promotional doesn't mean there shouldn't be residuals," said Charles Slocum, assistant executive director of the Writers Guild of America.
General Electric Co's (GE) NBC.com earlier this month said its ad-supported "NBC Rewind" video player, which lets viewers watch prime-time episodes, reached nearly 4 million streams in its third week of its release.
Writers, actors and studios are also at odds regarding compensation for movies or shows sold or downloaded through services like Apple Computer Inc's (AAPL) iTunes.
Studios support the pay formula established about 20 years ago for home videos, while actors and writers want the higher rates earned under formulas for businesses like pay-per-view TV.
Under the home-video formula, studios or distributors keep about 80 cents of every wholesale dollar earned on videos sold, while the remaining 20 cents is split between the talent and the producer or studio. But writers and actors have complained they are underpaid under that formula.