Hollywood talent want share of digital media

Digital royalties are now in hot debate and could affect the speed of future migration to alternative media platforms.
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Professional writers and actors say they are due more money if their programs are distributed to new media, including the Web, mobile phones and iPods.

Digital royalties are now in hot debate and could affect the speed of future migration to alternative media platforms, industry experts said.

Labor unions representing TV and motion picture writers, actors and directors will be negotiating new contracts during the next two years. Each is now grappling with compensation issues involving digital media.

Today’s labor contracts pre-date the latest digital media technologies and are mostly ambiguous as to the rights of the talent and the studios. The contract for Hollywood’s writers expires in 2007, and current pacts with actors and directors are up in 2008.

Some studio executives argue that it is too soon to create new pay scale formulas that reflect digital media. Others say the talent is due no more money because online use of programming is simply an extension of promotional use.

“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), told Reuters. “Some of these things are strictly promotional.”

However, writers — usually the first to negotiate new contracts — contend online use of their programs is beyond promotional. The networks are already generating advertising revenue from streaming media, they say.

The talent and studios are also debating compensation for movies or shows sold or downloaded through services like Apple Computer’s iTunes. The studios contend that the 20-year-old pay formula for home video applies, while the talent is demanding the higher rates they earn under formulas for services like pay-per-view.

Reuters reported that 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.

Even that formula is under dispute. Writers and actors complain they are underpaid when the current home video formula is applied.