DVD profits top contract negotiations list for actors union

December 13, 2004

This is interesting. It seems that the stellar sales figures of the DVD movie has become a sticking point between Hollywood's motion picture management and the venerable actors guild. Seems the box office hero's think that the profit landscape is changing and by golly, so should their salaries.

The distribution of DVD profit has caused a major snag in negotiations between Hollywood producers and actors. There is even some rumblings of a strike if things can't be worked out. Nobody in the "business" wants a repeat of the horror of the year 2000, which ended in a fairly long work stoppage.

"No one doubts that the actors have the power to shut down the town," said John Ptak, an agent at the Creative Artists Agency, which represents the actors Tom Cruise and Tom Hanks. "The question is and it's the one only the actors can answer if it's worth it to them over DVDs."

The Alliance of Motion Picture and Television Producers began meeting in Los Angeles last Monday with the combined bargaining teams of the Screen Actors Guild and the American Federation of Television and Radio Artists to hammer out a new three-year film and television contract.

DVDs are just the latest example of a technology that, like the 1970s videocassette recorder, Hollywood studios greeted with skepticism if not outright hostility only to see the breakthrough add to their bottom lines.

In 1996, the year before the home DVD player was introduced, consumers spent $6 billion buying VHS tapes, and $9.2 billion renting them, with the studios taking in 75 percent of sales and 20 percent of rentals.

In 2004, according to Adams Media Research, consumers will spend $24.5 billion buying and renting DVDs and VHS tapes. Almost $15 billion of that will be in DVD sales alone, almost 80 percent of which will go to the studios through their home entertainment divisions.

The explosion in DVD sales has changed the calculus of the Hollywood hit. Last year, "Finding Nemo" did $339.7 million in ticket sales when released to U.S. cinemas and then added $431 million in home retail sales and rentals, which include DVDs.

Despite the inflow of cash, the studios have refused to change a home video residual formula for the creative talent guilds that puts only fractions of pennies of each DVD sale into the hands of actors, writers and directors.

The producers successfully held the line on DVD profits in recent negotiations with directors and writers, but negotiators for the 120,000 members of the SAG and the 20,000 members of AFTRA have signaled their willingness to fight harder for their piece of the booming home movie pie.

Damn, give the hard working guys and gals a break there Hollywood; these actors are just trying to put beans on the table! It's kind of hard to do to - with a Rolls, a Leer Jet a host man servants! The cost of fuel alone is enough to drive some stars to a gate at Southwest Airlines just so they can make it to their next Botox session, or rehab clinic. Not to mention the cost of a villa on the French Riviera so as to try to escape those annoying paparzzi.

But seriously, for whatever reason, these DVD movies are on fire! I can count on one hand the VHS tapes I bought over the past years. But, I am addicted to collecting these darn DVD movies! Not to mention, all the high dollar trappings that go along with them like a home theater, surround sound etc. There is a heck of a lot of money to made, I guess we can't blame everyone for wanting a cut of the action. Heaven forbid that profits would be sacrificed in order to pass savings on to the consumer.

Source: The International Herald Tribune