DVD issue looms as WGA pact nears end

News blackout, sparse info on talks keep biz anxious

With their contract expiring this weekend, studios and showbiz scribes have launched what’s expected to be the final push toward a deal.

Reps of the WGA and the Alliance of Motion Picture & Television Producers held face-to-face negotiations Tuesday morning at WGA West headquarters in Hollywood after a day of subcommittee confabs.

Both sides adhered to the 3-week-old news blackout and gave no details as to the substance of bargaining other than saying that issues discussed included character and sequel payments and reacquisition.

Sources close to the talks said the potentially explosive issue of DVD residuals was expected to be discussed for the first time since negotiations began April 5. “DVD has really put the WGA negotiations on everyone’s radar,” one showbiz attorney opined.

Writers are aggrieved that the guild’s residual formula for video and DVD has remained unchanged for two decades. But studios are adamant they can’t hike DVD payouts, asserting sales of the discs are crucial to remaining financially viable amid soaring filmmaking costs.

DVD-only sales and rentals totaled $5.05 billion in the first quarter, up 44% from the 2003 first quarter, according to Variety sister publication DVD Exclusive. Combined first-quarter spending for DVD and VHS hit $6 billion this year, up 5.3% from the same period of 2003.

The WGA has placed DVD as the centerpiece of its demands along with improved health-care contributions and jurisdiction over reality shows. But the combination of studio resistance over changing the DVD rates and the WGA’s feisty stance has prompted concerns that the talks could fall apart on that specific point.

In 2001, the WGA nearly walked away from a deal over the studios’ refusal to hike the video-DVD residual. The guild decided instead to accept a one-time $5,000 payment for the right to include the screenplay on the DVD.

With the current three-year contract expiring at 12:01 a.m. Sunday, the drawn-out negotiations and the dearth of disclosure has stretched the nerves of WGA members, agents and execs — even though the consensus is that a WGA strike remains unlikely since the guild’s done little to prep for a work stoppage.

One tenpercenter noted that the guild has made no effort to inform the agent community as to specifics of strategy and demands. That’s a marked contrast with 2001, when the WGA held extensive outreach meetings to build support among agents for its positions.

“We haven’t had any kind of communication whatsoever with the guild,” one tenpercenter noted. “I have to admit that I’m somewhat surprised.”

Still, industry veterans note the threat of a WGA strike can never be completely discounted, since the guild has staged eight strikes since 1960. The most recent came in 1988 and lasted five months.

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