Move to be approved by SAG, AFTRA members
Leaders of SAG and AFTRA have agreed with the ad industry on a deal to extend the commercials contract by two years in order to conduct a jointly funded study on the fast-changing revenue models for the ad biz.The extension, announced Friday, will have to be approved by SAG and AFTRA members. The move was not a surprise since both sides had agreed to the general outlines of a deal four months ago (Daily Variety, April 12). SAG and AFTRA leaders were willing to agree to the extension in order to support the study, given the recent proliferation of platforms for advertising such as iPods, cell phones, video-on-demand and embedded commercials. Extending the contract preserves the current model of paying SAG actors for primetime TV ads via residuals. The ad industry has been floating the idea of replacing residuals with a $19,000 buyout that would cover a year. The extension will include the following provisions:
- Coverage of all commercials that appear in new media–for existing platforms such as cell phones and for future platforms yet to be developed.
- A 6% increase in minimum rates and the employers’ contribution to pension and health plans will increase from 14.3% to 14.8%.
- Advertisers will have “more flexibility” to edit commercials for the Internet and new media.
- A new media committee, comprised of reps from both the unions and the industry, will be formed with the power to make adjustments to the agreement to accommodate changing technologies and “shifting paradigms.”
- Advertisers will be able to move over TV commercials to the Internet and other new media for a lower rate for a year.