Thousands of showbiz scribes have recently received a nickel in the mail as a symbolic reminder of where they stand on DVD payouts.
Amid a news blackout on contract negotiations, the Committee for an Informed Membership of the Writers Guild of America East has mailed out a DVD-sized cardboard sleeve showing three figures — $16 for the studio’s average wholesale price for a DVD; $10.55 for the studio’s profit; and 5¢ for “your share.”
The envelope says, “Your share of the $15 billion DVD gold mine is enclosed.” The sleeve’s artwork shows a smiling studio exec holding dozens of dollar bills in one hand and a nickel in the other; each sleeve contains an actual nickel.
Though neither side was commenting after two weeks of negotiations, the WGA has pushed the DVD issue to the forefront of its demands from studios by asserting the old formula needs to be more generous to writers. It’s using figures from Merrill Lynch analyst Jessica Reif Cohen, who wrote last year that studios were operating on a 65% profit margin on DVD compared with 45% for videocassettes.
As with the other Hollywood unions, the WGA is stuck with a two-decade-old formula that excludes 80% of revenues from residuals calculations in most cases; studios insist they need those DVD dollars to remain financially viable amid soaring filmmaking costs.
Studio execs also maintain that a hike for the WGA probably would force them to increase homevideo/DVD residuals for the other unions by a multiple of 10 in subsequent negotiations.
DVD revenues totaled $16 billion last year, with videotape’s total $6 billion; the WGA has estimated its members took in $51.5 million last year in residual payments from DVD and video. The guild has been attempting to broaden the impact of the issue by stressing the booming business in DVD versions of TV shows.
In a WGA member outreach meeting last week in Los Angeles, writers largely echoed DVD, healthcare costs and jurisdiction over reality TV as key issues. The WGA West will hold four more such confabs this week in Los Angeles.
Negotiators, who face a May 2 expiration of the current three-year contract, are scheduled to relaunch negotiations today after breaking for the weekend; they plan to meet every day this week.
During the 2001 negotiations, bargaining started in mid-January, broke in early March for a month and then went three days past contract expiration before a deal was reached. The WGA gained increases in residual rates for Fox, made-for-pay TV and foreign but failed to obtain gains in DVD other than a $5,000 one-time fee to screenwriters for the right to include the screenplay on the disc.