Directors reach deal with Hollywood studios

The directors guild said late last year that it would delay the start of talks to give writers a chance to come to an agreement with studios.

But the guild clearly lost patience after negotiations between the writers and studios broke off last month and the strike dragged on.

Among other things, the studios’ deal with directors says:

• Programs produced for the Internet will be directed by guild members, with the exception of low-budget shows.
• Residuals for downloaded movies will be increased by 80 percent over the current rate paid by employers. Those payments will be based on a distributor’s gross, which the guild said was a key point in negotiations. (Distributors’ gross represents the amount received by the company responsible for distributing the film or TV program on the Internet.)
• Companies are contractually obligated to provide the guild “unfettered access to their deals and data,” the guild said, calling that unprecedented transparency.
• For ad-supported streaming of Internet programs, an initial 17-day free window will be followed by a requirement that companies pay 3 percent of the residual base — about $600 for a network prime-time drama — for 26 weeks of streaming. Companies can continue to stream for another 26-week period by paying an additional 3 percent, or a total of $1,200 for one year’s worth of streaming. During a program’s first season, the 17-day window is expanded to 24 days to help build audience.

In their talks, the writers guild and studios have clashed over using a percentage of a distributor’s gross receipts to determine Internet compensation.

The guild said it sought that approach but was told by the alliance it was an unworkable and unacceptable formula. Instead, the studios offered a flat $250 payment for a year’s use of an hourlong TV show on the Web.

The guild balked, citing the $20,000-plus residual that writers now earn for a single network rerun of a TV episode.

Also at issue for the writers guild is unionization of reality and animation writers.

Talks broke down after the alliance demanded the guild take that and other issues off the table, claiming there had been an agreement to drop it.

The guild’s next move may be influenced by history.

There’s a lingering resentment among members over what they considered raw deals in the 1980s involving what eventually became lucrative home-video and DVD markets.

The writers guild home-video deal was shaped by a deal made previously by the directors guild, following an industry practice of pattern bargaining.

That created resentment among some writers guild members toward the directors.

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