Online video studios like Revision3 and Break.com have been cutting jobs left and right because they still haven’t figured out how to make serious money. Yet the Hollywood actor’s union, the Screen Actors Guild, and Hollywood studios are locked in an intractable battle about how actors should be compensated for web shows.
Some SAG leaders want online actors to work under a union contract. Studios say they can’t afford to pay what the union wants, because online shows aren’t making much money. Most third-party estimates put total online video revenue from such shows in the tens of millions, not billions.
But it’s not like the studios are in the right here, either. For starters, some have yet to pay Hollywood writers the new media money they’d agreed to pay after last year’s writer’s strike was resolved. Bigger picture, SAG remembers failing to negotiate studio contracts that took into account the boom in cable television and home video, years ago. It wants to avoid a repeat with online video — surely, even if online revenues aren’t here now, they will be one day.
How well does Hollywood’s worker-vs-owner industrial model, currently in action, apply to the web? Not very, if what’s happening to print media is any indicator. Newspapers had unions, while web-based news publications don’t. The newspaper employment dynamic was based on a publisher owning the printing press and using that power to dictate wages and content. Online publishing is not analogous. There’s no printing press to own, which dilutes a publisher’s bargaining power. Online publishers make nowhere near the amounts that newspapers used to — online advertising revenue will only total around $22 billion this year, with much of that going to Google and other non-publishers. Print newspaper advertising has fallen from a record $48.7 billion in 2000 to $42.2 billion in 2007 — a downward trend that’s accelerating this year. There’s not much online money to fight over, these days, and as the print industry’s revenue contracts, any online job becomes more precious to an individual journalist.
Hollywood studios and its unions of actors and writers will continue to duke it out for new media revenue for as long as they can. But long-term, the very structure of online media will reshape everyone. Studios will have to better compensate any actor who makes money for the company, or risk them being recruited to rivals who can pay better; unions will have to continue lowering their demands, or risk becoming obsolete. An anecdote in a recent Los Angeles Times article on the SAG fight with studios illustrates this dynamic already in effect:
Some Web producers, however, have balked at signing SAG contracts. Paul Kontonis, chief executive of For Your Imagination, which produces and distributes Web shows, said SAG wanted his company to become a signatory because a union member stars in its Internet show “Kyle Piccolo,” about a bookstore clerk who dispenses therapy to his customers.
But Kontonis said that wasn’t an option because the cost of paying into the union’s health plan, when balanced against his $30,000 budget for the entire seven-episode series, was prohibitive. For future shows, Kontonis said he wouldn’t be hiring SAG actors.
As in the natural world and in free markets, fewer resources means increased competition — and only the most fit will survive. As a result, some union members are at least concerned about the timing. From the Wall Street Journal:
A big issue is whether SAG leadership will be able to persuade enough of its members to vote for strike authorization. The union’s ranks have long been divided across geographical and political lines, and many SAG members are launching quiet campaigns against issuing a strike authorization. Now, some union members are expressing strong skepticism at moving toward a walkout amid a global economic slump.