Negotiating Pivotal Contracts in the Age of New Media

The following article appears in the February 2018 International Musician. For a rapidly growing list of New Media projects that were scored AFM, please visit “Have Your Heard” at rmala.org, and note the many entries for Netflix, Amazon and Hulu.

Our AFM negotiates three major filmed media contracts, the Motion Picture, Television Film and Live TV/Videotape contracts. Together, these CBA’s are responsible for over 150 million dollars of AFM wages, and support the livelihoods of thousands of AFM musicians. This year, we are facing pivotal negotiations for all three, and since all of our electronic media contracts are interdependent and intertwined, there will be historic consequences for our shared futures. President Hair has written a series of columns over the past few months that give a strategic overview of trends in recorded media, which I recommend that you review. This column is focused on the immediate here and now of our contract negotiations.

Unions representing directors, writers, actors and others who work on film and television shows negotiated significant improvements in New Media in 2017. For all of us in the industry, it has become clear that New Media is both the future and the present.

  • “Disney Makes $52.4 Billion Deal for 21st Century Fox in Big Bet on Streaming“
    nytimes Dec. 14, 2017
  • “Disney to end Netflix deal and launch its own streaming service”
    The Verge Aug 8, 2017
  • “Cannes film festival takes on Netflix with new rule”
    The Guardian May 11, 2017

We are facing a seismic shift in the way filmed media is produced and distributed. More and more, our jobs will come from projects created initially for streaming, rather than for theaters, networks or cable. How will professional musicians be able to make a sustainable livelihood?

We know that recording music budgets are generally shrinking, and that music budgets for New Media are even tighter. In film & TV, musicians’ wages are now almost always dependent on composer’s packages, rather than studio budgets. What can we accomplish in these negotiations that will allow us to make a living in this new environment?

The other unions negotiated increased residuals for all types of New Media, as well as sharply shortened streaming windows before residuals are triggered. They also negotiated substantial residuals for Advertising-based Video On Demand (AVOD), such as YouTube, network websites, etc.  Payments for Subscriber Video On Demand (SVOD) will now be subject to sliding residual scales based on the number of subscribers the service has; for example, Netflix will pay a higher residual rate as a result of having more than 20 million subscribers. The other unions have also moved from freely negotiated scales (which still prevail for low budget streaming projects) to set wage scales for High Budget SVOD (HBSVOD).

Each of our sister unions negotiated up-front wage increases, as well as different methods of increasing contributions to their respective health and pension funds. Three years ago, film & tv musicians voted to send 1.5% of our residuals fund as an unallocated contribution to our pension fund. The AFM has prioritized strengthening our U.S. pension fund in each of our other AFM recording contracts as well.

Over the coming months, we will continue to reach out to the musicians who work under these contracts so that their voice can be heard. However, this round of negotiations in 2018 will impact every AFM member in the long run, and our greatest strength lies in our solidarity.

Glossary:

  • AVOD – Advertising Based Video On Demand (YouTube, websites, no subscription fee)
  • SVOD – Subscription Based Video On Demand (Netflix, Hulu, Amazon, etc.)
  • HBSVOD – High Budget Subscription Based Vido On Demand (Programs made for SVOD that have budgets equivalent to theatrical and broadcast television programs)
  • Diginets – Secondary Digital Channels (the multitude of channels playing older library programs that broadcast networks run, available for free as broadcast digital channels)
  • FMSMF – Film Musicians Secondary Markets Fund
  • AFM-EPF – The AFM’s U.S. Multi-Employer Pension Fund

– Marc Sazer, RMA President

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