TV, Film Agreements Extended Again; Contract Streaming Fight Begins

May 2, 2019

Ray Hair  -  AFM International President

On March 18, after a week of intense negotiations, an agreement was reached with major Hollywood film producers and their television film counterparts to extend the existing Theatrical and Motion Picture Film agreements until November 14, 2019, with a 2% increase in wages. As was agreed one year ago, the parties deemed a short-term contract solution as the better alternative to the existing deadlock resulting from the producers’ failure to adequately address the Federation’s goal of creating residual payments for films and content made originally for streaming platforms.

The opening day of negotiations began with powerful personal stories told by talented musicians whose livelihoods have been substantially supported by film and media agreements. These musicians explained, better than anyone else possibly could, how the current industry trend toward a distribution model lacking a residual compensation base would dramatically and negatively impact their lives. Future generations of new musicians would not be able to sustain a mainstream lifestyle, support their families, or retire in dignity.

For the first time, the studios did propose a streaming residual for content made for new media, but the proposal was far from adequate. The studios think that, because scoring occurs in the post-production phase of filmmaking, musicians should be treated like any other craft unit instead of like the performers we are. The studios are afraid that, if they were to agree to a fixed percentage residual resulting in real money for musicians, IATSE (the union representing stage employees) would seek to pattern-bargain the same percentage structure. That would result in a substantially greater obligation for the studios, given that IATSE typically renders services for a much longer period of time on a production, thus generating much greater wages.

The producers’ made for new media proposal to the Federation would have provided a one-time payment of 1% of all wages earned, paid pro-rata to the musicians involved in scoring. For example, on a scoring budget of $250,000, the producer would pay a total of $2,500. After an administrative expense deduction of 20%, the remaining $2,000 would be split by all participating musicians. If there were 100 musicians on the session, that would yield a single payment of no more than $20 per musician.

Not only is the money inadequate, but the proposed payment would apply only to high budget subscription video-on-demand (SVOD) programs of at least 96 minutes or more that are subsequently released in theaters in the US or Canada, where an admission fee is charged. In such circumstances, only a small fraction of streaming productions would even be covered.

The Federation counterproposed a fixed residual following a 90-day window, with percentages starting at 35%, and declining annually thereafter, modified by established subscriber tiers on an initial residual base of $1,000. Assuming 12 years of exhibition, each musician would receive $1,815 over the 12-year period. Additionally, the Federation proposed payment on high budget advertiser-supported streaming (AVOD). However, the producers rejected these proposals, which could have paved the way for acceptable payments and also significant new revenue for the AFM pension fund from television, film, and other content exhibition via streaming.

Musicians are creative artists who contribute as much value to a film as the actors, writers, and directors. We deserve compensation that reflects our value. As streaming consumption has grown, television networks and film studios have agreed to make residual payments and increased pension and health contributions to actors, writers, and directors, when content is made for streaming, but musicians have been uniquely excluded. That is unfair and unacceptable. The Federation will continue to fight hard for revenue from streaming that is more closely aligned with standards achieved by other performer guilds.

We will reconvene our negotiations in November. But in the meantime, the AFM International Executive Board (IEB) has voted to endorse and approve a budget and plan for a Federation-wide organizing campaign designed to persuade film, TV, and content producers that a fair revenue share from streaming must be addressed. Producers must agree to adapt our contracts to changes in technology by ensuring that we maintain good jobs, secure increases in contributions to our pension fund, and a rightful place in the future of media.

In my March 12 morning address during the prenegotiation rally outside the doors of the producers’ offices, I stated that the economy of streaming media is booming, but those of us who make the music—instrumentalists, composers, copyists, arrangers—are not receiving our fair share of the pie. Digital revenue in the entertainment and media industry totaled $616 billion worldwide in 2013. That figure is expected to top $1 trillion this year.

Under the Federation’s recent Sound Recording Labor Agreement, record labels now contribute more than $10 million from streaming each year toward our pension and residual funds. TV and film producers, despite their multi-billion dollar balance sheets, have refused to share anything meaningful from streaming, jeopardizing the ability of musicians to earn a living wage in media today, as well as to retire with dignity in the future.

Further to our just-concluded round of film negotiations, I want to take this opportunity to offer my sincerest thanks to the many talented musicians, members of the AFM IEB, local union officers, and player representatives from across the Federation who spent countless hours working to identify, articulate, and prioritize workplace issues in advance of our discussions with the producers. We had the benefit of superb legal representation from Susan Davis of Cohen, Weiss and Simon, as well as in-house counsel Jennifer Garner and Russ Naymark. Lastly, my thanks go to Electronic Media Services Division Director Pat Varriale, Contract Administrator Matt Allen, and all the hardworking Federation staff for their valuable contributions throughout the process.

Next month in this column, look for additional information about our member-driven campaign to win industry standard wages and additional pension contributions for musicians who record and perform content made for streaming platforms.

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