December 20, 2009
The AMPTP is the primary trade association with respect to labor issues in the motion picture and television industry. As the entertainment industry’s official collective bargaining representative, the AMPTP is responsible for negotiating with virtually all the industry’s guilds and unions, including the American Federation of Musicians (AFM); American Federation of Television and Radio Artists (AFTRA); Directors Guild of America (DGA); International Alliance of Theatrical Stage Employees (IATSE); International Brotherhood of Electrical Workers (IBEW); Laborers Local 724; Screen Actors Guild (SAG); Teamsters Local 399; and Writers Guild of America (WGA) (amptp.org). On November 5, 2007 the Writer’s Guild of America East and the Writer’s Guild of America West initiated a strike against the Alliance of Motion Picture and Television Producers (Cieply, 2007). The strike lasted 100 days and ended on February 12, 2008. The strike put the economy in Los Angeles under severe strain with losses estimated as high as $2.1 billion. The strike resulted from the regular renegotiation of standard contracts, or the Minimum Basic Agreement with the AMPTP. According to contract proposals from the Writers Guild of America (WGA), issues arose between the WGA and the AMPTP over DVD residuals, union jurisdiction of animation and reality program writers, and compensation for digital technology called “new media” (WGA Contract 2007 Proposals).
Issues Behind the Strike
There were three major issues contributed to the strike between the WGA and the AMPTP. The first of these issues is was DVD residuals. Twenty years ago, VHS tapes were the dominant media for the home viewer market. When the industry standards for compensation were developed for this media, production costs for VHS tapes were high and the market for these tapes was practically non-existent. The agreement gave writers 0.3% of the $1 million reportable gross and 0.36% after the $1 million sold as residual. At first this was an acceptable arrangement as tapes were selling for between $40 and $100. However, the production technology improved which decreased production costs. As a result, writers felt short-changed in the arrangement. Even as DVD’s were introduced in the mid-1990s, this arrangement stayed in place and dictated compensation for DVD residuals as well. (Verrier, 2007) During negotiations, WGA expressed the importance of residuals as a source of income between periods of employment for writers and requested that the residual rates for DVD sales be doubled to 0.6% (WGA Contract 2007 Proposals). The AMPTP argued that the current formula of 0.3% remain in effect. They also wanted the same formula to apply to digital media. This digital media, also called “new media” was another issue of disagreement in the strike. This “new media” included Internet downloads, digital telephone media, on-demand video programming, and Internet distributed media. The easy access to these media forms makes issues of compensation complicated. AMPTP insisted that the old formula for residual compensation be applied to new media back to the introduction of the arrangement as it applied to VHS. Writers were extremely unhappy about this and felt that they were being compensated unfairly. Once again, despite seeing this “new media” as the future of distribution, the AMPTP refused to bend to a new agreement due to its unfamiliar and uncharted nature (Internet Media Replacing Traditional Media, 2007 ). The third major issue contributing to the writer’s strike was jurisdiction pertaining to animated and reality-based media. The reality television genre has evolved significantly since it was introduced in the 1980s. In the beginning, shows that displayed “reality” were still scripted and focused on the display of real occurrences. Today, the reality television genre has become focused on the presentation of unscripted...