OK, maybe it’s a bit premature to talk about actual “negotiations,” but the first real test of the negotiating prowess of the new SAG-AFTRA combination will be upon us later this year. The current SAG and AFTRA Commercials Contracts, originally set to expire on March 31, 2012, were extended for one additional year last fall. Thus they now expire on March 31, 2013.
That may seem like a long way off, but there’s an additional wrinkle. The Joint Policy Committee has been trying for years to revamp the way commercial performers are paid for the use and reuse of their work. Prior to the 2009 Commercials negotiations, the Booz-Allen consulting firm proposed several alternate compensation formulas. In the 2009 negotiations, it was agreed that a “pilot program” would be conducted to see how a formula based on “gross rating points” (“GRP”) would compare with the current contractual formula.
The parties jointly selected PricewaterhouseCoopers to conduct this study beginning in 2009. By 2010, the JPC was complaining that advertisers were reluctant to participate in the study. The study itself is completely under wraps, but presumably has gone forward.
So here’s where the “additional wrinkle” mentioned above comes in. In the original 2009 Memorandum of Agreement, the parties agreed to meet on or about October 1, 2011, for no less than six weeks, for the specific purpose of discussing the results of this GRP pilot study. Presumably this timetable has now been pushed back to October 1, 2012. That’s less than six months from now.
The current Commercials contracts are basically the 2003 agreements, as amended by extensions and letter agreements in 2006, 2009, and 2011. There is no doubt that the media landscape has changed drastically in that time. What is unclear is whether the JPC’s proposed GRP-based compensation formula is really the right response to these changes. GRP is a wonky term that only specialists in the advertising business really understand (or at least claim to). The burden will be on the JPC, it seems to us, to persuade the union and its members that it is in their interests to jettison the traditional formulas and go forward with a radically different one. And if agreement cannot be reached, then what?
The basic GRP concept seems fairly simple: http://www.marketing-metrics-made-simple.com/gross-rating-points.html It appears to be an effort to weight a showing by how many people saw it rather than just counting showings.
Theoretically this would incentivise the use of commercials more often in lower rated programming, which in an increasingly fractured viewing audience seems like it could be to everyone’s benefit, including the performers.
But, sure, the devil is in the details, as always, particularly in transition.
Having read the adlaw piece linked above about advertiser reluctance to participate in the pilot, and on what grounds, transparency and enforceability suddenly shot to #1 on my list of concerns.
–
Ed. Comment: See, that’s one of the big problems, and SAG-AFTRA can’t really do anything about it. The idea is that advertisers decide to buy a certain number of gross rating points for a particular campaign, and performers will be paid in some manner based on these buys. However, the advertisers consider their buys, media mix, strategy, etc., to be competitively sensitive information. Who, therefore, will be able to validate the payment scheme? And that leaves aside tricky issues of which precise rating service to rely on, what time frames to use, how to handle make-goods following upfront buys that experience disappointing ratings, and on and on. Perhaps more importantly, will making the switch to this new formula have any effect on the exodus of advertisers from union production altogether? In other words, can the JPC promise more work for union performers if those performers agree to go along with the advertisers’ new formula?
Will the union continue to be able to accept, process and record all of the different types of commercial payments that that new media and different pay methods will require?
Of course. One of the reasons the union exists is to make sure everybody gets paid and is paid appropriately.
In the National market and the local market, commercials are paid on the total amount of possible eyes on the commercials. More or less.
It doesn’t matter to us if no one watches American Idol or everyone watches we get the same money for that National spot.
With all the tech stuff nowadays–perhaps it is time for us to be paid on an almost exact number?
We know how many hits an ad on the internet gets–either on the computer or the IPhone or the IPad or the I have no idea how any of those things work.
And, because of cable transmission, they have a good idea about how many TV sets are turn onto American Idol etc.
Maybe now is the time to ride with the producers. The payments would be after the fact. Big hit shows would pay us more and not so big would pay us less and flops would pay us the least. No matter what they paid to put the spot on the air.
No sliding scale down–no 13 week cycle–no nothing except for hits and sets watching.
The thing is, Les, it has to be transparent and easily verifiable on pre-agreed industry standard metrics and metrics-collectors. Or otherwise you’re inviting the re-invention of “Hollywood accounting” in the commercials market. A chill just ran up my back just writing it.
I agree.
Problem is the producers and studios and stations all have two mouths.
The one that tells us that no one is watching and the one they tell the advertisers that everyone is watching.
Can’t pay you more wages because no one is watching.
Have to charge you more for that spot because everyone is watching.
I think, that’s a first, that the techies can figure it all out. Then we just have to come up with a revenue even formula (maybe a little + ). Some actors will lose money because of it and some will make more because of it.
But IMO it would be the fairest way of distributing the money. The eyes have it.