Wednesday, June 01, 2005

Fighting for Residuals

As I have mentioned, in an off hand comment within another post, I believe that the WGA needs to fight much harder in its representation of writers. When it comes to residuals on DVD sales, writers seem to be at the bottom rung of the profit ladder. Yet without writers, there would be no product. Yes this is true of any key role in the film making process, but it is even more true with the writer. Why? Frankly, without a writer, whether or not that writer plays another roll in the process (say as director or actor), there is no beginning to any project. Stated simply, no writer -- no idea -- no idea -- no project. Ask any writer today, how about Tim Minnear of Firefly fame, and you will hear how important they think residuals are and how little the WGA is doing to represent them.

Which brings me to last Wednesday's Hollywood Reporter (you do need to be a subscriber to read the article, but I will provide snippets in my analysis). Since E3, SAG and AFTRA members have been leaning toward a strike against the video game industry, with a key component of the discussion being "performer residuals."

What?! You say, "Actors in Video Games getting residuals? How much do they contribute? What about low selling games?"

Okay, okay, before we get too incensed about the proposal, let me say the following. Actually, in many games (for example the Solid Snake series) the actor's play as much a role as they would in any animated production of equal length. In fact, for many games, thinking of animated features is a nice analogy for what is happening. I am thinking of "narrative" games here and not voiceless old school side-scrollers.

Now that we know what analogy I am coming from, let's have a look at some of the competing proposals, which have a June 7 deadline.

According to the Hollywood Reporter "One of SAG/AFTRA's proposals was that residuals be paid only on games that sell more than 400,000 units, which they say would have been fewer than 30 titles in 2004." As a critique one could point out that a number of these successful titles include "sports" games and first person shooters which require less from actors than the "narrative" games above. So this is obviously a point where I think there is room for negotiation.

On the other hand the companies' final offer, "includes a 35% wage increase as well as an additional 125% of compensation if a title is licensed for 'remote delivery'." So...if someone can download the game I get paid a little more than double my initial pay, no matter how many copies the game sells and even though the manufacturing costs go down? Hmm...I can see why SAG/AFTRA refused that one.

I don't mean to sound too much like I am taking the side of the Guild, especially since only about 10-15% of guildmembers even work in the VG industry and given the ease with which the VG industry could use non-union players, what I am trying to point out is that unlike the WGA the SAG/AFTRA alliance are fighting for the earnings of their members.

This is especially important when the following information is considered.

According to The Entertainment Complex worldwide Hollywood film entertainment revenues totaled $45 billion dollars. Of that money, 21 billion was in DVD sales and 7 billion was in theatrical revenue. Compare this to The NPD Group's, a leading marketing information provider, Annual 2004 report of U.S. retail sales of video games, which includes portable and console hardware, software and accessories, which reported "sales of over $9.9 billion." Four of the top 10 "by unit" titles were sports games, and one was a "voiceless" Pokemon game for the Game Boy Advance. So what we have here (remember that 2004 was a "down year" for hardware, unlike 2005 will be, because no big new systems were released) is information which informs us that Video Game sales in the US produce revenue larger than box office sales, and roughly half of reported DVD sales. This matches the NPD's report on "Cross Entertainment" figures. This report shows that 42% of consumers 13 and older purchased a DVD during the holiday shopping season while only 20% spent money on video games. From the reported revenues above, that figure seems to be fairly stable. (On a side note, it has been reported that 2004 box office was down 3% from the prior year, according to the first NPD article above, the same was true of Video Game revenues).

By the above figures we can see that video game revenue, merely based on US sales, (According to The Economist international sales figures are around 20 billion, or roughly half the Hollywood International revenues) is around 25% of that of filmed entertainment. And needless to say, both industries bring in substantial sums. Ad to this actors like Jet Li, Pierce Brosnan, and Patrick Stewart lending their voice talent to video games and you can see that hard fought negotiations by SAG/AFTRA are an easily predicted phenomenon.

Which brings me to the point of the post. With SAG/AFTRA fighting hard for its members to recieve residuals on video games, when is the WGA going to do the same for writers?

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