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BEHIND THE BRAWL OVER STREAMING REVENUE SHARING FOR ACTORS

When a film or show tops viewership charts, SAG-AFTRA wants a cut for
performers. The studios (and platforms) are holding out so far.

By Rick Porter

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RICK PORTER

Television Writer

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August 9, 2023 6:35am
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Striking actors and the media companies they work for remain far apart on
negotiations for a new contract, with no talks taking place since SAG-AFTRA
members took to the picket lines July 14. Both the union and the Alliance of
Motion Picture and Television Producers, representing studios, seem dug in to
their respective positions. One of the union’s proposals in particular — for a
small cut of streaming service revenue from successful shows and movies — has
generated a lot of pushback from the management side, with the AMPTP saying it
has “fundamental objections” to the idea. SAG-AFTRA contends that it’s a
necessary (if novel) step given the industry-altering changes in the streaming
era.




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SAG-AFTRA’S PROPOSAL 

The union’s contract offer includes setting aside 2 percent of revenue generated
by a series shown on a streaming platform to be shared with the show’s cast, in
addition to existing base salaries and the residuals actors earn. To verify
revenue generation, SAG-AFTRA suggested using the “content valuation” tool from
measurement firm Parrot Analytics. It purports to show how much money a given
title generated for its streaming platform based on Parrot’s proprietary
audience demand metric — which includes several factors but gives video
consumption the most weight — and publicly available revenue figures
from streamers.


THE ARGUMENTS

SAG-AFTRA contends the revenue-sharing idea is necessary in part because of how
much streaming has changed the structure of the business, including shorter
seasons of TV series and longer gaps between seasons, putting stress on working
actors who rely on residuals to help get them through leaner times. “The
economic pressure that creates is really severe,” SAG-AFTRA national executive
director Duncan Crabtree-Ireland tells The Hollywood Reporter.

Players unions in the major American pro sports leagues all have collectively
bargained revenue sharing, with a roughly even split (give or take a couple of
percentage points) between owners and players. Crabtree-Ireland said that while
SAG-AFTRA’s proposal isn’t modeled on those in sports, those agreements “help us
feel like this is not just possible, but very reasonable.”

The AMPTP declined to comment for this story beyond its July 21 rejoinder to the
union’s messaging on sticking points in the negotiations. The companies also
listed specific objections to the revenue-sharing proposal. The AMPTP said the
idea “does not ‘follow the money’ ” in seeking revenue from streamers, implying
that SAG-AFTRA is looking to capture revenue from a show’s producer, not its
distributor. Not so, Crabtree-Ireland said: The union would capture that revenue
from streamers via an existing part of SAG-AFTRA contracts called a
distributor’s assumption agreement. Under those deals, when a studio licenses a
movie or TV show to a distributor, the distributor takes on the responsibility
of paying out residuals.





The AMPTP also characterizes the proposal as actors wanting to “share in the
rewards of a successful show, without bearing any of the risk,” the July 21
rebuttal says, adding, “That is not sharing.” Crabtree-Ireland took exception to
that notion, saying: “I would argue that our members are risking way more than
your average executive. What risk are the streaming company executives
personally taking to warrant the kinds of rewards that they generate from that?”


ABOUT THAT THIRD-PARTY DATA

Lastly, the AMPTP lodged an objection to using Parrot Analytics as the arbiter
of revenue. “So much of their data is based on social engagement, but there’s no
scientific evidence that social engagement leads to viewership,” one studio exec
whose company has a valuable piece of IP tells THR, speaking about Parrot’s
demand metric. “We love Parrot at our studio because they love [our IP]. It
always shows up way above any numbers we get from our own data about how these
shows are doing.”

The AMPTP also says that Parrot Analytics’ content valuation metric is “not
readily available to anyone who doesn’t pay the third-party analytics company.”
(Several AMPTP members, including Amazon, Warner Bros. Discovery and Disney, do
in fact pay Parrot for the company’s insights in other areas.)

Parrot’s demand metric does take into account social media activity around a
show, but only as part of a weighted system that includes actual viewing of
movies and TV shows, as well as other things like watching trailers and posting
or watching videos related to a title. The company says that viewing carries the
most weight in its demand metric and social media posting the least.





“Looking at viewership alone can no longer reflect the complexity of how content
creates value,” a Parrot Analytics spokesperson said in a statement to THR.
“Parrot Analytics’ content valuation system measures value according to a number
of data points, including active consumption, that when combined sees a very
strong correlation to key performance metrics such as subscriber growth and
revenue. This allows the industry to calculate the revenue share contribution of
every title, to every streaming service, in every market around the world.”

Crabtree-Ireland said SAG-AFTRA is more than willing to use another metric that
both sides can agree on — or have AMPTP members open their books. “If we had
confidence we would get that kind information from the source, that would of
course have been our first choice,” he said. “But because we knew that was going
to be hotly resisted because of their past actions, we felt like it would be
smarter to provide an alternative, so that we weren’t just stonewalled on the
basis of ‘No, we can’t share that information.’” 


Source: Parrot Analytics

This story first appeared in the Aug. 9 issue of The Hollywood
Reporter magazine. Click here to subscribe. 




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