If Content Really Is King, Then Madison Avenue's May Be Facing $3 Bil Digital Ransom
- by Joe Mandese @mp_joemandese, July 17, 2012
LAGUNA NIGUEL, CA – If content truly is king, then be prepared for Madison Avenue’s brand-generated content to be held for a $3 billion ransom. That’s what Douglas Wood, senior partner at Reed Smith LLP, and the Association of National Advertisers' chief counsel more or less suggested will happen next year when the Hollywood talent unions -- SAG and AFTRA -- try to get their hooks into the kind of digital marketing content that is not currently classified as “advertising” or “commercials” and therefore does not fall under current contract provisions between Madison Avenue and its commercial talent pool.
Speaking Monday during a Q&A session at the ANA’s Digital and Social Media Summit, Wood threw the $3 billion number out there, suggesting it might be the contractual value of some testy negotiations he anticipates taking place between the ad industry and the Hollywood unions.
“The unions desperately need to capture the content that you are putting on the digital platforms,” Wood advised a roomful of marketing execs. He indicated that the negotiations would likely be tenacious, drawn out, and could lead to the first significant labor action (i.e., strike) by Hollywood’s talent unions against Madison Avenue in years.
He cited several reasons, including the fact that the unions are desperate to “capture” talent revenues from some of the new forms of brand content – especially user- and brand-generated video -- in order for them to survive and to pay pension and health plans as the industry shifts away from conventional commercial content production.
“That’s where they see the real money,” Wood said, adding that the unions will try to “redefine what a commercial is in terms of video.
Wood advised the advertisers to produce any commercials they are planning for next year during the first quarter of 2013, before any labor action manifests.
“You won’t be able to get actors,” he warned. “It’s that serious.”
From the ad industry’s standpoint, he said it will be equally important for Madison Avenue to dig in its heels, because he said it may not be possible to determine what the long-term economic impact of changing the definition of “commercial” content might be in terms of talent and residual fees paid by advertisers.
It's terrible to think that you might have to compensate people who create content, lol. Those ingrate bastards.
“You won’t be able to get actors,” he warned. “It’s that serious.”
This is a man who has no friends in show business; friends that would walk over each other's bodies to get a part.
I completely respect the rights and talents of the actors that make up the members of SAG/Aftra, and I totally recognize the grey area that branded entertainment falls in to - it's a situation I've directly faced during production of branded series using well known union talent. There are tons of details that need to be worked out, and I've seen first hand why.
BUT (you knew there was a but coming) - I personally worry that in this early, still indeterminate stage of not only branded video but online shows in general, I definitely feel like any negotiations on the subject need to be handled carefully.
Compared to the rest of the funding available for web series, budgets for branded shows seem like a lot of money. They're not. Not really. Not comparatively (in relation to other media). Brand sponsorships are one of the few trickles of money coming in to the space. If - until the industry really shapes up - actors are forced to work without guaranteed minimums outside of the existing SAG-Aftra New Media contract, well... be patient. The rest of us are in that boat too, and aren't getting paid what we're worth... for now... while we prove that this is a viable thing and while we pry brand wallets open ever wider.
Building a new industry takes time. If the union wants to bite the main hand that feeds us, wait until we're more than just the ugly stray getting a few meager table scraps. By all means, start the conversation, just... watch the teeth.
What is no doubt a well intended effort to benefit and protect important members of the process could, if handled badly, end up damaging the true future potential of branded video for all of us. Simply put, brands don't *have* to make digital video or web series. We're still in the early days of convincing them they *should*. Make it too much of a pain point too early, and all you do is add to the reasons they won't.
My son is an actor in Hollywood (http://www.imdb.com/name/nm4539292/) and I would love for branded web video to be a source of life sustaining income for him, but...
The average broadcast network commercial probably gets 100M views over the course of its use. Paying SIG/AFTRA scale for creative that is going to have that kind of exposure makes sense. Web videos are getting hundreds or perhaps a few thousand views. For a video that is only going to get 500 views, I'll use the receptionist before I pay scale.
So SAG will regulate the internet?