Hollywood Executives Call for End to Residual Payments - from

Hollywood Executives Call for End to Residual Payments

By MICHAEL CIEPLY
Published: July 11, 2007
ENCINO, Calif., July 11 - In an unusually blunt session here today, several of Hollywood's highest-ranking executives called for the end of the entertainment industry's decades-old system of paying what are called residuals to writers, actors and directors for the re-use of movie and television programs after their initial showings.

The executives stopped short of saying they would demand an immediate end to residual payments in the upcoming, probably difficult negotiations with writers, actors and directors. But they were emphatic in calling for the dismantling of a system under which specific payments are made when movies and shows are released on DVD, shown abroad or otherwise resold. Instead, they want to pool such revenue and recover their costs before sharing any of the profit with the talent.
"There are no ancillary markets any more; it's all one market," said Barry Meyer, chief executive of Warner Brothers. "This is the time to do it."
The briefing at the headquarters of the Alliance of Motion Picture and Television Producers, an industry bargaining group, was conducted by Mr. Meyer, Leslie Moonves, chief executive of CBS, and Anne Sweeney, president of the Walt Disney-ABC Television Group, along with the alliance's president, J. Nicholas Counter. It was intended to set the stage for Monday's opening of contract talks with the Writers Guild of America unions on both coasts.
A spokesman for the Writers Guild of America West had no immediate response. But representatives of that guild and other unions said they expect to extend their compensation arrangements to new media rather than retreating from existing formulas.
The industry's contract with the writers expires on Oct. 31, while contracts with the Screen Actors Guild and the Writers Guild of America the following June 30. With these deadlines looming, networks and studios have been scrambling to lock up additional episodes of shows that could be aired in the event of a strike, and movies that could be finished before the actors' deadline. The industry executives declined to discuss specific contract proposals. But they said they would adamantly oppose any move to extend residual-like payments to the sale of movies and shows on the Web or in other new media. They repeated an earlier call for a study that would, in effect, defer decisions about such distribution channels for as long as three years.
"We need complete flexibility," said Ms. Sweeney, who described broadcasters as being in a desperate scramble for revenue as consumers increasingly turn to online sources for programs that are often stripped of advertising. "Guild restraints limit our ability to do what we need to do," she said.