MUMBAI: The Directors Guild of America (DGA) has concluded an interim deal on the terms of a new three-year collective bargaining agreement with the Alliance of Motion Picture and Television Producers (AMPTP). The current contract expires in June.

The new agreement will focus on

- Increasing both wages and residual bases for each year of the contract.
- Establishing DGA jurisdiction over programmes produced for distribution on the Internet.
- Establishing new residuals formula for paid Internet downloads (electronic sell-through) that essentially doubles the rate currently paid by employers.
- Establishing residual rates for ad-supported streaming and use of clips on the Internet.

DGA's Negotiations Committee chair Gil Cates says, “Two words describe this agreement - groundbreaking and substantial. The gains in this contract for directors and their teams are extraordinary – and there are no rollbacks of any kind.”

DGA president Michael Apted says, "This was a very difficult negotiation that required real give and take on both sides. Nonetheless, we managed to produce an agreement that enshrines the two fundamental principles we regard as absolutely crucial to any employment and compensation agreement in this digital age: First, jurisdiction is essential. Without secure jurisdiction over new-media production—both derivative and original—compensation formulas are meaningless.

"Second, the Internet is not free. We must receive fair compensation for the use and reuse of our work on the Internet, whether it was originally created for other media platforms or expressly for online distribution.”

The agreement includes the following gains in new media:

Jurisdiction: The new agreement ensures that programming produced for the Internet (both original and derivative) will be directed by DGA members and their teams. The only exceptions are low-budget original shows on which production costs are less than $15,000 per minute, $300,000 per programme, or $500,000 per series - whichever is lowest.

Electronic Sell-Through (EST): EST is the paid download of features and TV programming. The agreement more than doubles the EST residual for television and increases the feature film residual by 80 per cent over the rate currently paid by the employers.

Specifically, the EST residual rates will be 0.70 per cent for television downloads and 0.65 per cent for film downloads, above a certain number of units downloaded. Below that, residuals will be based on formula employers currently pay.

Payments for EST will be based on distributor’s gross, which is the amount received by the entity responsible for distributing the film or television program on the Internet.

"The companies are now contractually obligated to give us unfettered access to their deals and data. This access is new and unprecedented and creates a transparency that has never existed before. Additionally, if the exhibitor or retailer is part of the producer’s corporate family, we have improved provisions for challenging any suspect transactions," Apted adds.

Ad-Supported Streaming: After an initial 17-day window for free promotional streaming of net programmes, companies must pay three per cent of the residual base (approximately $600 for network prime time one-hour drama) for 26 weeks of streaming. They can continue to stream for an additional 26-week period by paying an additional three per cent - or a total of $1,200 for one year’s worth of streaming. (During a programme's first season, the 17-day window is expanded to 24 days to help build audience.)

Sunset Provision: This allows both sides to revisit new media when agreement expires.

Cates adds, “Our fundamental goal in these negotiations was to protect our interests in the present while laying the groundwork for a future whose outlines are not yet clear. We knew that gaining jurisdiction over new-media production and winning fair compensation for the reuse of our work on the Internet were the key issues for setting a framework for the future, but we also had to secure real gains for our members in today’s world.”

In a statement, the AMPTP says that it hopes that this agreement with DGA will signal the beginning of the end of this extremely difficult period for the industry. "We invite the Writers Guild of America to engage with us in a series of informal discussions similar to the productive process that led us to a deal with the DGA to determine whether there is a reasonable basis for returning to formal bargaining. We look forward to these discussions, and to the day when our entire industry gets back to work.

"Our industry’s creative talent will now participate financially in every emerging area of new media. The agreement demonstrates beyond any doubt that our industry’s producers are willing and able to work with the creators of entertainment content to establish fair and flexible rules for this fast-changing marketplace."

WGA says that the terms of the deal will be carefully analysed and evaluated, adding "We will work with the full membership of both guilds to discuss our strategies for our own negotiations and contract goals and how they may be affected by such a deal.

"For over a month, we have been urging the conglomerates to return to the table and bargain in good faith. They have chosen to negotiate with the DGA instead. Now that those negotiations are completed, the AMPTP must return to the process of bargaining with the WGA. We hope that the DGA's tentative agreement will be a step forward in our effort to negotiate an agreement that is in the best interests of all writers."