Hollywood Actors Want $759 per Day Residuals For Online Video Content

webmoneyThe future of entertainment on the Web still boils down to dollars and cents, as the Screen Actors Guild and Hollywood studios try to hammer out an agreement. On Tuesday, talks resumed after an eight month long impasse over artist’s share of Web revenues. The core issue is that the SAG is demanding the same money for Web distribution as that of TV and movies. Studios argue, Web revenues will not support the same model. Meanwhile, what we see on the Web, and at what price, remain central issues.

The SAG’s base rate of $759 per day, for every actor, in every production distributed via online video, runs contrary to the way Web consumers think in the first place. Free, is the online dogma for everything from music to software, and shifting this philosophy has proven futile in most regards. Web entertainment, as far as professionally produced content, remains an amateur’s market according to experts. So, where does this leave us with regard to our viewing pleasure? In this case, and perhaps for the first time, the Hollywood studios are right.

The Black and White of Online TV

YouTube garners about 40 percent of the online video market, while its competitors slice the “viewing pie” a dozen or more ways. YouTube claims hundreds of amateur video posters make thousands in ad revenue, but even billions of views cannot pay what SAG suggests. Even Hulu’s rerun distribution of TV shows only represents about 1.7 percent of the total Web viewing audience, so if YouTube is not financially viable – then how can Hulu be?

Video and online TV were great calling cards for Web 2.0 and the Internet as an entertainment platform. Joost, Veoh TV, and a vast array of “possibles” have yet to “show the money”, at least in the wheelbarrow full proportions the SAG is demanding.

Bright Future – Not Now

According to UCLA professor, film expert and author Howard Huber, “So far, nobody has the imagination to figure out what new thing you can provide on the Internet that you can’t get in any other medium. “ My thinking on this is, if Hollywood cannot figure out how to do it, it may not get done.

One bright idea in the form subscription based model (Epix) from Studio 3 Networks, may be a partial solution. The bottom line appears evident, sooner or later Web users will have to pay. The problem for Web producers will be in competing with TV as always, and there is no current advantage for Web video, other than convenience and price.

Conclusion

The Web as a medium for distribution and monetization is still in its infancy. Hollywood studios, and nearly every other business entity still seem baffled as to how to best utilize its revenue potential. This latest news about SAG’s demands reflects a much wider dilemma, but show business for Web consumers may consist of the same old reruns of copyright battles versus YouTube goofy videos, for the foreseeable future.

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  • Matthew

    Interesting. I know the days of free content on the internet are numbered, and I’ll just have to accept it. But it is my hope that there will continue to be such demand for free services that, when the YouTubes and Hulus of the world begin to demand payment, something new will pop up that offers the same or similar content for free.

    The longer the web struggles with figuring out how to make money off itself, the longer its users will grow accustomed to the “free” model, and will revolt when it attempts to switch.

    From the sounds of this article, SAG seems to have learned NOTHING from the implosion of the music industry. Premium content (Hulu) is wanted, but amateur content (YouTube) has its place, too.

    I, for one, am ok with an ad or two in my 30 Rock, if it means I can watch it streaming at work.

    When Hulu resembles NBC so closely that a 30 minute program online has 8 minutes of commercials? I will leave and won’t come back.

    • http://www.pamil-visions.com Phil Butler

      Hi Matt, I think the SAG follow like mice anyone who says they can get more. It is like the old days of the UAW, look where they are now. There is a balance to be struck always, seeing it realistically is the rub. I love movies and video, but paying someone 10 times what their audience makes in a day is tantamount to medieval times in my book. Value and the market determine obviously, and I know many of these actors do not work all the time, but WHAMMO! We need a new model, perhaps they can take some micro percentage or something?

      Always,
      Phil

  • rtcrooks

    I knew celebrities would find out about the internet sooner or later.

    • http://www.pamil-visions.com Phil Butler

      LOL @ Ross! Yes, that dad burn Internet, I spect we bess put sum stuff up there just in case. This seems to be the way celebs approach everything. Kind of like 2just in case” religion.

      Always,
      Phil

  • http://www.arwebdesign.net samanime

    This article just made me go “wow… are they retarded?”

    Seriously, $759 per actor per day for online content. If you had infinite traffic, I don’t think you could have a server (or server-farm) that could break even paying the actors and the server costs. Even if users were paying a premium per viewing, I still don’t think you could make enough to handle those kind of payments.

    It seems so crazy that they can’t see that structuring something online isn’t the same as structuring something on TV. Then again… this is one of those groups that isn’t bound by silly things like reality.

    • http://www.pamil-visions.com Phil Butler

      Samanime, It is so crazy. The Web as a conduit for movies is not quite what is should be, but giving people value for all their attention to these demi.gods seems appropriate ya know? I do not think most people mind paying something for entertainment, but as you say, knowing the system and its limitations is a must. It all makes me wonder if they could not get by with $500 a day, or about 10 times what a WalMart worker gets? Perhaps 6 times, or even 4 times? I am not trying to minimize the worth of artists, but then Michelangelo some of these people are NOT:

      Always,
      Phil