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New Media Jurisdiction: Letter from the DGA

By Jonathan Handel, Esq.

The DGA has just released a letter from DGA President Michael Apted entitled "Giving New Media Room to Grow." Dated today (August 20, 2008), the letter appears in the September 2008 issue of DGA Monthly.

The letter addresses the question of the jurisdictional carveout for certain media production. I agree with most of it, and present it here. See below for my additional thoughts.

Dear Members,

As we move into the third month of our new contract, I wanted to take this opportunity to address the issue of union jurisdiction over new media production ? the question of whether all the writers, actors, and directors who work on studio-produced programming for the Internet must be covered by union contracts. This issue ? new media jurisdiction ? was central to all the guild negotiations this year because however entertainment evolves over the next few decades, it is clear that a significant part is going to be online.

In our contract negotiations earlier this year, we made the decision to allow an exception to our general policy of insisting on jurisdiction over every show made by the studios and production companies that are signatories to the DGA contract. The exception, which the Writers Guild and AFTRA also chose to include in their new contracts, allows producers to make low-budget ?experimental? programs for the Internet that hire people who would not be covered by our contract. However, we built into our agreement a very important protection ? if a signatory company on a new media production employs a professional as director or in any other DGA category, regardless of the budget level ? that production is covered by the Guild agreement.

Critics of this approach argue that union jurisdiction must be absolute. If some productions are allowed to be non-union, they claim, producers will take advantage of the loopholes and eventually all productions will be non-union. But before there can be a union job, there has to be a job. And despite all the grandiose talk about the coming bonanza, new media hasn?t yet started raining money. The truth is that for new media production to realize its undeniably vast potential ? and create all those jobs we want our members to have ? it must be given the room to evolve and grow. The current landscape of new media is overwhelmingly populated by user-generated content and all kinds of concepts created by thousands upon thousands of eager novices with digital cameras and new, out-of-the-box ideas. Occasionally, one of these efforts might catch the attention of the studios, and the new media jurisdictional carve-out will allow producers of extremely low-budget productions to take a chance with young, untried writers, directors, and actors who are not members of any union. If their efforts yield fruit and their shows succeed, their budgets will quickly reach professional levels and they will come under union jurisdiction. If they don?t succeed? well, at least they got their shot. That?s the nature of experimentation. We must be flexible to allow that experimentation to flourish.

What would happen if the unions were to demand and be given jurisdiction over all new media production without exception? The most likely scenario is that it would become structurally and economically unfeasible for AMPTP members to make low-budget experimental shows for the Internet. Then two things could happen. First, rather than grow within the studios and companies that are guild signatories, new media production would gravitate toward the Googles and Microsofts of the world, which are not. Second, to stay competitive in the game, the studios are likely to create non-union subsidiaries where they could produce Internet programs without bothering to become signatories at all. At this point, the talent guilds would be in danger of being pushed out of new media. Were an experimental show to succeed, it wouldn?t come under union jurisdiction, nor would the writers, actors, and directors who created it.

Even if the studios were persuaded to make low-budget new media production under union jurisdiction, this could result in another problem. Many of those untested novices would be required to pay DGA initiation fees and dues, potentially forcing the DGA to accept a large number of new members who have been hired to do one experimental project and might never direct again. Frankly, it would not be fair to charge them initiation fees and dues (which they probably couldn?t afford in any case).

So we have a choice. We can insist on having jurisdiction on paper over everything, and thereby run the risk that the area develops in a largely non-union context. Or we can carve out an exception that will allow experimentation, innovation and growth at the lowest budget levels, while simultaneously securing jurisdiction over all professional-level productions. That approach ensures that if and when the producers become successful, the jobs they?ve created will go union. This approach has been successful before. With very low-budget feature films, we designed an innovative, flexible jurisdictional carve-out that allowed the new medium to develop in a way that ensured that once it was ready for professionals, those professionals would be our members.

I believe we?ve made the right decision.

Sincerely,

Michael Apted
DGA President

The new media jurisdictional carve-out would apply only to a production that falls under the following circumstances:

* $15,000 or less per minute; or
* $300,000 or less per episode; or
* $500,000 or less per series of programs produced for a single order;

and does not utilize an employee in any DGA-covered category who has previously been employed under a DGA collective bargaining agreement.

Two points worth adding. First, the dollar thresholds are high -- much higher than almost all new media production today ($2,000 - $5,000 per minute is typical, with occasional productions at $10,000 per minute). I'd prefer to see them lower, and this is (in my view) an unfortunate compromise that the DGA made. But it's the template, and we're stuck with it, as a practical matter.

However, bear in mind that the union-member provision ("and does not utilize an employee in any DGA-covered category ...") means that even if the production is below the overly-generous thresholds, it's still covered if it uses a DGA member.

Second, the WGA, AFTRA, and proposed SAG deals have the same jurisdictional dollar thresholds, and also have similar provisions regarding use of union members. For instance, in the WGA deal, if the show is written by a "professional writer" -- a defined term that includes WGA members, published novelists, and professionally-produced playwrights -- then the show is covered, regardless of budget.

Likewise, the AFTRA deal has a similar provision regarding "covered performers." This term is defined as follows:

A ?covered performer? is an individual who has worked under a collective bargaining
agreement and has met any of the following criteria:
.. has at least two television (including free, basic, pay or direct-to-video) or
movie credits;
.. has had 13 weeks? employment as a performer in radio (including satellite
radio) in a major market;
.. has had at least two credits in a professional stage play (e.g., Broadway,
Off-Broadway, LORT, COST, or CORST contract, or as part of an Equity
National tour);
.. has been employed as a performer on an audio book or as a royalty artist on
a sound recording which has been commercially released by a major or
bona fide independent label;
.. has been employed as a principal performer, announcer, singer, or dancer in
a national television or radio commercial, interactive game, or nonbroadcast/
industrial production.
The Producer shall be entitled to rely on the representation of the performer as to
whether he or she meets the definition of a ?covered performer.?

The proposed SAG deal is reportedly similar to the AFTRA deal, and thus presumably includes this language. Thus, if a show uses a SAG, AFTRA or Equity member with two TV or movie credits or any of the other listed credits, then it's covered, even if the budget is below the thresholds.

Full post as published by Digital Media Law on August 20, 2008 (boomark / email).