If you're in the dark as to what's going on, this recent "Los Angeles Times" article gives you a quick overview:
Residual resentment slows Hollywood talksTo read the rest of the article, click HERE.
Studios want to revamp pay for reruns. Writers and actors want more.
By Richard Verrier
As a young writer, Marc Cherry found early success on NBC's hit show "The Golden Girls," then toiled in obscurity for the next 12 years.
Two shows he created for Fox and CBS were canceled. None of the TV pilots he developed clicked. In debt $30,000, he sold his Hancock Park home, moved into a small condo in Studio City and even borrowed money from his mother.
What sustained him in the fallow years, before his desperation inspired ABC's 2004 hit "Desperate Housewives," were the little green envelopes that showed up in his mailbox. Reruns of "The Golden Girls," which got a second life on the Lifetime cable channel, brought residual checks that one year totaled $75,000.
Residual fees are at the center of labor talks underway between the Hollywood studios and the union that represents movie and TV writers. The major studios want to revamp the decades-old system, citing soaring production costs and fragmented audiences amid today's digital revolution.
But the writers say these payments help them weather Hollywood's feast-and-famine work cycles. Without residuals, Cherry said, he might have been forced to "get a real job."
TV viewers might never have had "Desperate Housewives," the darkly comic tale of suburbia that helped lift ABC out of the doldrums.
"These residuals allowed me to survive long enough to create a show that is a huge profit center for the network," said Cherry, 45, a Long Beach native and member of the Writers Guild of America negotiating committee. "That's what kept me afloat."
The major studios and the Writers Guild are far apart in negotiations on a three-year contract that would replace the one that expires Oct. 31. The writers are scheduled to vote this week on whether to give the board the authority to call a strike if no deal can be reached. Studios are preparing for a strike as early as Nov. 1, which would be the first writers' walkout in nearly 20 years.
A major sticking point in the talks is the residual fees that actors, writers and directors receive when their movies or TV shows are rerun on television or sold for release on home video and in foreign markets. The writers' West Coast guild collected $264 million in residuals in 2006.
But the writers want more money. They are pushing to double the payment they receive for TV shows or films that are released on home video. Currently, they receive about 4 cents for every DVD sold under a pay formula agreed to in the 1980s, when manufacturing home videocassettes was expensive. They also seek higher pay for movies and TV shows sold over the Internet and residuals for shows created for the Web and other new media.
Studio executives, however, have resisted paying more for digital downloads and contend that it's premature to set pay formulas for online shows when the medium is experimental.
They propose overhauling the system, paying TV and film residuals only after the studios have recouped their costs. They contend that residuals were developed at a time when studios more than offset their film costs at the box office, which hasn't been the case for nearly three decades. TV networks say they have been squeezed by a shrinking syndication market and a migration of younger audiences to the Internet.
"It is simply no longer tenable to be paying residuals on losses as we have for three decades," said Nick Counter, president of the Alliance of Motion Picture and Television Producers. "We must adapt to the realities of the marketplace, the new demands from our audiences and new technologies, or suffer the fate of those who deny change or don't adapt fast enough..."
