Overview of the SAG-AFTRA New Media Agreement
The SAG-AFTRA New Media Agreement covers content that is exhibited both via digital download and by streaming, and is a subsumption of the SAG-AFTRA Commercials Contract and the SAG-AFTRA Television Animation Agreement. The New Media Agreement’s inception has its roots in the 2006 Screen Actors Guild television contract, and an overwhelming rejection by the Guild’s membership of a similar commercial contract – one that would have covered video games and internet advertising. Faced with what appeared to be a loss in bargaining power, SAG and AFTRA members overwhelmingly approved the merger of their union. That merger was completed in March of 2012.
The merging issues of independent film production, new media, and branded entertainment were thus turned over to the newly formed union’s New Media Negotiating Committee . The Committee’s top priorities were to preserve residuals for both the routine and nonroutine use of new media productions, many of which had been producing original content but were not liable under the union’s commercial contract to pay residuals for routine uses of either its content or actors’ performances. Under the New Media Agreement, new media productions are generally defined as those with an original cost between $100,000 and $500,000. Such productions are required to pay a 20 percent contribution to the performers’ pension and health and welfare funds for its performers. For a production to be considered nonroutine, and for a production to qualify as a nonroutine use, generally the cost must be more than $500,000 (and $5,000,000 to qualify for the residuals scheme). Significant productions must still pay Screen Actors Guild-AFTRA members in accordance with the unions’ standard contracts for television and television-equivalent commercials.
What’s in the New Media Agreement
The SAG-AFTRA New Media Agreement has been carefully drafted to address the unique realities of new media productions, while leveling the playing field for producers and performers. Key provisions will surprise and delight both sides.
New Media Minimums
The heart of the new media agreement is the minimums – the wages that must be paid to performers for new media productions. Under Appendix A of the agreement, the minimums for studio/guild productions will be very similar to the traditional television rates. There are only minor para. 7 increases for principal performers. The minor increases for principal performers are offset or surpassed by the "Conversion Factor" which is available to all series, talent contract, and background performers for motion picture commercials and new media productions released on the same day.
The minimums for non-studio/guild productions are lower than the traditional television rates, but higher than the minimum for motion picture commercials; for example, the minimum for a one hour broadcast network dramatic program is $797 per day, while the minimum for a new media dramatic program released over a more protracted period is $620 per day. Certain options increase the minimums, such as the "Option One" fee which is sometimes used in television to award a successful pilot performers with a greater probability of success should the pilot go to series.
Working Conditions
Workplace conditions have become a key issue for many performers. Many performers will also be surprised to hear that new media productions are subject to almost all of the same conditions with which they are conversant. Working Sample Reels are once again available to demonstrate a performer’s abilities, but casts of less than seven performers are not required to work with a SAG-AFTRA representative. Also, there are no minimum crew members lower than those of union theatrical productions. In other words, there are no major cuts for new media productions, the minimums remain much the same.
Residuals
The residuals formula for new media is somewhat confusing, with many different factors dictating the level of payment to performers. While the payments are often lower than those prescribed under the previous SAG Commercial Agreement, there are some instances where payments can be greater under the new agreements. The sad truth is that payments under this new agreement are tied to revenue from the program, which means that many new media creators can anticipate far lower residual payments than are received under their theatrical contracts.
Who’s Eligible Under the New Media Agreement?
The SAG-AFTRA New Media Agreement is applicable to any production intended for communication to the public through the Internet or New Media. A handful of productions are specified as covered regardless of the platform on which they are exhibited, including:
Not all internet uses of content are automatically covered under the New Media Agreement, unless they meet the requirements of those outlined above or are otherwise expressly included in the Agreement. For example, productions such as webisodes and web series, broadband programming, revenue generating websites, and live event streaming are considered covered New Media productions, even when exhibited on a subscription, pay-per-use, freemium, or other similar service.
Additionally, productions distributed by way of Physically Integrated Media Platforms ("PIMPs") – including Blu-ray releases – fall within the New Media Agreement regardless of whether they are also advertised, promoted or exhibited on traditional platforms. Productions that are otherwise covered under traditional agreements, such as television series, television movies, and theatrical films, must take note that coverage is not automatic when made available via New Media platforms. Rather, there is no double dipping covered under both agreements, and the producer and creators will need to execute a separate agreement for the new media platform of the movie/series/webisode. However, if the program is adapted for a particular New Media platform after the date of first exhibition, New Media coverage may be established by way of a modification to the original principal agreement.
How the New Media Agreement Can Benefit Performers
The SAG-AFTRA New Media Agreement provides substantial benefits for performers. Most notably, the agreement improved the rate of compensation provided to performers whose work is exploited through new media. Per the terms of the agreement, performers earn contributions towards their pension and health benefits for new media work, and the residuals earned from the exploitation of that work in new media likewise provide contributions towards their pension and health benefits.
In addition to increased pay, the SAG-AFTRA New Media Agreement guarantees protections against certain waivers whereby video gamers and other performers can give up certain rights by signing agreements with a game developer or other exploiter of the performer’s work. In this regard, performers are protected from being required to give up the exclusive use of their likenesses and from being required to agree to allow the developer to make sequels or prequels based on characters created by the performer. In addition, the SAG-AFTRA New Media Agreement protects performers from being required to agree to provide voice-over and/or other work not guaranteed by the express terms of the performer’s contract.
Common Issues and Criticism
As with any agreement, the New Media Agreement has not been without its challenges and criticisms. One common concern amongst producers is the relatively high cost of talent payments. Producers often operate on very tight budgets, and the compensation for SAG-AFTRA members may seem financially unmanageable. However, this is a necessary investment for establishing the legitimacy of a new media project and securing a professional workforce. Performers have also raised concerns around the scalability of the New Media Agreement. For example, many have wondered how a show that starts out as an online series will transition to a traditional television show, if it grows in popularity. The SAG-AFTRA New Media Agreement does not flawlessly address this issue, and the transition may come down to a matter of negotiation . Calculation of the Producer Contribution Fund ("PCF") increases the more views a web series gets, which can be discouraging for producers looking to reduce the cost of their releases by not having to pay into the PCF. As a means of circumventing the PCF for individual projects, some directors will create multiple production entities to serve as a release platform, thereby attempting to gross less than $1 million with each company. The SAG-AFTRA New Media Agreement admittedly has gaps that allow for ambiguity. The above-quoted clause is full of blanks: "New Media uses of theatrical motion picture made for New Media are specifically compensated for in the residuals schedules to be negotiated in the next cycle." Today, director and filmmaker Dan Mirvish laments how "the majority of the SAG-AFTRA New Media Agreement basic agreements are in the past," and it’s time to renegotiate them – meaning, time to fill in the blanks.
Recent Changes to the New Media Agreement
In recent years, there have been several updates to the SAG-AFTRA New Media Agreement ("Agreement"). In 2017, SAG-AFTRA launched a negotiated streaming agreement that was more streamlined for buyers. The agreement is designed to accelerate out the ability for non-traditional buyers to use the SAG-AFTRA collective bargaining agreement. Rather than negotiating deals with SAG-AFTRA for each project, buyers can now simply sign a template agreement that provides them with the option to pay union rates and be bound to the union’s conditions.
After the 2017 year launched the streamlined agreement, in 2018 SAG-AFTRA hit another milestone with the Union’s New Media, Interactive Media, and Commercials and Non-Primetime News Programs (NPTNP) members voting to ratify the new contract that raises minimum engagement fees for non-union commercials that air on the Internet. This new rate of $250 per airing goes into effect in March 2019. SAG-AFTRA continues to see positive growth with this revenue stream on an annual basis by approximately 15%-20%. This positive trend has resulted in SAG-AFTRA expanding its staff dedicated to policing and administering the agreement.
With digital media platforms dominating the broadcasting landscape, the market for commercial agreements has increased exponentially resulting in continued growth in both internet media and television as a whole. All of these new and emerging platforms create opportunities for growth not only for Screen Actors but also for producers and studios.
Navigating the Agreement When Making Your Project
The SAG-AFTRA New Media Agreement features a number of provisions intended to assist producers and content creators in determining the appropriate scope of their projects. Although it is a complex document with many ifs, ands and buts, the 2015 SAG-AFTRA New Media Agreement is, on the whole, a workable document not only for existing and future new media productions, but also when it comes to features and independent films.
As mentioned above, it’s an extremely dense document that will take a substantial period of time to digest. It can also be lethargically slow when it comes to being processed at the Guild. Accordingly, particularly as it relates to the first option for a producer (option A), some advanced planning is necessary. A good roadmap for how to produce a digital streaming project is available on the SAG-AFTRA website and in the FAQ section.
Conclusion: The Road Ahead for New Media Commissions
As we move further into the digital age, the SAG-AFTRA New Media Agreement will continue to shape the landscape for creators in the entertainment industry. Its provisions provide a framework for fair compensation and representation for union members, while also ensuring that the content creators retain some level of ownership in their work. With the rapid growth of new media platforms and the increasing demand for original content, it is likely that we will see further developments and revisions to the New Media Agreement as the industry continues to adapt to new technologies and consumer demands.
One emerging trend is the rise of subscription-based models, which are becoming more popular as alternative revenue streams for creators. These platforms typically allow users to access exclusive content for a monthly fee, which can provide a more stable income for creators than is typically available through advertisements alone . As these subscription-based platforms continue to grow, it is likely that they will come under the same scrutiny as traditional media entities with regards to union representation and compensation for performers and other creative labor.
Another potential area for growth is in virtual and augmented reality content, which can be time-consuming and costly to produce, but offer an immersive experience that traditional content cannot replicate. As the technology surrounding these forms of media continues to improve, so too will the opportunities for narratives previously limited to video games or other mediums.
As the SAG-AFTRA New Media Agreement continues to operate in the evolving landscape of media, digital content creators will need to stay abreast of any changes or revisions, and understand how these may impact their ability to create and distribute original content. The future of new media is bright, and the SAG-AFTRA New Media Agreement will undoubtedly play a large part in shaping its evolution.