October 12, 2008 by Voiceguy.

This is the third example being posted.  The first example offered a fairly even balance between network and cable and between prime time and non-prime time.  The second example is relatively heavy on cable and light on network, with only 20% in prime time.  It would be helpful to review those two posts first before reading this one if you have not already done so.

I had to hunt through the samples to find a real-world example that was heavy on network and light-to-medium on cable.  It is much more common to find, say, 100 to 200 network plays against 5,000 to 10,000 cable plays for national commercials.  But I did manage to find an example, and here it is.

In this commercial, there are 6 on-camera principals and 1 off-camera principal.  The on-camera performers had 2 sessions each; the off-camera had one.  There were 352 network plays, which I allocated 100 each to ABC, CBS, and NBC and 52 to Fox.  There were 900 cable plays, which I allocated 100 each to 9 different cable channels spanning 3 different ratings tiers.  For all of these, I assigned 1/2 the plays to prime time and 1/2 to non-prime time.

Here is the chart showing total performer compensation under the current contract (the left bar, labeled “Baseline”) and under the various proposed Booz-Allen alternatives:

Because of the dominance of the “Class A” component, and the relatively small influence of the “Cable” component, these bars show a significantly different distribution from the previous example.  As noted earlier, one of Booz-Allen’s intentions was to move compensation out of Class A and more into cable (about a 10% change in both cases).

The small thumbnail below links to a table giving the detail supporting this chart.  Right-click and open in a new  window or tab to see it properly:

(right-click here)

The per-performer chart reflects the change in compensation under the various models:

And again there is a detail table supporting this chart linked to the thumbnail below — right-click and open in a new tab or window to view properly:

(right-click here)

In this example, of the Booz-Allen alternatives, the “Adjusting Tiers - Pay-per-Play” approach comes out best for the performers; indeed, Booz-Allen’s tweaks produced virtually the same outcome as the current contract.  By contrast, the “Adjusting Tiers - Rebalanced” approach — which seems to be the one most often mentioned by the JPC in its communications with advertisers about the Booz-Allen study — came out significantly lower.  That would indeed please advertisers who believe they are paying too much for Class A talent compensation.

If the “Adjusting Tiers - Rebalanced” approach were adopted in the new contract, thus lowering advertisers’ talent costs for network commercials, would that encourage them to use network placements more?  Hard to say — but if it did, it’s actually possible that performers would gain a net benefit.  The reasoning would be that even though the payment per airing would be lower, the number of airings would increase.  As I noted in an earlier post, the problem with static models is that they don’t take into account the effects of the changes on peoples’ behavior.

What becomes clear under all of these scenarios (including the current contract) is that performer payments are kind of a crap shoot.  It all depends on where the advertiser chooses to buy air time.  If you happen to be fortunate enough to book a commercial gig that will play nationally on high-paying media channels, you do well, especially if the commercial does well and is renewed.  Under the current contract, performers make more if the advertiser favors network (Class A) use over cable.  Under the Booz-Allen alternatives, it seems like performers do better with respect to cable usage than they do under the current contract.  If we believe that the overall trend toward cable uasge will continue, then the Booz-Allen alternative approaches should look attractive to the many union performers whose work will primarily air on cable.

That brings us to some pragmatic considerations associated with putting any of the Booz-Allen recommendations into practice:

1.  Can we truly depend on the model to have generated a “revenue neutral” outcome that fairly depicts the effects of each Booz-Allen recommendation?  Where are the weak spots, assumptions, and oversimplifications in the model, and how might they change things?

2.  Can the various Booz-Allen recommendations be translated into viable contractual language that can be administered by mere mortals at agency traffic departments, payroll companies, SAG and AFTRA, and elsewhere, without need for a computer science degree?

3.  With respect to the GRP (ratings-based) approach, is there enough certainty and reliability in the ratings world to form the basis for such a compensation scheme? How often will the ratings be assessed?  What happens if they change?

These are all questions that will have to be confronted as the unions and the JPC engage in the next round of contract talks.  And remember, as I mentioned in the initial post, the Booz-Allen recommendations address only a portion of the overall contract.  Thus, since in the end everything is connected to everything else for negotiation purposes, the adoption of a Booz-Allen approach may ultimately come down to how other matters are bargained.

At the risk of sounding like a broken record, I will again remind readers of the scheduled SAG/AFTRA meetings to present the Booz-Allen proposals.  Please attend and learn.  I plan to do so here in Los Angeles this coming Wednesday evening.

Next:  Thinking about the proposals

VG

Posted in Commercials Contract, SAG-AFTRA | Print | No Comments »

October 12, 2008 by Voiceguy.

 In the last post, we looked at an initial example that had a modest blend of network and cable airplay, evenly divided between prime time and non-prime time.  (You should read that post first if you haven’t done so.)

This next example (taken from one of the actual sample commercials in the study) has 3 performers:  2 on-camera principal, and 1 off-camera principal.  The airplay is 11 runs each on CBS and Fox, all in prime time, and 500 runs each on cable channels ESPN, TNT, USA, FX, Sci-Fi, and Spike, of which 20% (100 runs) are prime time and the balance (400 runs) are non-prime time.

Here’s what the total compensation looks like under the baseline (existing contract) and the various Booz-Allen alternate approaches:

As in the earlier post, you may right-click on the thumbnail below and open a new window or tab to see a table giving the details for each of these bars.

(right click here)

The second chart shows compensation per principal (in other words, the grey bars would be multiplied by two to give the total for both on-camera principals in this particular example).

And once again, you can see the underlying detail by right-clicking on the thumbnail below and opening a new tab or window.

(right click here)

In this particular example, all of the Booz-Allen alternates improve performer compensation (and cost advertisers more) compared to the current contract. The GRP (ratings-based) approach does the best job for performers in this particular case. In all of the alternate approaches, the cable component — shown in dark red — is the most significant contributor to compensation.  Part of Booz-Allen’s overall philosophy was to shift compensation more into cable and away from Class A, reflecting audience migration.

So, does that mean that GRP is always going to be the approach to choose from a performer’s standpoint?  Not necessarily — the outcomes change depending on the inputs.  We’ll look at another example that shifts the balance in the next post.  Remember, the Booz-Allen recommendations are supposed to be revenue neutral, meaning that situations with increased compensation (compared to the current contract) are offset by other situations with less compensation.

In the meantime, don’t forget the SAG/AFTRA meetings being held this month to explain the Booz-Allen study in more depth in order to prepare members for the upcoming commercial negotiations.

Next:  An Example with Heavy Network (Class A)

VG

Posted in Commercials Contract, SAG-AFTRA | Print | 4 Comments »

October 12, 2008 by WW.

There will be two big issues on the table. One should be easy (which means it probably won’t be.) One is harder for sure.

The easy one is agreeing to joint negotiations under the Phase 1 rules on the commercials contract. That’s what the Allens have said they wanted — they negotiated the proposed agreement with AFTRA in sessions with AFL-CIO mediators.  

We think it makes sense for everyone involved. The Booz Allen stuff that Voiceguy has been explaining and that is the subject of the ongoing membership meetings is difficult enough. The economy is tough enough too.We still haven’t heard any explanation of why Membership First voted against this at the AFTRA Board meeting last week, because it really amounted to their own proposal.  

It really should be easy - but, like we say, Membership First has already voted against it, even though they initially proposed it.

Then there’s the really tough one: the Membership First resolution seeking a strike authorization referendum. On that we have our own solution to break the logjam, which we offer to you now.

 Our recommendation is that:

1. the Board table the strike authorization referendum resolution, and

2. instead, pass a resolution requesting the immediate resignations of all members of the current TV-Theatrical negotiating committee.

3. After constituting a new and more responsible (and responsive) committee, the Board should remind the committee that they have the power to call for a strike authorization referendum…which the committee should do, if it can’t quickly get a tentative deal.

We expect the committee could do exactly that, get a tentative deal, if they move promptly in a reasonable manner.

We don’t expect the tentative deal to strictly adhere to the “core principles” resolution passed a few months back. We expect it to reflect reality and protect the members, while laying the groundwork for the negotiations 2 1/2 years from now in which new media issues which are impossible to resolve now may actually get settled.

Fire away. We’re sure lots of people will hate this one. But we’re unanimous on it, even if the vote isn’t 68-0.

Posted in Commercials Contract, SAG Politics, Union Politics, Exhibit A - TV Theatrical | Print | 33 Comments »

October 12, 2008 by WW.

With our friendly local editor off on a Columbus Day vacation with wife and kids, it falls upon me to remind everyone that while this blog invites comments, it insists that the comments be civil. That means name calling will get a comment either edited, if whoever is reading feels like doing the work, or simply not approved in the site’s moderation process.Today I’ve bounced three comments entirely, something that’s never happened before - and edited a couple more.All viewpoints are welcome. All epithets are not. 

Posted in Miscellaneous Hate Mail and Threats | Print | 4 Comments »

October 12, 2008 by WW.

They will be ad-sponsored. Meaning, if the shows are AFTRA, there are residuals attached.Here’s the guts of the Times story:

Partnering with CBS Corp., YouTube announced on its blog today that it would post full-length episodes of old fan favorites like “MacGyver” and the original “Beverly Hills 90210” along with newer hits like “Dexter” and “Californication” in a bid to bring more advertisers to its highly trafficked site. YouTube is also in talks to add shows from other networks and feature-length films.Advertisers haven’t always been comfortable linking their products to YouTube content, much of which is user-generated and only a few minutes long, notes Jupiter Research analyst James McQuivey.For YouTube, that meant running relatively few ads in unobtrusive places for fairly low prices. The site’s revenue is expected to be about $200 million this year, notes Times staffer Jessica Guynn. Google bought the YouTube for $1.65 billion in 2006.

Posted in Media Business, Exhibit A - TV Theatrical | Print | 2 Comments »