PricewaterhouseCoopers to Handle Commercials Study — UPDATED
The Joint Policy Committee (JPC) has announced the selection of PricewaterhouseCoopers by SAG, AFTRA, and the JPC to conduct the study called for in the last contract negotiation, seeking to develop a new mechanism for talent compensation in commercials:
Per the 2009 SAG/AFTRA Commercials Contract, SAG, AFTRA, and the JPC have agreed to conduct an in-depth study of the Gross Ratings Point Talent Compensation Model (“GRP Model”). This model was created and proposed by Booz & Co. in its report to the unions and JPC in December 2007. The intent of this new study is to: 1) create, based upon real-time information, a detailed and operational talent compensation model that could be implemented across the entire TV commercial industry, and 2) to conduct a year-long pilot study (the “Pilot”) on the impact the GRP Model will have on actual performer compensation. SAG, AFTRA, and the JPC have selected PricewaterhouseCoopers (“PwC”) to conduct this study, which commenced on October 26, 2009. The study is composed of six stages and will last approximately 2 years. During the course of the study, PwC plans to accomplish the following:
- Evaluate the GRP Model’s ability to leverage GRP “guarantees” provided by networks and advertising agencies;
- Design and construct a talent compensation engine, referred to as the GRP-based Talent Compensation Model Engine (“GRP-E”), to calculate talent compensation amounts;
- Reconcile “guarantees” with GRP results;
- Conduct a 52-week Pilot to compare the talent compensation results for a sample set of transactions under the GRP Model against results under the current talent compensation approach;
- Communicate key findings and recommendations for potential changes to the GRP Model;
- Modify business rules and apply alterations to the GRP Model, if necessary, during and following the Pilot for analysis; and
- Propose an approach to transition the GRP-E used for the Pilot to full-scale implementation.
Separately, the JPC is advertising an opening for someone to act as liaison to the study on its behalf.
This is an ambitious effort, and one wonders what would happen if this kind of examination was made of the compensation formulas on the TV-Theatrical side of the business.
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UPDATE: Variety covers the story here.
Sorry to day but in spite of the best efforts of those involved, this will become a battleground.Those who feel this business has let them down will rail against it and the “they’re out to get us” mentality will be foremost
“This is an ambitious effort, and one wonders what would happen if this kind of examination was made of the compensation formulas on the TV-Theatrical side of the business.”
Intriguing idea.
The concept is one that both SAG and the industry should be looking at, but both sides are so dug in that I think fresh thinking is nigh impossible.
Note the significant difference in the commercial realm: While session payment is comparable to TV-Theatrical, the big commercial money is in the usage fees — something like a 4:1 or 5:1 ratio. That’s why the advertisers have such an incentive to make the usage fees work in a satisfactory manner. By contrast, in TV-Theatrical, there has historically been about a 1:1 ratio in session fees to residuals, and I get the impression that the ratio may be dropping as residuals decline. Thus, the compensation challenge in TV-Theatrical is of a wholly different nature from commercials.
Nonetheless, it would be worthwhile for SAG (and AFTRA) to take steps to try to get ahead of the curve.
VG
The only viable option to me was an option included in the Booz-Hamilton study going into the W&WC meetings for the current commercials contract. Basically a “pay-per-eyeball” model, it would track views in new media (web, mobile, etc.) and traditional media and pay a residual rate based on the number of viewers seeing a particular commercial.
This is the closest to the current model, and in my mind, is fair to both employers and employees. It still means that the more successful a commercial (and hence, the performers in the commercial for accomplishing the commercial’s goals), the more the performers involved are paid. If the JPC balks at this, they are being foolish.
Of course, we struck for 6 months in 2000, largely because we (SAG & AFTRA) wanted to finally bring “pay for play” (residuals) to the cable market, and the JPC wanted to do away with pay-for-play residuals on network. We wanted to take the network model to cable and they wanted to take the cable model to network. And when we came back from the strike, the status quo was maintained.
The industry will maintain that there is no way to track video usage online. That isn’t true. As a new media producer, using feedburner (now folded into Google analytics, and still FREE), I could tell you that 7 people in Auckland watched my video one day, and that 10 people in Los Angeles did the next.
We must preserve use of actors’ images to promote product. Actors in successful commercials are due to be paid more for use of that image. The more we, actors, are tied to a product, the less attractive we are to get work for other products.