GUILD AND UNION CONSIDERATIONS IN LICENSING OF MOTION PICTURE PRODUCT FOR CD-ROM DISTRIBUTION

Outline for Seminar Given by Harris Tulchin at University of California, Los Angeles, and at Beverly Hills, CA Interactive Finance Meeting of International Interactive Communications Society

I. CATEGORIES OF MATERIALS THAT NEED TO BE LICENSED:

• The traditional product categories which need to be licensed for use in CD-ROM are:
  
  • A. Text;
    
  • B. Still Images;
    
  • C. Moving Images; and
    
  • D. Audio
    

II. IN ORDER TO UNDERSTAND HOW THESE MATERIALS ARE AFFECTED BY THE GUILDS, IT IS NECESSARY TO UNDERSTAND A LITTLE HISTORY ABOUT THE DEVELOPMENT AND GROWTH OF THE GUILDS:

• A.The Screen Actors Guild, Screen Writers Guild (now Writers Guild of America), and Directors Guild were formed in the 1930's as an outgrowth of the Academy of Motion Picture Arts and Sciences, which had been originally formed by the studio owners, and acted as a company union to address grievances, and negotiate disputes among producers, directors, actors, writers, and technicians.
  
• B.* The studios' attempts to cut all salaries in 1933 by 50%, coupled with the creation of the National Labor Relations Act in 1935, which prevented employers from interfering with workers' collective bargaining activities, paved the way for the unionization of Hollywood.
  
• C.* The studios formed the Association of Motion Picture and Television Producers (AMPTP), which collectively bargained with all of the above-the-line unions, i.e., Writers Guild, Actors Guild, Directors Guild, as well as all the craft unions represented by the IATSE (International Association of Television and Stage Employees) representing editors, cinematographers, costumers, make-up artists, and other "below-the-line" craft personnel, and the AFM (American Federation of Musicians) representing musicians.
  
• D.* Over the course of the last 60 years, the studios, and the guilds have negotiated various work rules, and residual and/or re-use payments which affect the multimedia producer who wishes to use either clips, or an entire movie in CD-ROM, or other multimedia products.
  

III.THE SCREEN ACTORS GUILD (SAG) AGREEMENT/THE AMERICAN FEDERATION OF TELEVISION AND RADIO ARTISTS (AFTRA) AGREEMENT:

• A. If the production originated on film, it is necessary to secure the re-use rights for the acting performances, including narrations, and voice-overs in a motion picture, or clips from SAG.
  
• B. If the production originated on video-tape for television, it is necessary to secure the re-use rights from AFTRA. It is also necessary to secure re-use rights for singing performances on any phonograph recording, including CD audio tape, or other types of audio recordings from the artist.
  
• C. It is also necessary to secure the right to adapt the applicable performance for the new media production.
  
• D. Each SAG and AFTRA performer can set the fee charge for any re-use of his or her image and voice in the film, and video clips the multimedia producer may wish to incorporate into a new media production. These fees begin at a floor of the day player's rate of $504.00, plus 12.65% pension, health & welfare.
  
  • (1) It is generally a good idea to clear the actors on a "favored nations" basis, i.e., where every actor used receives the same fee.
    
  • (2) While $504.00 is the minimum fee, many actors do hold out for more, and the fees can be up to $1,000.00 per actor, and more.
    
• E. If the producer and an actor cannot agree, but all other actors used in the footage agree, the matter may be submitted to the guild for consideration.
  

• F. Payment for the performers for the re-use rights are separate from the licensing fees paid to the copyright holder/producer, or studio.
  

• G. In addition, the producer will probably be required to negotiate for the separate right to use the performer's persona (or right to publicity) in connection with any publicity, advertising, and promotion for the multimedia product (i.e., the use of his or her name, portrait, or likeness) on the packaging, or the print advertising, or his or her promotional and publicity services for making personal appearances, and promoting the product.
  

• A.* Aside from the specific rights which are created under the SAG Agreement, where actors are concerned, re-use fees may also be payable in connection with public domain works under the right of publicity, and its descendability aspects.
  

• B.* The right of publicity is the right to control the use of one's name, photograph, voice, likeness, and signature. The right of publicity is based on the concept of creative rights - the artist's matrix of rights allowing him or her to profit from the investment made in creating their persona - a distinctive image, which includes his, or her likeness, and voice.
  

• C.* In many states, including California, this investment also represents the substantial risk taken by the artist for the development of this recognizable personality as a marketable property.
  

• D.* Several states, including California consider this a property right which can be damaged like other property through misuse, or misappropriation. Additionally, several states allowed this property right to be descendible to an actor's heirs, and estate.
  

• E.* In essence, the persona is a separate entity created apart from that of the motion picture, and accordingly requires a separate clearance from the actor.
  

• F.* There is now a substantial body of law protecting a celebrity's proprietary interest in the marketability of his, or her unique persona in all of its attributes (i.e., voice, signature, photograph, likeness) through the right of publicity.
  

• G.** The right of publicity can be separated from the motion picture, and even though the motion picture may be in the public domain, or you may have permission from the producer to use the motion picture, or a part of it, in a multimedia work, you may still need to negotiate separately with the celebrity and/or his, or her heirs to obtain the rights to use his or her voice, likeness, or photograph in your multimedia projects.
  

• A. CLIPS
  * 30 seconds - $145.00
  * 31 seconds - 2 minutes $439.00
  * for each minute in excess of 2 minutes - $145.00
  

• B. COMPLETE MOTION PICTURE
  • 1. Without interactivity (i.e., the linear motion picture licensed on a CD-ROM), the film is treated as a video disc at 1.5% of the producer's Gross Receipts up to the first million, and 1.8% in excess of one million dollars of producer's gross.
    

  • 2. With interactivity (i.e., where there is branching, and other materials contained on the disk, and the user can interact with the contents of the disk), the Guild and the studios are still in negotiations, and the outcome of these negotiations will be posted here when available.
    

• C. The WGA takes a liberal attitude in creating new works and using WGA writers. The WGA seeks to encourage multimedia producers to sign their 1-page Guild Agreement for a particular production. The Agreement simply provides no minimum compensation, but that 12 1/2% of any compensation be paid over to the Guild's pension, health and welfare plan.
  

• A. CLIPS
  * 30 seconds or less $212.00
  * 31 seconds - 2 minutes - $607.00
  * each minute in excess of 2 minutes - $152.00
  
• B. ENTIRE WORK - Treated as cassettes or pay tv
  
  • 1. first million in Gross Receipts - 1.5% of Employer's gross;
    

  • 2. in excess of 1 million in Gross Receipts - 1.8% of Employer's gross;
    

  • 3. Employer's gross means 100% of the fees received by the Employer (in this case licensee, or the multimedia producer) from the licensing of the Picture on CD-ROM;
    

  • 4. Payment goes to the Guild and is divided among:
    - director;
    - unit production manager;
    - first and key assistant director;
    - DGA pension plan.
    
• C. MORAL RIGHTS WAIVER: I will discuss this later in more detail -- but it is probably also advisable to obtain a waiver of moral rights from the director if the product is going to be licensed on a worldwide basis.
  

VII.THE INTERNATIONAL ALLIANCE OF THEATRICAL AND STAGE EMPLOYEES (IATSE):

• A. The IATSE represents editors, directors of photography, sound technicians, cartoonists, animators, and animation writers, among others. There are presently no Guild mandated payments for IATSE craft service employees for use of a motion picture on a CD-ROM.
  

• B. Nevertheless, certain individuals in strong demand may have negotiated separate rights in their employment contracts with the producers of motion pictures for royalties, or at least creative rights with respect to multimedia. This is rare at this point.
  

• C. Certain animation writers, or animators may have special rights in their work that need to be cleared for use in the multimedia product, and one would have to go get a license, or assignment of those rights from the individuals involved.
  

• D. A director of photography may have the right to supervise the timing, or other manipulation of the photography that he undertook during the production of the motion picture.
  

• E. Certain highly acclaimed editors may have the right to re-edit the motion picture when it is used in another medium.
  

• F. Again, these situations are rare, but they may exist, and the only way to find that out is from the producer of the particular motion picture, who will have a list of contractual obligations to third parties with respect to their use in another media.
  

• A. When music is recorded in a motion picture performed by musicians who are members of the American Federation of Musicians (AFM), the use of that music in another media requires re-use payments to those musicians under the producers' collective bargaining agreement with the AFM.
  
  • (a) with respect to interactive CD-ROM uses: the AFM is still bargaining with the studios, and now considers each use on a case by case basis.
    

  • (b) with respect to non-interactive uses -- (i.e., the movie digitized onto CD-ROMS), the royalties are between 1 - 1 2/3% of producer's or distributor's gross, depending on the applicable AFM collective bargaining agreement.
    

  • (c) There is a telephone number - 1-800-762-3444 - ask Christine Meggs for theatrical and TV film agreements.
    

• A. There is no collective bargaining agreement between producers and composers and song writers. Each composer and song writer negotiates his or her own separate agreement with the motion picture producer for the creation and use of songs and underscore in the motion picture.
  

• B. There is, however, an organization called the Song Writers Guild of America, where one can try to locate a songwriter. It is a resource for finding artists, their publishers, managers and agents, and other information necessary to secure the various rights which its members may own.
  

• C. There is a whole body of law and required agreements on the subject of music clearances which is not the subject of this outline, but will be dealt with later in our class.
  

• A.* Moral rights - There are now efforts by artists to gain greater control over the moral rights in their works - these rights have long been recognized in European countries.
  

• B.Moral Rights are essentially the right of the author to maintain certain controls over their work, even after it is sold to another. These rights include:
  
  • 1. the right to claim authorship of the work (right of paternity), and
    
  • 2. the right to object to any distortion, mutilation, or other modification of the work (right of integrity).
    
• C.Moral rights are considered separate, and distinct from the economic rights that a copyright bestows on its owner.
• D.Generally, moral rights cannot be waived, are perpetual, are not subject to the work-for-hire doctrine, and may be inherited by the author's heirs. They may even exist in foreign countries even though the work was created in the United States by a U.S. citizen.
• E.The United States presently does not recognize moral rights in motion pictures. However, that may be changing.
  
  • (1)The Visual Artists' Rights Act of 1990 recognized moral rights in works of visual arts such as paintings, drawings, prints, and still photographs for exhibition purposes in limited editions.
    
• F.Accordingly, with the changing sympathies towards moral rights in the United States as a result of the controversy raised by colorization, digitization of images, and manipulation, it is wise for multimedia producers to make sure that they secure, to the maximum extent permissible any moral rights when acquiring rights from authors, directors, producers, and actors, as well to allow for manipulation of images, and digitization, colorization, essentially changing of the original product to fit the new media.
  

If you have any questions or comments regarding this material, please click here to send email to Harris Tulchin at entesquire@aol.com.