DVDs Bring in Billions of Dollars... and What do Writers Get? Bupkis.

Variety reported Friday that sales of DVD boxed sets  accounted for $2.8 billion in sales in 2004, up from $160 million in 2000, making TV shows "the fastest growing sector of the US vid biz."

The TV DVD sector account for 18% of  the US disc retail market last year...American shows dominate the DVD market not just in the US but in most Western European countries...

"In economic terms, this trend has been the equivalent for the Hollywood studi0s of striking oil in one's own backyard, as they discovered lucrative new vehicles for exploiting brands they already own," according to the Screen Digest report.

What is the writer's take of that gigantic windfall? About zero. Screenwriter John August crunches the numbers, using the DVD of his movie BIG FISH as an example.

the formulas used for home video residuals are based on videotapes, which are relatively expensive to produce, and sell for a fairly low price. Technology changes. DVDs are cheaper to produce, and sell for a higher price. But the formula for paying residuals is still locked into the old paradigm. Studios make a hell of lot more on each DVD they sell, but the writer (and actor, and director) still get the same amount.

A recent campaign by the WGA East does a graphical breakdown of the numbers, but let’s take Big Fish as an example. According to Video Business, its MSRP is $28.95, but most people will pay less than that. Let’s say $20, which is what you’d pay on Amazon. And Amazon is still pulling a 25% markup at that price; it buys the DVD wholesale at $16.

How much does it cost to manufacture, package, distribute and market each DVD? On average, $5.45. So the studio is making a profit of $10.55 on each DVD sold. For Big Fish, that means Columbia/TriStar has made $21.1 million profit in just one week. Of that, the writer gets the “point-one.”

The studios refuse to give writers, actors, or directors a bigger piece of DVD revenue, not even as little as 1%,  arguing they need  it all to 0ff-set losses in other areas. The income from TV shows on DVD, as well as movies on DVD, more than make up for any losses incurred by short-lived shows in primetime or films that tank at the box-office (In fact, the take from movies on DVD are often much, much larger than the box-office revenues)

For TV writers, DVDs are the future of reruns,  not syndication or foreign sales. Experts quoted in the article predicted that US sales of TV shows on DVD will reach $4.4 billion  by 2009.  Currently,  TV shows on DVD account for 30% of all DVD purchases in Western Europe, adding up to $2.1 billion in sales.

We caved on the DVD issue in this negotiation because the studios said there was no way they'd increase our take. They declared it a non-negotiable point. So we, and all the other guilds, settled for small bumps in other areas (and we wrangled a $37 million infusion of cash into our health fund, still a pittance compared to the revenue we won't see from DVDs).

I think it's imperative, for the future f the WGA and the financial security of writers, that we make getting a bigger share of DVD revenue a line-in-the-sand in the next contract negotiation...that we align ourselves with our sisters unions on this issue and  make it clear to the studios that we won't accept no for an answer.

Comments

[Anea]

You just need to get as big as Dave Chappell and they will give you a share of the cut ;)

[Jason Sanders]

John August mentioned this on his blog...

Here it is: http://johnaugust.com/archives/2004/writers-guild-agreement-reached

Quite well done :) They say that writers are the real bosses in TV but how come they get screwed out of dvd deals?

[Mark A. York]

It's a big concern in SAG too.

[Peter L. Winkler]

If an architect designs a building, he doesn't get additional fees every time the building changes hands. Neither does the builder.

[Mark A. York]

Well Peter that's not entertainment is it. Business rules aren't universal across fields. Should they be?

[Mark]

I'm with you on this one, Lee. Without good writers (and actors), I wouldn't be buying these sets.

[Gomez]

Buildings don't entertain people!

[Maestro]

Interestingly, one of the Wordplayer guys--Ted, I think--said that it's already too late for DVDs, so the Guild(s) would do better to concentrate their efforts on VOD.

Me, I'd happily throw a double-sawbuck Rob Thomas' way for a set of Cupid DVDs.

[kete]

I didn't know that. It's outrageous! I was sure that whenever I bought a DVD-set a certain percentage would go to the people who made the movie or series in the first place, like writers, directors, actors. They absolutely should benefit from DVD sales, imo. Good luck with your negotiations.

Have to say that under these circumstances I don't feel too bad if I some times buy a DVD on the "black market" - it's only the studios who "suffer" the financial loss, and they don't deserve any better it seems.

kete

[Peter L. Winkler]

Mark:

I suppose the rules within any business are whatever the most powerful group can negotiate. I was drawing the analogy between architects and builders and writers because they all perform work for hire.

As Dr. Phil says, I don't have a dog in this fight. I don't care passionately about it because I don't have a vested interest.

The only real way for screenwriters to ever get the upper hand is to retain copyright over their writing. It will probably never happen, because the moneymen have more power than the writers.

[Mark A. York]

Work for hire really is the kicker here.

[brihana25]

For what it's worth, I wish the guilds luck with this one. This is one fight that I think you certainly deserve to win; you should all be paid for your hard work. There would be no DVDs for the studios to profit from without you.

It's funny, though, for all of the MPAA's posturing and ranting about pirates stealing profits from the artists, that it turns out these profits aren't going where they should be in the first place, and in fact aren't going anywhere but into the studios' coffers.

Ah, well. He who has the gold...

Good luck.

~ bri ~

[Josh]

>Me, I'd happily throw a double-sawbuck Rob Thomas' way for a set of Cupid DVDs.>

Sadly, even Rob can't help you there. He had to buy a bootleg copy on ebay.

Check www.slaverats.com for more info on this.

[Bill Peschel]

If you want an idea of just how much money is involved, Epstein looks at Tom Cruise's deal with Paramount over Mission Impossible. It's jaw-dropping just how much is involved.

http://slate.msn.com/id/2121617/

[Maestro]

I read an interesting article on, I think, Craig Mazin's blog about copyright/work for hire... OK, here it is:

http://artfulwriter.com/archives/2005/03/we_dont_keep_ou.html

Oh, and thanks, Josh, for the link! I didn't realize RT had moved from hieran.com.

[Jordan]

That's ridiculous. When can you negotiate again?

[Nia (uk Wrexham)]

hi every one,my mum wants Diagnosis Murder DVDS for christmas and i was just wondering if any1 knows if you can actually but them from anywhere because ive looked all the places i can think of even the big stores they dont have it in stock and they cant find it anywhere to order it. PLEASE HELP Thanx Nia x