Hurray for Hollywood

HURRAY FOR HOLLYWOOD!

Negotiation Issue: Copyright Royalties

Negotiators: Screen Writers Guild (SWG) (Licensors) and Hollywood Producers (HP) (Licensees)

Situation: SWG represents 2,000 writers who write scripts for television series. HP represents the producers who are responsible for producing the shows and negotiating the “sale” of these shows,

The five year contract between SWG and HP will expire next year. Since the signing of this last contract, the market for television shows has changed dramatically. HP now receive payments for broadcasts of a show on broadcast or cable, but also for sales made through other distribution channels - DVD sales, in-flight entertainment, on-line downloads to computer and MP3 players. This has been highly profitable for HP, as these subsequent sales have minimal marginal costs. In general, they consist of only additional royalties paid to actors.

In negotiating the last contract with HP, SWG did not anticipate these additional sales opportunities. In this negotiation, they now seek royalties for these added uses of their work.

HP is willing to pay royalties to SWG for some of these uses. SWG is seeking broader language that covers royalties for sales through any new technology that may be developed over the term of the contract. The parties also disagree over the term of the contract and the forecast for sales through currently identified distribution channels. SWG’s members are willing to strike, if necessary, but are confident that such a strike would be short. HP believes it can mitigate the effects of the strike by developing and marketing “reality” shows that require no scripts.

1. Decide whether you will represent the Screen Writers Guild (SWG) or the Hollywood Producers (HP).

I want to represent the Hollywood Producers.

2. Brainstorm a set of options...