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DGA: New Streaming Residuals Top Traditional TV

The Directors Guild of America has voted unanimously to approve a new three-year agreement with the Alliance of Motion Picture and Television Producers, including streaming residuals topping traditional TV.

The agreement includes wage and residual base increases of 2.5% in the first year and and 3% in the second and third years. 

Negotiations began Feb. 10 and the perspective side's negotiating teams struck the deal March 5. The current contract expired June 30; the new contract expires June 30, 2020. 

"As the streaming sea change we anticipated for so long is now overhauling the industry, and new services continue to enter the market, this pivotal deal boosting streaming residuals beyond traditional TV levels is a major victory for our members..." said DGA president Thomas Schlamme. 

No surprise given the billions of dollars being spent on streaming originals, but DGA said that since 2016 the number of made-for subscription video on demand (SVOD) episodes has doubled, and that isn't even taking into account new streaming services Disney+, HBO Max Apple TV+ and Peacock. 

Among the highlights of the deal, according to DGA. 

Made-For-SVOD: 

o "A nearly 50% increase in residuals for members working on original SVOD series, bringing the three-year residual for a 60-minute series on the highest subscriber SVOD services to more than $73,000. To put the accomplishment in perspective, when combined with the gains from the 2017 agreement, the residual is up nearly fivefold from under $15,000 in 2016, and exceeds the average residuals earned from all markets for the most popular network series. 

o "Lower budget made-for-SVOD series will now also be captured under the new contract – expanding the scope of coverage to many more series and ensuring the vast majority of members working in this space benefit from DGA-negotiated terms, residuals and creative rights. 

o "Elimination of 'grandfathering," by which series that began production during a prior contract continued to be governed by the terms of that prior contract, even in subsequent seasons. Under the new agreement, grandfathering will be eliminated,enabling more members working on SVOD series to benefit from the newly negotiated terms."

Pension plan: 

o "Increased funding for the DGA-Producer Pension Plan. Even though it is the best- funded in the industry, the Guild sought to further secure the Plan from potential downturns in the market. 

  ▪ "The Employer contribution rate to the Pension Plan will permanently increaseby one percent (1%) in the first year of the agreement from 7% to 8%.

  ▪ "The DGA will also have the right to allocate up to .5% of the negotiatedincreases in salary rates in the second and third years of the Agreement to either the Directors Guild of America-Producer Pension Plan or the Directors Guild of America-Producer Health Plan. 

  ▪ "Increases in the caps upon which pension contributions are made.

TV Director Creative Rights:

o "Gains to address the continuing and growing problem of late scripts – which result in reduced prep time, and negatively impact a director’s ability to deliver the most compelling episode possible on time and on budget.

o "The creative rights negotiation also made progress in restricting electronic transmissions from set, securing additional cutting time for directors of pilots and first episodes of series without pilots, and protecting the director’s right to participate fully in the casting process."