April 25, 2006

ABC, Unions Reach Deal on Cell Phone TV Shows

By Andrew Wallenstein and Jesse Hiestand

LOS ANGELES -- Walt Disney Co. has reached a deal with the Hollywood unions that will put the long-delayed "mobisode" spinoff of hit ABC series "Lost" back on track, the company said Monday.

"Lost Video Diaries," which will air as mini-episodes on mobile telephones, has been on hold since being announced in November. Production on a still-to-be-determined number of multi-minute episodes is expected to resume in late summer in Hawaii concurrent with production on the third season of "Lost," with distribution through Disney's mobile partner, Verizon, by year's end. "Diaries" is expected to end up on other platforms as well.

The Screen Actors Guild, the Directors Guild of America and the Writers Guild of America all hailed the unprecedented agreement for establishing a template covering compensation for future programing on new digital platforms.

"This deal marks the first of many to come and illustrates how, by working together with producers, we will achieve agreements that are mutually beneficial," DGA president Michael Apted said.

But Bruce Gersh, senior vp business development at ABC, described the deal in more measured terms, characterizing it as a trial not unlike the network's recent decision to stream programing on ABC.com.

"This is an experiment that only covers this particular project," Gersh said. "Hopefully we will all figure out a business model that works."

Disney decided to go the guild route -- a first for mobile content -- in order to include writers, producers and directors involved in the primetime series. However, exactly who will be included, from executive producers Carlton Cuse and Damon Lindelof on down, hasn't been determined.

For the guilds, the agreement calls for residual payments once the mobisode has been available on cell phones for more than 13 weeks.

Use on ABC.com does not trigger a residual for any of the guilds, and residuals for DVD or broadcast use are covered under their existing master agreements.

WGA and DGA members will get a residual similar to the pay TV residual in their major contracts. This works out to 1.2% of the license fee for cell phone use and a similar share of the distributor's share if exhibited via the Internet (2% if the Internet use is ad-supported).

For actors, the contract provides an escalating minimum wage that begins at $425 per eight-hour day, retroactive to April 1, and increasing to $450 by April 1, 2007. On the day before the expiration, the rate jumps to $759, allowing SAG to begin bargaining from the higher rate.

This contract also is timed to expire at the same time as SAG's Television Agreement and Codified Basic Agreement, potentially giving the union more leverage. SAG officials took the position that these mobisodes were already covered under their existing agreements, allowing them to focus on the terms of this contract, according to union leaders.

DGA leaders said the agreement, which covers directors, unit production managers and assistant directors, drew on the Low Budget Agreement for initial compensation and conditions of employment as well as DGA's Basic Agreement for terms applicable to pension and health benefits, creative rights and arbitration provisions. The agreement expires at the same time as the Basic Agreement, on June 30, 2008.

Actors will get a $75 advance payment, which is creditable against a residual of 3.6% of the license fee for this use. The same basic terms apply if the mobisode is distributed via the Internet, while there is a 6% residual if the Internet use is ad-supported.

Fox Entertainment is also keeping busy on the mobisode front, announcing Monday a multiplatform marketing partnership with Toyota that includes a mobile-based series tied to "Prison Break." Titled "Prison Break: Proof of Innocence," the 26-episode series will be the first scripted series to receive advertiser support.

Episodes began airing Monday on SprintTV, the video showcase for Sprint subscribers, preceded by 10-second commercials for the Toyota Yaris Liftback and Sedan.

Reuters/Hollywood Reporter