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SAG-AFTRA will begin negotiating a new commercials contract sometime around Feb. 20, The Hollywood Reporter has learned, but the talks in advance of a March 31 expiration come as advertisers increasingly are making ads nonunion and fewer people are watching commercials of any sort as they switch to subscription streamers like Netflix and Amazon Prime.
The shift to SVOD services is a predicament for actors, their union and their agents, because the health of the profession rests on earnings from film, television and commercial work. Agents say that pay from commercials is now falling short for many rank-and-file actors. Where it was once possible to make a living as a commercial actor, that path to a middle-class lifestyle is increasingly narrow, actors and agents report.
But there could be hope: In January alone, NBCUniversal announced an ad-supported video-on-demand service to debut in 2020; Viacom agreed to buy an existing ad-supported TV service, Pluto; and Amazon launched IMDb’s Freedive as an ad-supported offering. The new and newly-invigorated services “definitely give us optimism” for an increase in commercials, meaning more work for actors, says Doug Ely, who co-owns AKA Talent Agency.
The AVOD services could be at issue when contract talks begin. SAG-AFTRA is expected to offer more clarity about payment structures for internet ads as well as product integration for social media influencers and an increase in session fees, perhaps of 3 percent.
While subscription services may have accelerated a shift away from commercial viewing, Netflix alone didn’t start the pain. “The strike [did],” says one experienced commercials agent who asked not to be named, referring to a 2000-01 commercials work stoppage that drove advertisers to non-union alternatives out of necessity.
In 2010, the most recent year for which figures are available from the union and before the merger of SAG and AFTRA, SAG actors earned more than $793 million from commercials work (session fees and residuals), substantially more than for television series ($745 million) or film ($629 million). But session fees had plummeted in the preceding decade, post-strike. And that was before the explosion of internet and cellphone advertising, much of it nonunion. “The second wave [of erosion] was digital,” notes prominent commercials agent Alicia Ruskin of Kazarian/Measures/Ruskin.
Today, the commercials picture appears far more bleak than it was pre-strike. In 1999, nonunion commercials represented only an estimated 5 percent to 10 percent of all commercials, according to Ely and the agent who asked not to be named (Ruskin estimates about 15 percent to 20 percent), and were mostly from small advertisers. Now, nonunion work is estimated between 50 percent and 70 percent of all commercials, including spots for national advertisers, the three agency sources tell THR.
The shift is largely due to cost pressure from clients, competition among agencies and cheaper ad buys on the internet leading to a desire for less expensive, non-union shoots. That means smaller session fees and no residuals, resulting in lower compensation. In at least one case, an ad agency, Bartle Bogle Hegerty, has reacted to the new normal by trying to void its union contract. (SAG-AFTRA has been on strike against BBH since Sept. 20.) And, say Ruskin and Ely, the overall volume of commercial work is down. “It’s not a good time in our business,” says Ely.
Actors have responded, say commercial agents, by working “under the table” — that is, by taking nonunion jobs in violation of a SAG-AFTRA rule, risking fines, suspension and expulsion. “Bust ’em if they work off the card,” said secretary-treasurer Jane Austin at a Jan. 23 rally, and the union has — most recently investigating a nonunion Cadillac shoot deep in the California desert. Union members who worked that commercial could face discipline, as over 160 already have in recent years.
But actors also are opting out: The agency sources noted that some actors are electing “financial core” status, allowing them to retain a shadow affiliation with the union while working nonunion jobs without fear of discipline. SAG-AFTRA annual reports filed with the federal government appear to underscore the issue. From 2012 to 2018, the union lost 4,500 active members (leaving about 161,000) but showed an uptick of about 6,000 who were either on suspension, took honorable withdrawal or went fi-core.
Representatives of the union and the advertising industry declined comment for this story, citing a media blackout in connection with the upcoming negotiations. Those talks will be fraught and, says Ely, “The last thing we need is a strike.” No one expects one, but finding a deal that satisfies actors, ad agencies and brands is unlikely to be easy.
A version of this story first appeared in the Jan. 30 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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