SIDELElTER ON LITERARY MATERIAL WRI'ITEN FOR PROGRAMS MADE FOR THE INTERNET
Asof May 2, 200 I Revised as of November 1,2004
J.Nicholas Counter III President
Alliance of Motion Picture&Television Producers, Inc. 15503 Ventura Boulevard
Encino, california 91436
Re: Literary Material Written for Programs Made for the Internet Dear Nick:
This Sidelener confinns the understanding of the WGA and the Companies (collectively "the parties") concerning the application of this Basic Agreement to literary material written for the Internet or other similar delivery systems ("Internet"}. With respect to literary material written under employment, or optioned or acquired from a professional writer, intended for initial use on the Internet, the parties agree as follows:
Part A - Letter of Adherence
Part A of this Sideletter authorizes a letter of adherence for Companies producing audio-visual entertainment progranis made for the Internet ofthetypethat have traditionally beencovered under the WGA Basic Agreement as well as othertypesof programs made for the Internet.
A Company, at its option, may execute this letter ofadherence to cover the wri ting of literarymaterial for any sucb program or multipleprograms,at the Company's election, made for the Internet. The tenus of the letter of adherence shall be binding upon the Guild and the Company, and shall require the Company to make contributions on behalf of writers employed on such program(s) to the Pension PlanandHealth Fund at the rates set forth in Article 17 of the 2004 WGA Basic Agreement. The provisions of Article 6, "Guild Shop," also shall apply. No other terms of the Basic Agreement shall applytothe employment of such writer, or to the sale or option of such literary material, unless agreed in writing between the Guild and the writer, on the onehand,and the Company, on the other band.
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Part B - Motion Pictures Based on Material Written for or Initially Used on the Internet Ifawriter is employed by the Companyt~write for the Internet a presentation ofa series or program primarily intended for television or theatrical exploitation, then, should the Company exercise its right to produce sucb pilot, series or theatrical motion picture, the Company shall n be permitted to contend tbat the writer of the television pilot, series or theatrical motion picture is disqualified from having separated rights under Article 16.A. or 16.B. solely because tbe presentation has been published or exploited by virtue of its exhibition on the Internet. PartC - Mutual Reservation of RJghts
Nothing contained in this Sideletter shall be deemed a waiver of any party's legal position with respect to the application of this or any prior Basic Agreement to material written for the Internet. The parties reserve all of their legal positions with respect to such material.
Very truly yours,
WRITERS GUILD OF AMERICA, WEST, INC., on behalfof itself and its' affiliate,
WRITERS GUILDOFAMERICA, EAST, INC.
By:
-JO-hn....,aj4lQ,~ciil.:.~~~~I'h-·~~~~~'f,...
Executive Director, WGAwACCEPTED AND AGREED:
The respective signatory companies represented by the ALLIANCE OF MOTION PICTURE&
TELEVISION PRODUCERS, INC.
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SIDELETTER ON LITERARY MATERIAL WRlTTEN FOR
PROGRAMSMADE FORTHE INTERNET
SIDELElTER ON EXHIBITION OF MOTION PICTURES TRANSMfITED VIA mE INTERNET
Asof May 2, 200 I Revised as of November 1,2004
J. Nicholas CounterIII President
Alliance of Motion Picture&Television Producers, Inc. 15503 Ventura Boulevard
Encino, California 91436
Re: EJ:bibldoD of MotloD Pictures TransmittedViathe Internet Dear Nick:
This Sideletter confmns the understanding of the Guild and the Companies (collectively "the parties") concerning the application of the MBA to the exhibition ofcovered theatrical and television motion pictures, the principal photography of which commenced on or after July 1, 1971, on or by means of the Internet or other similar delivery systems ("Internet").'
1. LlceDse for LimIted Period or fued Number of EJ:hibltiODS. Where the subscriber pays for the program either on a subscription or per-picture basis, and where the payment is in exchange for the right to view the motion picture for a fixed and limited period of time or a fixed number of exhibitions, the Company shall pay to the credited writer(s) an aggregate sum equal to one and two-tenths percent (1.2%) of the license fee paid by the licensee for the right to exhibit such picture on the Internet.2
'The parties reserve their respective legal rights and positions-as to the applicability of Article 64 to interactive programs transmitted via the Internet.
2Asbargaining history, this language is based upon the following model: studio licenses to Moviefly the right to transmit the motion picture on the Internet-to the viewer who pays Moviefly on a subscriplion or per-picture basis. Such payment would enable the viewer to view the motion picture for a fixed and limited period of time or limited number ofexhibitions. For example, if Columbia Pictures, through Columbia-TriStar Home Entertainment, licenses to Moviefly the right to.exhibit a Columbia Pictures film, the residuals shall be based upon 100% of the license fee paidbyMoviefly to Columbia-TriStar Home Entertainment for such picture.
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When the Company's receipts from the licensing ofsuch exhibition are received from an entity which acts as the exhibitor and in which the Company has a financial interest, the reasonableness of the fee received by the Company from the licensing of such exhibition shall be determined by the exhibitor's license fee payments to unrelated entities for comparable motion pictures.
The parties agree that the residuals due to writers under this paragraph I shallbe payable in the same manner and to the same extent as applicabletopay television and pay-per-view as provided in the following MBA provisions (subject to conforming changes as neceSS8JY):
Article 51.C.3. (foreign receipts and non-returnable advances);
Article 51.C.5. (allocation ofpro rata shares of residuals among writers);
Article 51.C.6. (time of payment. payment requirements, reporting, and exclusion from pension and health requirements);
Article 51.C.7. (gross participations); Article 51.C.8. (transfer and assumption); Article 51.C.9. (assumption agreement); Article 51.C.1O.(continuing obligations); and Article 65 (financial responsibility).
2. Other Exhibitions. For all other Internet-transmitted exhibitions ("other exhibitions"), including a sale of or license pfthe right to view the motion picture for an unlimited time, the parties acknowledge that the markets for such other exhibitions are evolving, and that the basis for payment of residuals shallbedetermined at a later time. Accordingly, in the event the AMPTP negotiates a residual formula with either SAG or the DGA with respect to other exhibitions of covered motion pictures, either: (a) the Guild shall have the right toelect the entire agreement reached with SAG or DGA with respect to the licensing of such other exhibitions, and only such entire agreement, but with appropriate equivalent adjustment for writers for provisions peculiar to actors or directors, as the case may be; or (b) alternatively, the Guild may reopen this agreement as to such other exhibitions on or afterJanuary I, 2007.
The parties reserve all of their respective legal positions with respecttosuch other exhibitions.
With respect to theatrical and television motion pictures, the Company has agreed to a separate payment for this use on the Internet because Internet exhibition isatthis time outside the primary market. The Company reserves the right in future negotiations to contend that the pattern of releasehaschanged so that this use constitutes or is a part of the primary market ofdistribution of theatrical or television motion pictures, and that, therefore, no additional payment pursuant hereto shouldbe made with respect to the exhibition of theatrical or television motion pictures (including those covered by this Agreement) on the Internet. The Guild reserves the right in future negotiationsto
SIDELETIER ON EXHIBITION OF MOTION PICfURES TRANSMITTED VIA THE INTERNET
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Very truly yours,
BY:---H<;3,---~~,t...:..::.~~R"~
JoiU)/KlcLean
Executive Director, WGAw
WRITERS GUILD OF AMERICA, WEST, INC., on behalf of itself and its affiliate,
WRITERS GUILD OF AMERICA, EAST, INC. contend to the contrary, and funber to assert that regardless of whether other exhibitions are or have become part of the primary market, payment provisions for writers of motion pictures so exhibited should be improved.
The respective signatory companies represented by the ALLIANCE OF MOTION PICTIJRE& TELEVISION PRODUCERS, INC.
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