Studios have cleared one of the many hurdles involved in distributing movies over the Net by agreeing to a payment structure for writers in the motion picture, broadcast, cable and new media industries.
Under the negotiated contract, writers will receive 1.2 percent of the fee a content exhibitor pays the license holder of the movie or television program that runs on the Net. That formula is used to pay writers whose work appears as pay-per-view on cable, and applies only to programs available online for a limited time.
"This takes away one uncertainty that could have hindered the development of [video-on-demand] Web sites, because sites want to know what the cost of talent will be," said Chuck Slocum, director of strategic planning at the Writers Guild of America, which represented writers in the talks with the Alliance of Motion Picture and Television Producers.
Both The Walt Disney Co. and Sony Pictures Digital Entertainment are expected to launch video-on-demand sites. Companies currently offering movies over the Internet include Alwaysi, MovieFlix.com and SightSound Technologies.
The writers made other gains on Internet issues, including residuals for TV, cable and foreign distribution. Negotiators formalized the WGAs current policy for writers who create material for the Net. Members can now receive pension and health benefits as part of their compensation.
Writers also gained monetary protection for work that first appears on the Net and is later used as the basis for a TV series or motion picture.
The sides didnt establish pay structures for compensating writers whose movie or TV program can be stored as a download or streamed for an unlimited amount of time, however. "We will get back together and talk further as business models evolve," Slocum said.
WGA members still must approve the contract.