The constant progression of technology gives rise to a vast array of digital media (how much longer will they have to exist before we no longer refer to them as “new” media?) and new ways to distribute and enjoy content. This brings about a reflection on the very future of the production of audiovisual works and the issues related to the management and the protection of intellectual property. Questions raised by royalty payments for audiovisual works exploited in digital environment are also a hot topic. In Quebec, the vast majority of collective bargaining agreements have been negotiated for the television and motion picture industries. However recent amendments have been added to specifically address exploitation of these works in digital environments. While distributors demand wider exploitation rights for all support and media, there are still very few television series broadcast (by legal means) on the web in Quebec. Why is that?
At this point, only the Canadian Broadcasting Corporation allows its Quebec viewers to stream their favourite series on the CBC Website1. The latest episodes of the “Invincibles” and “Tout sur moi” are available for the viewing pleasure of the new media spectator for a full week following the initial televised broadcast. Producers have begun to embrace the idea of digital distribution and are exploring different ways to distribute their content over the Internet. But what are the payments that might be triggered for Producers with the advent of this new distribution model? Let us turn now to the relevant collective agreements.
A word on the Status of the Artist Act2
Pursuant to this Provincial Law, every artist is free to join any artists’ association he chooses and to participate in its establishment, activities and administration. This association is entitled to recognition by the “Commission de reconnaissance des associations d’Artistes et des associations de Producteurs” (CRAAP)3 established by section 43. Once recognition is acquired, the association thus becomes the exclusive representative of its members (actors, scriptwriters, directors, etc.)4. Following recognition, the said association can bring the Producer to the table to negotiate a group (collective) agreement, which must include a model contract with minimum working conditions for the performance of services by the Artists.
We will examine the provisions included in the collective agreements pertaining to the exploitation of television series’ in digital media, more specifically, the collective agreement for the Producer association : the “Association des Producteurs de films et de télévision du Québec”5 (APFTQ), the Actor’s Association “Union des artistes”6 (UDA) and the “Alliance of Canadian Cinema and Radio Artists7 (ACTRA) and finally the Scriptwriter’s Associations: (the “Société des Auteurs de Radio, Télévision et Cinéma”8 (SARTEC) and the Writers Guild of Canada9 (WGC).
We will not address digital royalty rights for Directors for two main reasons: The Directors Guild of Canada’s10 (DGC) status has not yet been recognized as an association by the CRAAP and there is currently no collective agreement between Producers and Directors of English productions in Quebec as of yet. Regarding the Director’s Association of Quebec11 (ARRQ), the significant controversy arising from the recent decision on the collective agreement, along with the fact that it might be subject to judicial revision, makes the question of royalty payment for digital media the least of anyone’s concerns12.
Implemented in 2007, the UDA-APFTQ collective agreement contains a provision dealing with digital media delivery of content13. Pursuant to the collective agreement, a television series Producer must pay a Performer in a series, a royalty equal to fifteen percent (15%) of his gross revenues14 for the Web exploitation of that television series. Regardless of revenues generated, the Producer must pay to the Actors, in priority, a guaranteed non-recoupable minimum royalty equal to four percent (4 %) of paid (or payable) fees15.
For the digital delivery and exploitation of series’ produced in the English language under the ACTRA-CFPTA16/APFTQ collective agreement, the Producer will pay royalties equal to three point six percent (3.6%) of the Distributor’s Gross Revenues17.
The SARTEC-APFTQ collective agreement offers very little information in terms of digital delivery for television series. Appendix S establishes the creation of a Consultation Committee with a mandate to examine such questions. Consequently digital delivery is left to peer to peer negotiations between the Scriptwriter and the Producer. Some Producer may opt to pay digital royalties at the same time of purchase of the additional licence provided for in section 10.44 of the agreement (providing in particular for the exploitation of video games) by paying to Scriptwriters a five percent (5%) royalty of the Producer’s Profit (in the case of a submitted project) and of four percent (4%) (in the case of an solicitated project)18.
An analysis of sections A716, C1101 and C1103 of the WGC-CFPTA/APFTQ leads to the conclusion that a Producer may acquire digital exploitation rights for the scripts of a television series by paying a royalty equal to three point two percent (3.2%) of the Distributor’s Gross Revenue.
Although the above mentioned collective agreements offer certain guidelines; the percentages and methods used for calculating digital distribution/broadcasting royalties remain nebulous and puzzle the vast majority of people. Sound legal advice and caution are of course recommended before attempting a multimedia production20. That being said, the uncertainty surrounding the exploitation of audiovisual works in a digital media environment remains and consequently the solutions offered by collective agreements remain theoretical at best, even if sharing of revenue streams seems to be the most obvious equitable solution at this point.
In an ever changing and constantly evolving “new media” environment, how are we to apply a set of legal rules if the digital model has yet to settle on a fixed delivery medium for audiovisual works? We think a reflection focused on the future rather than on the adjustment/adaptation of past business models is better suited here.
1 With the exclusion of simultaneous web and television broadcasting
4 12 associations have a recognised status in the motion picture and television industry in Quebec www.craaap.gouv.qc.ca/Associations/index.html
12 This article was originally written on March 23, 2009, before the APFTQ and the ARRQ agreed to the terms for their latest collective bargaining agreement. Said agreement will be covered in a subsequent version of this article.
13 These sections are found in the « lettre d’entente no. 6 » of the collective agreement and are applicable for a 3 year period following the signature of the collective agreement. We now know that the TVA Group concluded, at the end of February 2009, an agreement with the UDA concerning the numeric delivery of television series produced in French by the TVA group and its affiliates.
14 Section 3.2 of the agreement defines « Producer’s gross revenue » as the proceeds derived from the numeric exploitation of the production, without deductions. It is also important to note that section 2.2. provides that in the event that a Producer grants Internet use and broadcasting rights to a Broadcaster, the cost of such a licence may not be inferior to 10% of the fees paid for classic residual use. The same applies to television on demand. These licences are deemed to constitute revenues according to the collective agreement.
17 See Section E209 of the collective agreement. Another payment option is available for the Producer whose production is guaranteed by an Approved Distribution Guarantor pursuant to A518 (b) of the agreement. Please see also sections E104, E301 and E303 of the agreement. For a detailed definition of Distributor’s Gross Revenue, see section B509 of the agreement.