The Directors Guild of America (DGA) announced on Thursday that it has reached a tentative three-year agreement with Hollywood studios over wage and residual increases.

Director Garry Marshall (C) walks with striking members of the Writers Guild of America, West during a rally in Hollywood, California Nov. 20, 2007. (Xinhua/Reuters, File Photo)

The agreement envisages the establishment of a new residual formula for paid Internet downloads and residual rates for ad-supported streaming and the use of clips on the Internet, the DGA said.

The agreement, which will be submitted to the DGA's National Board for approval on Jan. 26, was reached after more than five days of negotiations with the Alliance of Motion Picture and Television Producers (AMPTP), an umbrella group of Hollywood studios.

"This was a very difficult negotiation that required real give and take on both sides," said DGA President Michael Apted. "Nonetheless, we managed to produce an agreement that enshrines the two fundamental principles we regard as absolutely crucial to any employment and compensation agreement in this digital age."

"First, jurisdiction is essential. Without secure jurisdiction over new-media production -- both derivative and original -- compensation formulas are meaningless," he said. "Second, the Internet is not free. We must receive fair compensation for the use and reuse of our work on the Internet, whether it was originally created for other media platforms or expressly for online distribution."

According to the DGA, the proposed contract reached on Thursday ensures that programming produced for the Internet will be directed by DGA members and their teams. The exceptions will be lower-budget shows that cost less than 15,000 U.S. dollars per minute to produce, 300,000 dollars per program or 500,000 dollars per series.

The proposed contract more than doubles the residuals for paid Internet downloads. The DGA residual rate will be 0.7 percent for television downloads and 0.65 percent for film downloads, above a certain number of units downloaded. Below that number, residuals will be based on the current formula employees use.

The deal also calls for annual three-percent wage increases for primetime drama shows and daytime serials and 3.5 percent for all other types of programming.

"Two words describe this agreement -- groundbreaking and substantial," said Gil Cates, chairman of the DGA's Negotiations Committee. "The gains in this contract for directors and their teams are extraordinary, and there are no rollbacks of any kind."

In a statement, the heads of studios represented by the AMPTP said the DGA deal sets an important precedent of ensuring that the industry's creative talent participates financially in every area of new media.

"The agreement demonstrates beyond any doubt that our industry's producers are willing and able to work with the creators of entertainment content to establish fair and flexible rules for this fast-changing marketplace," according to the statement.

"We hope that this agreement with the DGA will signal the beginning of the end of this extremely difficult period for our industry," said the statement.

"Today, we invite the Writers Guild of America to engage with us in a series of informal discussions similar to the productive process that led us to deal with the DGA to determine whether there is a reasonable basis for returning to formal bargaining. We look forward to these discussions and to the day when our entire industry gets back to work."

The speed of the negotiations and agreement is in stark contrast to the AMPTP talks with the Writers Guild of America (WGA), which has been on strike since November. Contract talks between the two groups broke off Dec. 7, and no new negotiations are scheduled.

Writers are striking primarily over payment for work distributed online and through other forms of new media.

Los Angeles Mayor Antonio Villaraigosa urged writers and producers to return to the bargaining table.

"The film and television industries are the lifeblood of the Los Angeles economy, sustaining thousands of behind-the-scenes workers who can't afford to miss another paycheck," the mayor said.

(Xinhua/Agencies January 18, 2008)