A King's Ransom, The Content Kind

by Joe Mandese, Jul 16, 2012, 4:24 PM

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If content truly is king, then be prepared for Madison Avenue’s brand-generated content to be held for a $3 billion ransom.

That’s what Douglas Wood, senior partner at Reed Smith LLP, and the ANA’s chief counsel, more or less suggested will happen next year when the by Hollywood talent unions – SAG and AFTRA – try to get their hooks into the kind of digital marketing content that is not currently classified as “advertising” or “commercials” and therefore does not fall under current contract provisions between Madison Avenue and its commercial talent pool.

Speaking during the Q&A portion of his presentation at the ANA’s Digital and Social Media Summit today, Wood threw the $3 billion number out there, suggesting that might by the contractual value of some testy negotiations he anticipates taking place between ad industry and the Hollywood unions.

“The unions desperately need to capture the content that you are putting on the digital platforms,” Wood advised a roomful of marketing execs. He indicated the negotiations likely would be tenacious, drawn out, and could lead to the first significant labor action (ie. strike) by Hollywood’s talent unions against Madison Avenue in years.

He cited several reasons, including the fact that the unions are desperate to “capture” talent revenues from some of the new forms of brand content – especially user- and brand-generated video – in order for them to survive and to pay pension and health plans as the industry shifts away from conventional commercial content production.

“That’s where they see the real money,” Wood said, adding that the unions will try to “redefine what a commercial is in terms of video.

Wood advised the advertisers to produce any commercials they are planning for next year during the first quarter of 2013, before any labor action manifests.

“You won’t be able to get actors,” he warned. “It’s that serious.”

From the ad industry’s standpoint, he said he will be equally important for Madison Avenue to dig in its heels, because he said it may not be possible to determine what the long-term economic impact of changing the definition of “commercial” content might be in terms of talent and residual fees paid by advertisers.

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