• by Wayne Friedman , March 12, 2009

Television ratings fragmentation is now coming into play with the advertising industry's new contract talks with the two main actor unions.

With the ad industry's contract expiring at the end of this month between the actor unions (the Screen Actors Guild/American Federation of Television & Radio Artists) and advertising groups (the Association of National Advertisers/American Advertising Agency Association), the advertisers now want to shift to a payment system of gross rating points rather than the traditional decades-long pay-per-play formula.

The ANA/AAAA says actors under this new plan would get $900 million in annual pay--a similar amount to what performers already receive. This would include cable as well as network airing of commercials. But TV ratings fragmentation and erosion could contribute to lower fees to performers, according to analysts.

In response, the actors' unions have been asking for a 6% annual salary gain over three years, as well as keeping the pay-for-play formula.

Two weeks ago, the ad industry and the unions began negotiating. Initially, according to ANA officials, the two sides were far apart when talks started.

The unions want better pension and health benefits from advertisers. But the ANA industry has long complained that its members--the advertisers--already pay a much higher portion of these benefits than movie and TV producers.

Commercial TV producers want a cap on such contributions--something the movie and TV producers have had for some time.

Other union demands include: that if athletes are hired for athletic performances, they should be "principals"; receiving larger fees; that actors receive new additional fees for Internet and new-media exposure of commercials; and that actors get a "holding fee" for made-for-cable commercial work.