(FORTUNE Magazine) – And speaking of actors: as head of the Screen Actors Guild, A. Robert Pisano is supposed to protect the thespians who make Hollywood dramas. But these days he’s starring in a drama of his own.
Earlier this year the guild began bargaining for a new contract with the Association of Motion Picture and Television Producers (AMPTP). The union wanted AMPTP studio members to give them a bigger share of DVD movie sales. As it stands now, screen actors get only about 15 cents in residuals for every $20 DVD. Yet profits from DVDs have fattened studios’ bottom lines and lifted a slew of new businesses, such as Netflix Inc., which with a market capitalization of $1.6 billion ranks as the world’s largest online DVD rental firm. As Netflix notes in its 2003 annual report, “DVD is clearly the rocket propelling studio profits and growth.”
The actors believe they have a persuasive case, but some SAG members doubt that their chief negotiator Pisano can strike a fair deal. Pisano is SAG’s national executive director and chief executive officer. He is also one of seven directors who sits on the board of Netflix. “There’s no way he should be in a collective bargaining position,” says Scott Wilson, a SAG member. According to Netflix’s annual report, one of the biggest risks to its future is “potential labor activism,” like SAG’s demands for higher DVD residuals. “How does a director of such a company represent a union that uses strikes as its only leverage?” SAG member Tom Bower asks.
