According to a Hollywood Reporter article, Hollywood's major studios are not willing to give way on residuals, which they supposedly rely on to offset the pressure of spiraling production costs, shifting markets and new technology. The studios will cry that their film and television projects on average run deficits, and therefore they cannot pay the residuals the writers want.

The Writer's Guild has made it known that the DVD formula, which pays 1.5% of the first $1 million of employer's gross and 1.8% thereafter, is too low when considered that the employer's gross is 20% of the wholesale receipts of the distributor. The 2001 negotiations failed to change this forumla, though writers were given $5,000 for the right to publish the screenplay on the DVD. The guild estimates that writers receive $1 for every $300 in DVD revenue received by the major studios.

"This is hardly a 'screenwriters only' issue," Petrie said in a negotiations update published Tuesday. "DVDs may become the new syndication. For television writers, the later broadcast runs may soon be replaced by the boxed set -- and what used to be healthy syndication revenues would be supplanted by abnormally low DVD residuals."

(DID YOU KNOW: The average payment to a feature writer or team in 2003 was $654,000 based on the contract's guaranteed minimum.)

(Source: Hollywood Reporter)