Apple Signs With Writers Guild

The company has agreed to minimums and other terms even for ad-supported content, an apparent first.

In a move that knits an entertainment tech giant closer to the traditional warp and woof of Hollywood, Apple has signed onto the Writers Guild union agreement, the WGA announced Thursday in an email to members. In addition, said the union, Apple has agreed to enhanced terms such as script fees, weekly minimums and residuals even for free-to-the-consumer content such as ad-supported programming.

“These deal terms are significant,” said the email from WGA West leaders David Goodman, the guild’s president, and David Young, the executive director. “[T]he current MBA (Minimum Basic Agreement) does not contain minimums or residuals for projects on free-to-consumer services (think Crackle). Terms have to be negotiated on a writer-by-writer basis. Except, now, at Apple.”

And, said the missive, the Apple deal lays the groundwork for future improvements at Facebook and other free-to-the-consumer platforms.

“[W]hile almost all Guild-covered internet programming has thus far been under a subscription (consumer pay) model — like Netflix, Amazon and Hulu — Facebook has already launched shows on their free-to-consumer service," continued the email. "As this market develops, it will be imperative to negotiate MBA protections for writers creating content for such services. Our Apple deal moves us in that direction while the 2020 negotiations are still two years away.”

Two years away for the WGA, that is. The Directors Guild of America usually negotiates more than half a year before its deal expires, meaning that preparations and perhaps informal preliminary talks are likely in fall 2019.

The Hollywood Reporter has reached out to Apple for comment and the WGA for additional details, as well as to the DGA and SAG-AFTRA to see if similar deals are in the works at those unions.

It’s not clear how much Apple content will be on an ad-supported or otherwise free basis. Observers have generally assumed that Apple would unveil a subscription service at some point, to compete with Netflix, Amazon and Hulu. But little is actually known on this score, and the WGA deal could be a signal that Apple intends to include advertising in its offering. Whether the ads would be targeted is unclear. Apple CEO Tim Cook has previously highlighted that his company’s business model doesn’t entail selling data about users, in contrast to Google’s and Facebook’s, for instance.

The email cautions that the new terms only apply if the writer is hired directly by the new signatory, Apple Development LLC (which is not yet listed in the union’s online signatory database). However, the guild said it was “looking to assist members who are developing shows with other producers for Apple, Facebook, Crackle or other free-to-consumer platforms, in order to negotiate appropriate contract terms.” It urged such writers to call the guild’s contract department.

As tech companies become ever-bigger content providers, they have developed increasingly deep expertise in working with Hollywood unions and guilds. One of Netflix’s earliest original series, House of Cards, was produced under a specially negotiated deal, according to a source. Now, says the source, Netflix has Hollywood’s largest labor relations department, an assessment that could not be readily verified.

In addition, the 2014 and 2017 above-the-line guild negotiations specifically addressed minimums and residuals for high-budget SVOD content. But, ironically, it appears that Netflix was not in the room for those talks: The company is not a member of the AMPTP, the management alliance that negotiate most Hollywood union agreements with the unions and guilds. Only the six major studios, plus CBS and — essentially for historic reasons — MGM, are members and have a seat at the table. Netflix, a behemoth, and even Lionsgate, with greater market share last year than Paramount, are not members.