Striking Gold.

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In a recent spot for Burger King, the Backstreet Boys sit in an airy high-rise office, their toothy smiles dissolving into skeptical smirks as their fictional manager tries to slip something past them. He tells the band their contract requires them to perform not only in the usual music videos, but in commercials as well. "Forget it!" they balk. "We don't do commercials." But it doesn't take long to sway the boy wonders to do a spot. The offer? A lifetime supply of Whoppers.

It actually took a lot more than all-you-can-eat burgers to get the commercial underway. Agency Lowe Lintas/New York and L.A.-based production company MJZ took off to Canada in order to get around the current commercials strike, which for five months has impaired, if not stifled, the advertising business. Since May 1, the industry and the 135,000 striking members of the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA) have been at odds over how to rework the current payment structure for actors' performances in commercials. The actors are struggling to retain a pay-per-play residual system for networks. They'd also like to extend residuals to cable and have jurisdiction over commercials specifically produced for the web. Advertisers, on the other hand, have proposed a network and cable flat-fee payment system that compensates the actors for each 13-week cycle during which a commercial runs. As for the web, they say they're willing to talk when such productions become a reality.

"The ad industry has not been hurt," claims Ira Shepard, Counsel to the Joint Policy Committee (JPC) on Talent Union Relations of the ANA/AAAA. Shepard says that production levels since May have been strong, at 80 to 100 percent of what it's been in non-strike years.

The numbers show no significant dent in production totals, but they fail to reflect injury to local economies as well as inconvenience to the industry in the past five months. Actors have picketed advertiser headquarters, agencies, and production companies, and have disrupted commercials shoots for big guns like AT&T, GM, Procter & Gamble and McDonald's, as well as smaller projects. On a New York shoot for YouDecide.Com, "I found myself shooting with hundreds of chanting picketers, people trying to reflect with mirrors light into my camera lens, news crews showing up all day to interview us," says Mark DiMassimo of DiMassimo Brand Advertising. "Somebody snuck in and tried to turn off our air conditioning -- so it's difficult. It's created tension."

In effect, such activity has driven production out of major cities like Los Angeles and New York. "L.A. is most affected in that it's more ensconced than anywhere else," says Jeanne Bonansinga, national president of the Association of Independent Creative Editors (AICE), which has about 120 members. Recent figures from the Entertainment Industry Development Corporation (EIDC), a public/private sector partnership that oversees the LA. film office, show that there were 1,102 days of commercials production from May through August, compared to 2,180 during the same period last year -- a 49 percent drop. According to EIDC VP Morrie Goldman, this translates to about $1 million a day in lost revenue to the city.

"I think it's a conspiracy with the Canadian Tourist Bureau," jokes Bill Oberlander, managing partner and executive CD at Kirshenbaum Bond & Partners. Like many other agencies, his shop has had to take several productions to Canada, and the gush of new work there has left producers hard-pressed for resources. "They've maxed out," says Gary Ward, executive producer at Crash Films, Santa Monica. "On shoots we've done recently, the [Canadian] cities have become so packed with production you're really on the edge. You're having trouble finding crews and equipment." Shoots have also gone to countries like Italy, the Czech Republic, and South Africa. The exodus only exacerbates the industry's growing concern over runaway production. "Normally, our work is 30 percent out of the country," adds Ward. "We're probably at 70 now, maybe even 80 percent." Says Nitza From, president of AICE's New York Chapter, "We're all scared going out of the country because when that happens, some of that work will get lost forever."

When it comes to hiring talent, agencies and advertisers must go without SAG/AFTRA performers unless they sign interim agreements, which require them to abide by the contract demands the union put forth right before the strike. Only after the strike is settled would payment terms change. Some don't see this as a loss. Director Marcus Nispel, who caused a big industry stink with his sagging breasts ad in SHOOT last May, told Creativity, "I hate to say it, but I can't tell the difference. It's not like you're dealing with Demi Moore or Bruce Willis. It's not Shakespeare in the Park. It's I Can't Believe It's Not Butter."

Others, however, say it's impossible to be effective without union talent. L.A.-based director Joe Pytka refuses to cross the picket line. "My feeling is that you can't do a really good commercial without really good actors," he told CNN in early August. "And SAG has all the really good actors. You're not going to find a good actor in a talent pool of unprofessionals, especially these big-budget, emotional commercials, the kinds I like to do."

For agencies working non-union is admittedly a difficult proposition. "The creatives are very frustrated because they feel they want performers they know and like," says a broadcast exec at a major New York agency. "They've had to work harder to come up with alternative ideas." Such new ideas include dropping or giving less prominence to actors and voiceover talent during the creative conception of commercials, turning more to graphics, or using reality-based scenarios that don't require slick performances.

Some insiders say that the obstacles imposed by the strike could, ironically, spawn an industry renaissance. "Going out, finding new ways and new ideas, maybe even moving to other mediums, all of these encourage creativity," believes DiMassimo. "Problems lead to inventive solutions, and big problems lead to the need for much more inventive solutions, so I think on whole it's good for an industry that's used to doing things the same way over and over again. Even though we're an industry that at its best worships at the altar of creativity, we often don't acknowledge to ourselves how difficult it is to be creative the next time around."

"The one area that's been difficult is when you have a campaign that relies on celebrities," explains the New York broadcast head. For example, the strike has at least temporarily severed alliances between MasterCard International and two-year spokesperson Billy Crudup; Volvo and Donald Sutherland; and Honda and Richard Dreyfus. The same goes for Burger King, which used to drip the sultry voice of Kathleen Turner all over its food. BK rep Kim Miller says the advertiser had to go with non-union performer Gai Crawford to carry on the seductive tradition in its latest spots. Union execution also makes a difference. "There's nothing like a union voiceover," admits the New York agency exec. " They really know how to deal a line within 20 seconds. It's hard to find good voiceover talent that's non-union."

Agencies and advertisers have tried to keep their spokescelebs speaking. "I checked around at all our companies, and there's been a lot of recutting of old commercials, re-editing the old dialogue," says Patrick Howley, general manager at New York's Post Perfect. "That's the agencies' way of coping with the strike." Earlier this summer, Dodge and agency BBDO/Detroit retained spokesman Edward Hermann's voice in new commercials by piecing together voiceover work the actor recorded prior to the strike. "We picked the vocabulary from everything that was already said," explained BBDO/Detroit chairman Dick Johnson to the San Diego Union-Tribune in July.

"Casting is more difficult," says Tony Harding, executive producer at Conspiracy Film, New York. "On a normal casting session, with five principals you have one day of prep and then you'd cast for one or two days and a day of callbacks. With non-union casting, we need to put more prep time into it." Danny Goldman, an L.A.-based casting director, says it can be even more extreme. "On certain things, agencies cast in 15 cities as opposed to one," he says. "It's brutal. First of all, the non-union talent is not great. In an ordinary union thing, there are usually 40 people on tape, and anyone can do the job. The agencies are very picky. Is the left eye bigger than right eye? Is that a mole over her lip? Those days are over. They can't be so picky. Some agencies understand that, but some people play like it's business as usual."

The strike may be a boon not just to non-union talent, but also to the small and medium-sized agencies, which are accustomed to producing under low-budget limitations. "I think there's an advantage to smaller creative shops, because if they've done TV, they know where to go since they rarely have budgets to do a full union production," DiMassimo explains. "I think the really passionate creative agencies will make some great lemonade out of these lemons. On the other hand I fear, or I expect, or maybe even hope, that the big boring agencies will find big boring solutions."

Suffering is most acute for the affiliated industries like suppliers, casting agents, craftspeople, and cameramen -- the U.S.-based resources left in the dust of the production exodus. In late August, talent agency Cunningham Escott DiPene suspended its Chicago operations because of the SAG/AFTRA strike. "Business is down 15 to 30 percent as a result of the strike," says Ed Clare, president of the Production Equipment Rental Association (PERA), which includes about 150 suppliers. The situation has also been dire for L.A. cameraman Allen Betrancourt. "If the strike goes on for another three months, I will lose my house," he wrote on the Camera Guild website during the strike's early stages. "Right now, I am paying my mortgage on credit cards." Luckily Betrancourt recently found an agent, but worries remain. "The strike's still a very dangerous thing," he says. "Although a lot of SAG's people make only a percentage of income with commercials, we as cameramen make 100 percent of our living from it."

The fate of struggling secondary parties lies in the hands of the dueling advertisers and actors. At press time, the sides were finally showing signs of movement. In their third meeting since May, they actually sat down in discussions with federal negotiators for more than seven days. Prior meetings to resolve the strike lasted no more than two, with both parties unyielding in their demands. To commercials actors, residuals are the only way to be fairly compensated in an industry where landing work is difficult and their earning potential limited. Commercials can be risky because once an actor's image becomes associated with a particular product or genre, there's the undeniable possibility of his overexposure. It's then likely that ultra-finicky advertisers will shy away from using his image for other campaigns.

Advertisers say the payment scheme they propose is the most reasonable and workable system for compensating actors, considering today's media environment. The original residual system, established in the 1950s, was based on a three-network model in which advertisers were sure to reach at least 90 percent of TV households. Today, eyeballs have drifted away from network to the ever-expanding offerings of cable and satellite, reducing the reach of a network spot to about 50 percent of viewership.

"It's almost like the Arab-Israeli war," says casting director Goldman. "The issue of residuals pay-for-play on regular network TV is like Jerusalem to the actors. The whole idea that they'd have a flat fee is impossible to accept. It's an emotional issue. On the advertiser side, the residuals for cable are unheard of. With cable, you don't know exactly what's going to show. It's extremely difficult to do the math."

Both sides continue to rally their resources. For advertisers, production continues and commercials specifically geared for the Olympics and the back-to-school season have succesfully made it on air. The actors' unions, in the meantime, have garnered huge support from big-name talent. The Dixie Chicks turned down a multimillion dollar endorsement deal with Coca-Cola in July because the client refused to sign the union interim agreement. Tim Robbins, Susan Sarandon, and Tom Hanks have cheered on strikers in major media appearances, and Kevin Spacey and Harrison Ford have contributed large sums to a union strike relief fund.

Despite the inconvenience and bad press, the typical industry response to the situation has been a flaccidly diplomatic "I hope both parties come to the table and come up with an agreeable solution." Others, however, are more forthcoming. "I truly wonder if [the actors] accomplished anything," says Mark Thomas, executive producer at Area 51, Santa Monica. "The rule in labor is that if you're going to strike, you're going to shut an industry down. That didn't happen. They relocated an industry, but they didn't shut it down."

But Nick Cohen, chief creative officer at Mad Dogs & Englishmen, sympathizes with the union performers because he sees a parallel between auditioning actors and agencies. "We're always very against doing speculative pitches for clients, and there's always some movement that we should get paid fees to do pitches," he says. "But we do the spec pitches on the basis that if we get it, it'll be lucrative and worth it. We expect our clients to pay us really well, but when an actor goes through the same process, they don't want to reward them. Imagine if the clients turned around and wanted to limit the fees paid to the agencies. That would be a similar thing. I think [most] ad agencies' attitude is, 'We don't give a shit, we'll go off and make commercials in Canada.' It's like, 'Screw you.' I think it's really unappreciative of the amazing thing that actors do."

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