A Reuters/Hollywood Reporter story posted on Yahoo news [http://news.yahoo.com/s/nm/20051017/media_nm/writers_ipod_dc] considers whether the "cable model" or the "DVD model" is the appropriate royalty example:
WGAW continues to believe that the proper formula is the existing one covering pay television. That entitles writers to 1.2% of the entire producers' gross. DGA has an identical formula, while SAG gets 3.6% and the International Alliance of Theatrical Stage Employees (IATSE) gets 5.4%.
The DVD formula, by contrast, is much less lucrative for all of these guilds because it pays a slightly higher percentage based on only 20% of the wholesale receipts. The remaining 80% is withheld by the studios to cover manufacturing, distribution and marketing costs.
Interestingly, a key point in the debate seems to be the commodity status of a download -- is it a transmission, like a cable TV signal, or a product, like a physical DVD? A further article in Variety [http://www.variety.com/article/VR1117931052?categoryid=1066&cs=1&s=h&p=0] sheds some more light on this distinction:
All the guilds operate under a DVD residuals formula that has been in place for two decades. The rate -- which allows studios to exclude 80% of gross revenues prior to calculating residuals -- was tilted toward studios to help the fledgling videocassette technology at the time.
As a result, the credited writers of a moderately successful film selling 1 million DVDs and generating $15 million in wholesale revenues would split a payout of around $50,000, compared with an estimated $10 million profit for the studios.
At negotiations last year, all the guilds failed to budge studios from their resistance to changing the formula. The studios contended that DVDs were not ancillary income; they essentially kept studios afloat with only one in 10 features recouping costs from domestic box office and only four in 10 recouping after all revenues come in via foreign box office, TV and DVD.
With the battle over royalty rights in for-profit broadcast content heating up, we should not forget that much of the activity behind "video podcasts" actually comes from the free labor of activists, enthusiasts, and artists who currently provide their product/service for free. Ironically, Apple computer may be contributing to this side of the question as well, as it announced that its new consumer iMac models would now come preequipped with onboard video cameras -- ready out of the box for grassroots first-person podcasts of all sorts. Whether people consider such activities as labor or entertainment, at least such experimentation might remind audiences that crafting video productions takes time, effort, skill, and ... work.