Hollywood insiders sharpen claws in battle for iTunes revenue
If Steve Jobs thought negotiating with the record industry was tough, wait until he goes head-to-head with Teri Hatcher and Eva Longoria. The "Desperate Housewives" stars are just some of the Hollywood insiders who are more than a little peeved about the backroom deal the Apple CEO cut with new Disney chief Bob Iger to get ABC TV programming included in the iTunes Music Store (not that the 'wives need an excuse to get all hot and bothered). Apparently, the unions representing actors, writers and the other folks who actually make the programs Jobs is hawking for $1.99 per episode, weren't consulted before he started ripping the shows to QuickTime and pitching them online. And now that the shows are being downloaded, the unions are sharpening their claws for a battle with ABC execs, who want to base payouts on the model currently used to pay DVD royalties — in which 20% of revenues is divvied up among writers, actors and the rest of the creative team — while the unions are pushing for a payout system based on the cable TV model, in which percentages are handed out based on total revenue. And while 3.6% of each $1.99 — the amount the Screen Actors Guild wants — may not sound like much, it can add up pretty quickly, if videos on iTunes do even a fraction of the business music has done. One thing is certain: Apple will continue to make most of its money on hardware, with the Hollywood types squabbling over the bulk of the entertainment royalties. That, and it might be a while before Stevie J. gets invited out to lunch at the Palm again.
[Thanks to everyone who sent this in.]
