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The pace of technological change means it’s time to rethink talent fees

Friday January 4, 2013

With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

Darren Woolley Trinity P3

This post is by Darren Woolley, Founder of TrinityP3.

An article in USA Today proclaims that television networks in the USA have hit the tipping point where viewing of content they produce is so fragmented due to technology that they need to look for new sales models for advertisers.

Interestingly, advertisers still pay the talent that appears in the ads that pay for the content the same way they have for more than 20 years.

It seems that while technology is driving change and providing more ways to view content, including advertising, the commercial arrangements behind the advertising has not. In most cases there is a very traditional view of the media landscape underpinning the way actors are paid for appearing in commercials.

Now this is not about paying actors less money. It is about simplifying the process of determining and managing the fees paid to actors for their talents and exposure. And for clarity, I am talking about actors and not celebrities, someone engaged to perform a role or part, selected for their abilities to deliver the performance and not because of the celebrity they bring to the role. Celebrity endorsement is a very different and distinctive value proposition. There are a number of factors currently used in determining an actors’ fee for commercials:

  1. The role - such as lead, support or non -speaking
  2. The number and duration of the performance/s
  3. The channels – free to air television, subscription television, cinema, internet, etc
  4. The exposure - including number of showings and the timeframe
  5. The geography - being one market, multiple markets or global

These are the two parts of the value chain for an actor’s performance - the performance (the ‘work’ that they deliver on the day) and the rights to that performance that they effectively licence. 

Lets look at the relevancy of each of the factors in the marketplace and the possibility they hold in achieving a simpler, more manageable system.

1. The role

Of all factors this is the only one still relevant. The idea of an actor being required to carry a lead performance or provide a supporting role or provide a performance without a speaking part is a reasonable categorisation of a performance.

2. The number and duration of performance/s

Most talent agreements look to the number and length of “commercials” but the idea of 15, 30 or 60 sec performances is TV and paid media centric. In the digital world duration is largely irrelevant, with longer forms and multiple versions popular. The work is more related to the time taken to capture the performance, ie the time taken to shoot a talking head delivering a line to camera compared to a long form monologue or a complex CGI spot. The time and effort expended in delivering the performance is an important consideration in the value the actor brings to the equation.

3. The channels

Technology has had huge impact on exposure with more channels and devices to view content, including advertising, than ever before. Computers, tablets, smartphones, gaming devices, POS screens, cinemas, venue screens, OOH sites and the list grows. Yet as the audience grows on one channel, it falls on another and without the delivery of larger audiences there is no additional value for the marketer. Perhaps a simpler approach is to consider screens not platforms, as the distinction is becoming increasingly irrelevant.

4. The exposure

The approach of linking actors’ fees to the size of media budget or number of spots is definitely based in the broadcast world. Online audiences choose to watch content, so the audience not the advertiser determines the views. And the reason for these views is rarely performance alone. 

5. The geography

A tough one because while the advertiser may want to promote their brand in a particular area to a particular audience, the internet makes it next to impossible to guarantee. Some mechanisms are in place with digital downloads and ad-serving and the like for copyright reasons. Of course broadcasting did not have this problem, but within reason the marketer (and agencies) can limit exposure where they have the control and mechanisms to do so.

It is ironic though that actors (and agents) threaten prosecution if an ad appears online outside of their contractual arrangement, but turn a blind eye to agencies and production companies doing the same for self promotion. In fact the content of award shows has become a popular channel itself with websites earning income using commercial performances as the content.

The need for change

Technology is changing the media landscape radically and actor’s fee calculation has not kept pace, making the process complex and difficult for all.

The ideal starting point to simplify the process is identifying where actors deliver the value - the two clear parts being the delivery of the performance and the rights to use that performance.

Without simplification, marketers and agencies will increasingly look for alternative ways to achieve their needs including using non-union actors or turn to markets where requirements are less restrictive and cumbersome.

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