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On closer inspection


Publication number: 2015-74
Authors: R. van der Noll, B. Baarsma and N. Rosenboom
Co-contributor: Jarst Weda
Commissioned by: RTL, SBS and NPO
Published by: SEO Amsterdam Economics

What position do filmmakers have?
The amendment of the law was justified by statements regarding the weak position of filmmakers. However, the data do not support those statements. Actors, scriptwriters and directors are often self-employed and, according to several studies, are better off than other creative professions and the general Dutch population in terms of income. Actors and, to a lesser extent, screenwriters are interchangeable to a producer, though, because there are many of them. This puts actors in a relatively weak negotiation position with respect to the producer. Similar situations can be found in other industries and in itself this is no reason to introduce additional government policy.

For directors, the situation is reversed: in almost 9 out of 10 cases the producer initially negotiates with one director only, the preferred candidate. The director's strong negotiation position is reflected in the income data. The scriptwriter's position is somewhere in between the two ends of the spectrum: in about half of the cases a producer will approach several scriptwriters at a time for comparison. A "take it or leave it" situation is rare; all three categories of filmmakers exert influence on the contents of their contract. It is estimated that a majority of actors use an agent to do the negotiations.

What are the consequences of the proportionally fair compensation that was introduced (art. 45d (2) copyright act)?
The act creates a second type of funding within the value chain, which is dependent on the operating result of the film and can be checked for ‘fairness’. This funding is seen as a replacement for the obsolete payments by distributors to collective management organizations (the so-called ‘cable money’). In principle, this additional funding causes a lot of confusion and uncertainty, firstly because an operator (such as a broadcaster) will now have to negotiate with more parties and secondly because the total cost can only be estimated properly at a later stage. Financiers of television or film productions require clarity about the cost and the acquired rights. The transaction costs for all parties related to the additional funding and the coverage for uncertainty are a deadweight loss; no one in the chain of filmmaker will benefit from these expenses.


Category: 2015, Nicole Rosenboom