Prominent actors such as Richard Dreyfuss, Jerry Stiller and Barbara Feldon of "Get Smart" fame joined unionized colleagues in New York City's Bryant Park and across the nation Monday for the first strike in 12 years against the advertising industry, which is flush with profits from the unprecedented American economic boom.
The strike, which affects actors in commercials broadcast over television, radio and the Internet, took effect at 12:01 a.m. EDT, after the breakdown of negotiations on April 18. The collapse in negotiations was between the 135,000-strong membership of the
Screen Actors Guild
American Federation of Television and Radio Artists
, two of the nation's largest actors' unions, and the
Joint Policy Committee
Association of National Advertisers
American Association of Advertising Agencies
The actors say the advertising industry, which has benefited enormously from the vibrant U.S. economy that has generated substantial ad sales and market-share growth in the past few years, should share more of the wealth.
"The intention is to shut down as much production as possible," said Greg Krizman, a spokesman for the Screen Actors' Guild.
Whether that will happen, however, depends on how long the strike lasts. The industry had anticipated a strike, and some analysts say it could take several weeks for the disruption to have an impact. The last such strike, in 1988, lasted three weeks.
The negotiations began on February 14 in New York City and center on the pay-per-play formula long used for paying actors in commercials, where actors are reimbursed based on how many times a commercial airs in an advertising cycle. The advertisers want to scrap that formula and institute a fixed-fee formula, where actors are paid one rate for each commercial, no matter how many times it airs.
The unions also seek to extend the pay-per-play formula to commercials on cable television, to devise a payment structure for commercials that appear on the Internet and to institute a system to monitor the use and frequency of television and radio commercials.
"In an age of unprecedented prosperity for both the advertising and entertainment industries, management is crying poverty and wants to roll back the gains working actors have made over the past four decades," said William Daniels, SAG president, in a statement. "To not allow performers their fair share of the wealth they create for others is wrong; asking for rollbacks in this time of economic growth is insulting."
The advertising industry argues that the pay-per-play formula is obsolete, saying that it was instituted in 1965 when three television networks reached the majority of the American population. Currently, there is an entire smorgasbord of network and cable television channels that reaches the same viewership.
Hoping to minimize the impact of a strike, the industry has fortified itself, rushing to complete many commercials ahead of the May "sweeps" period, which started last week and ends May 24. During "sweeps," advertising rates for the next television season are set, as television networks schedule special programs to strengthen ratings. Advertisers typically pay more for commercials that air during this period.
In addition, the top advertising agencies in the world -- including
Interpublic Group of Companies
-- derive only 20% to 25% of their revenues from advertising in the U.S. and only half of that is television advertising, according to James Dougherty, an analyst at
. "Disruption is never good, but it's not that big a deal anymore," he said.
In a statement, John McGuinn, the chief negotiator for the advertising industry, said it would "implement its strike contingency plan in order to continue production as usual during a strike," using nonunion actors.
But the strikers are betting such advertisements will flop. "Twelve years ago they tried the same thing and not one hit the air because it was so bad," said Krizman. "How much money are you going to save if you have to do 50 takes when a professional union actor requires only six or seven?"
The advertisers also say they will go overseas to shoot, if need be. "But most commercials shoot in a day," Krizman said. "Are they going to fly in a bunch of people someplace, put them in a hotel and pay a per diem for a day?"