The Cost of Talent in a Multi-Platform World

The Wall Street Journal takes an interesting look (registration req.) at how actor royalties are shooting up as media gets pushed out to multiple platforms. This is only going to continue. As video becomes more prevalent online and even on the phone, the cost of talent will become a growing issue. From the story:

Earlier this month, the ad industry and the unions met to begin preliminary talks. They discussed a joint study of alternate methods to compensate performers for their participation in commercials, although they haven’t formally agreed to commission such a study.

“We recognize there are a lot of new technologies where you can place ads, and it’s going to add to the complexity of the contract unless we can come up with a different system,” says SAG’s Mr. McGuire.

Ad firms are hoping for a major overhaul. Over the past few years, marketers have put pressure on ad firms to cut costs. Steve Humble, director of broadcast production at Interpublic Group’s Martin Agency, was part of a team that recently had to cut costs for a coming TV ad for Miller Genuine Draft beer. The team amended the spot to include three actors, instead of five. The reworked spot, ad executives say, is typical of the process going on these days as agencies seek to keep talent fees down.