Sideletter N is a part of our bargaining agreement with unionized studios that addresses New Media (also called Streaming Media) work. When it was implemented in 2009, Sideletter N provided “freely negotiable terms and conditions” for New Media. It wasn’t until 2015 that Sideletter N wage minimums and improved working conditions were included in the CBA. Then, adjusting the budget tier definitions in 2018 and 2021 broadened the scope of productions that had to abide by these improved terms.
Though establishing New Media as covered work within the Guild was essential, there are some noted disadvantages to the sideletter. The terms for work on New Media productions are different from the terms of the main agreement. The logic behind these reduced conditions at the time when the Sideletter was created centered on the argument that the business models and profitability of New Media had yet to be seen. To keep up with the changing media landscape, the terms of Sideletter N are improved upon each negotiation cycle.
Streaming Media is a large and growing part of the entertainment industry. Since the previous two negotiations cycles, the industry has seen the launch of Disney+, HBO Max, and Peacock, with Disney+ alone bringing in a record-shattering 160 million+ subscribers). Over the same period, existing streaming giants like Netflix and Amazon Prime Video continued to grow and profit. It’s clear: Streaming Media plays an integral role in the entertainment industry. Because of this we were able to make the following gains for our 2021 Memorandum of Agreement:
- Established wage minimums for derivative and original work. What does this mean? Previously, programs that fell under the High Budget threshold provided for freely negotiable wages. Now, derivative and original productions of at least 11-minutes in length and budgeted at $25,000 or more per minute are subject to wage minimums equal to the current rate less 15%. This has increased the number of productions that will be guaranteed wage minimums.
- Removed the grandfather clause. We have attempted to stop the practice of using language from previous agreements (“grandfathering”) that allows shows that were produced on or before the current agreement dates access to rates and terms associated with older contracts. For example, shows like Dragons: Race to the Edge were able to take advantage of higher budget thresholds and continue using freely negotiable terms and rates. Now, as of Aug. 1, 2023, shows can no longer be grandfathered and will be subject to increases negotiated in this and future contract agreements. We have been working toward this change for years!
- Lowered high budget thresholds. We were able to get employers to match the “high budget” thresholds gained by SAG-AFTRA. Animated High Budget SVOD are subject to additional contract benefits, including paid holidays and overtime, dismissal pay, and accrued holiday pay. Lowering the threshold increases the number of productions that will be covered. However, the new threshold will not apply to shows that started production on or before Aug. 1, 2022.
Full budget threshold details for Sideletter N can be found in the Memorandum of Agreement.
Additional details can be found in the Unpublished Sideletters for Apple, HBO Max, Peacock, and others.
Sideletter N FAQs
New Media refers to media produced for distribution over the internet. Streaming shows and movies whose original distribution was over the internet would be considered New Media. There is New Media language in the IATSE live-action agreements as well as the Guild’s agreement. The language is changed slightly to address some differences between live-action and animated content. New Media and SVOD (Subscription based Video On Demand) is the language used in our contract, but some prefer it to be called Streaming Media.
Sideletter N is complicated, but in a nutshell these are the terms it established:
- Creating a definition for what would be considered New Media within the Animation Guild agreement
- Establishing budget thresholds to differentiate between experimental, original, and high budget New Media productions
- Establishing terms that included wage minimums, benefits, and protections for workers on New Media productions based on these budget thresholds as well as seasons of the production (for serialized shows)
Yes, all of the entertainment unions have made compromises. For above-the-line unions (DGA, WGA, SAG-AFTRA) these compromises currently take the form of lower residuals. For IATSE locals like the Animation Guild, these compromises are reduced wage minimums, as well as a reduction in holiday and vacation pay.
Productions are required to report their budget tier for Sideletter N to the Guild. Send an email to firstname.lastname@example.org to learn what tier your production is classified under.
Don’t worry — you’re not alone! Sideletter N is a nuanced portion of our contract that can be difficult to parse. We want every member to be able to understand the work that they’re doing, and part of our efforts to help streaming productions gain parity with broadcast is trying to make understanding the differences easier for you. The most reliable way to learn more is to contact the Guild Office; a staff member will be able to provide the most accurate information specific to your working experience. Fill out the contact form on the right to get in touch, or send an email to email@example.com.
New Media productions can fall into one of three different budget thresholds:
- High Budget – Tier 1 are programs with the highest budget per minute
- High Budget – Tier 2 are programs with a medium budget per minute
- Not High Budget are programs with lower budgets. Additionally, any program under 20 minutes long is considered Not High budget. Please refer to the chart below for further details.
These classifications are defined by the length of a program versus the budget of that program. “Program” here means an episode of a show, a movie, or other individual unit of a media production.
Very few productions fall under the Not High Budget threshold, and even fewer productions fall under High Budget – Tier 1. The majority of Sideletter N productions are covered by High Budget – Tier 2.
Full descriptions of budget tiers begin on page 32 of the Memorandum of Agreement.