A Letter from L.A. President Clyde Kusatsu

Happy new year and welcome 2015!

Our Los Angeles Local ended 2014 with another well-attended Los Angeles Host Committee Winter Celebration in December, with approximately 868 members enjoying the seasonal festivities. There was much to celebrate, considering what was accomplished in 2014: New three-year SAG-AFTRA theatrical/TV/cable/subscription video-on-demand contracts, a new three-year SAG-AFTRA Network TV Code contract, and a new three-year TV/cable animation contract. Sunday will also see the 21st Annual Screen Actors Guild Awards telecast with another viewing party planned for the Regal Theatre Live in downtown L.A., like last year.

In the fall newsletter, I wrote about keeping up with change. This year will see much of that change continuing in our industry. In this coming year, we can look forward to what was recently reported in the Los Angeles Times by market research firm S&P Capital IQ: “A critical mass of consumers has begun to opt out of typical pay TV subscriptions in favor of cheaper, so-called over-the-top alternatives from Netflix Inc., Amazon.com Inc., Hulu and others … Winners in the scenario will be companies that have already begun to adapt to the shift.”

The end of 2014 also saw the ratings for 21 of the top 25 cable networks trend down in the much desired 18-to-49 audience demographic. For example, NBCUniversal’s cable networks are off an average 8 percent, and even though it’s one of the top cable networks, USA will deliver its most profitable year from rising ad rates and increased digital revenues, though it will be down 12 percent in the ratings. This is part of the shift.

What are people watching? One example can be found in the video gaming industry, which was reported on by CBS News. Amazon recently spent nearly $1 billion buying Twitch Interactive, a video platform that streams computer and video games and attracts more viewers than the cable networks. It has also become a “spectator sport” that fans attend at venues like Staples Center in L.A. One game, League of Legends has 93 million unique players who also watch the best people play. Recently, this past October, 27 million people watched the League of Legends playoff championship, while a week later 14 million viewed the Major League Baseball World Series. To put it in perspective, the video gaming industry has seen $71 billion in revenues versus $48 billion in the music business, and it is quickly approaching the $91 billion movie business.

This year will also see the implementation of AB 1839, a bill that expands the previous California film and TV tax credit program for the next five years, and will hopefully make California a viable place to create film and TV content once again. That creates more business and employment opportunities — in other words, jobs!

Facebook CEO Mark Zuckerberg was recently quoted for a cover story in Time magazine: ”Whenever any technology or innovation comes along and it changes the nature of something, there are always people who lament the change and wish to go back to the previous time.” We as an organization understand this dynamic. We are working to be responsive to the shifting nature of our industry in order to remain relevant and insure that this organization will be viable, so that we may support and protect our members and our future members. Our core principles won’t change, but an organization that fails to embrace change will be overtaken, if not immediately, then eventually.

This item was originally featured in the January 2015 local newsletter.