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Hollywood's labor negotiations resumed this week against the ugly backdrop of a slumping national economy, spreading credit woes and rising unemployment, not to mention the lingering effects on local businesses of the lengthy Writers Guild strike. Clearly, now would be an auspicious time for the Screen Actors Guild and the major Hollywood studios, which began formal negotiations Tuesday, to come to terms quickly on a new three-year deal. If only wishing could make it so. The studios drew a firm line last week, telling the guild (and the American Federation of Television and Radio Artists, a second actors union whose negotiations are scheduled to begin April 28) to stick to the framework laid out by the writers' and directors' deals. But the guild's leadership is seeking better terms in at least two key areas, home video and new media.

To complicate matters, the actors' ranks are divided into several camps. AFTRA, whose members work mainly on daytime TV, cable and talk shows, canceled plans to bargain jointly with SAG, which represents mainly feature film and prime-time TV actors, after a tiff over turf. And SAG is split between actors who make a living off of their performances and the thousands of members who are, at best, part-time practitioners of the art. The former fear that the latter will cling to unrealistic demands, leading to another debilitating strike. But the SAG board rebuffed a proposal from more than 1,400 members to limit voting on the new contract to those who act professionally at least one day a year.

The studios aren't likely to give the guild a significantly sweeter deal than they gave the directors and writers, but they can help it on some top priorities. Actors complain about their middle class being squeezed and about stunt and background performers being historically underpaid. The studios should think creatively about how to reallocate production budgets to help sustain career actors. They also need to be sensitive to the complaints by actors that aggressive product-placement deals can turn stars into shills, to the potential detriment of other endorsement deals those actors might make.

But actors also need to recognize how much the Internet, wireless communications and digital devices are changing the market for video entertainment. Plummeting production and distribution costs have forced the networks and studios to compete with new programmers from around the world. As the audience fragments, advertisers will inevitably spend fewer dollars on channels and programs that no longer dominate prime time. Networks need to chase viewers into more places, online and off. The trick for actors will be finding a way to share in Hollywood's success online rather than trying to limit what studios and start-ups do there.

"" Los Angeles Times

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