I had to explain to a non-industry person what residuals are and why they are so important to writers, actors and directors. I realized that most people don’t understand the concept of getting paid for your work beyond the initial “job”. So I thought I’d share some background here on what residuals are for those of you who aren’t in the biz.
What are residuals
Residuals are compensation for film and TV work every time it is re-aired (reruns) and sold or rented on home video and online (TVOD). Residuals have been part of the financial structure of the entertainment business since the radio days. In the 1930s, performers would have to do three radio performances per day for the three primary time zones in the United States and were paid for each performance.
When recordings replaced live performances, talent were not needed for three performances per day, only one. But the radio stations still profited off ad sales on three airings of their performance. Instead of being paid for three live performances, talent were paid for one performance and then paid “residuals” for any re-airing of their performance. Ninety years later, talent are still paid residuals when their performances are re-aired or rented/bought on home video or online. So what’s the problem? Why are they striking?
The issue with streaming platforms
The industry has always used Nielsens and other data-collecting mechanisms to determine when a TV episode or movie is re-aired, rented/bought on DVD, etc. They use that data to determine how much residuals are owed to the talent. Streamers like Netflix, Disney+, and MAX do not report viewership to Nielsens or anyone, so it’s impossible to determine how much residuals should be paid.
The content is not “re-aired” or “rented” as before because it is part of a subscription service, which means the TV shows and movies are always online, and anyone can stream whenever they want for however long they want. SAG-AFTRA, WGA, and DGA, the unions who collect residuals on behalf of their talent, can’t calculate residuals the same way it has always been calculated (on a per airing or per rental basis), so these unions are demanding more transparency on viewership of the content and residuals based on actual viewership.
Seems fair enough, right? Well, the streamers are not willing to pay residuals based on actual viewership and are calling the demand for residuals “unrealistic”. Um… what industry did these CEOs think they’re a part of? Residuals have been an integral part of the film industry for 90 years! They SHOULD HAVE EXPECTED to pay residuals from the very beginning of these streaming platforms! To act like the talent are being unreasonable for demanding residuals is complete and utter nonsense. The streamers are the ones being unreasonable. They are making BILLIONS of dollars on the content created by the writers, directors, and actors. The talent should be sharing in that profit, as they always have. So no, the talent are not being unreasonable or unrealistic. These mega-media companies are just being greedy.
99% Working Talent
“But why should we care if rich actors, directors, or writers don’t get paid residuals?” So the reality is most talent are not rich or even famous. Not by far. Just like in any industry, you have the top 1% who are making millions (we’ll call them the “A-Listers”), and then you have 99% who are working to pay rent and living expenses just like 99% of the rest of the country (we’ll call them “Working Talent”).
The Working Talent doesn’t get paid millions of dollars. Most struggle to make $70K/year while living in Los Angeles. It could be weeks or months between jobs. Residuals are what help the talent get by during those gaps in employment. Without residuals, they’d likely have to give up acting or writing. For them, residuals are their lifeline to sustaining the careers that they love. A-Listers will be hit in the wallet by the strike as well. Some may lose millions on productions being shut down. Know what? They’re still happily walking the picket line right alongside the Working Talent because they understand that when you have working writers, actors, and directors making $60k/year and CEOs making $100 million+/year, there’s something wrong with the industry.
What this means to non-industry people
So. How does this affect YOU, the non-industry person who maybe thinks Hollywood is a pipe dream anyway, so why should you care? Well… your favorite TV shows are no longer being filmed. It could be a year or longer before they return. Remember that movie that was announced that you got excited about? It probably won’t get made, at least not anytime soon.
Whether you want to admit it or not, you will be affected by the strike. You might as well cancel your streaming services because, in a few months, there won’t be any new content. No, the unions are not calling for people to cancel their subscriptions, but why would you want to keep them if they’re not releasing anything new? Canceling subscriptions will hit them in their wallets and cause Wall Street to force the CEOs back to the negotiating table. When the strike is over, you can resubscribe if you want. Or maybe you’ll realize you don’t need all those subscriptions anyway.
Use this strike as an opportunity to reconnect with your loved ones and stop binging TV. Play board games, read a book, or pull out that old DVD collection and re-watch those films and tv shows (don’t worry, residuals were already paid on them). Be part of helping Working Talent fight for their livelihoods. If you choose to keep your subscription, that is okay, too. But let the streamers know you support the writers and actors who are currently on strike by tagging them on social media. The more they hear from YOU, the consumer, the sooner they’ll realize they need to pay the talent who creates all the tv and movies you love and stop hoarding the profits for themselves.
Imagine working corporate in a sales role with the promise of commission, only to be told that commission is longer available.
About the author
Jennifer A Goodman is an actress, screenwriter, and producer from in Chicago, Illinois. You can follow her on her IMDB entry.