I got asked by a couple of people about residuals and how they work.
And given that it's a central point of contention for the current strikes, I figure I might as well give a rundown here.
We've all seen the life cycle of a movie release, even if we didn't know that's what we were looking at it.
A movie would come out in theaters, then in dollar theaters, then on video, then pay-per-view, then premium cable channels like HBO and Showtime, then basic cable, then regular TV.
Each one of these stages is called an exhibition. When movies first started having narratives, producers realized the big advantage they had over live performances. Mainly, that the same performance could be played again and again in different times and places.
Each of these new exhibitions pay a licensing fee to the producers of the movie. A cut of ticket sales, a cut of video sales, a cut of the ad revenue during a TV broadcast, whatever.
That FBI warning at the beginning of videos we all laugh at? It's very real. And it points out a very real distinction. You may own the physical object that happens to play a given movie. But buying that object only gave you the right to show it privately in your home.
Of course, the actors and writers noticed that producers were making this money off of their work. And they naturally wanted their cut.
In 1960, the last year the writers and actors both went on strike, both unions wanted increased residuals for broadcasting movies on TV. The AMPTP, seeing moviegoing drop sharply with the increasing popularity of TV, claimed they were bleeding money and couldn't afford it. (Remember this, it'll come up later)
SAG president Ronald Regan (seriously) ended up negotiating a deal that meant movie actors got residuals when their movies (made after 1960) were rerun on TV. Slowly, both actors and writers wound up getting residuals at various stages of exhibition.
Quarterly, producers report what their licenses have sold for to the unions, who distribute the proceeds to the actors and writers.
How much varies widely. A popular show that gets rerun a lot can make some decent money. A flop that nobody watched can make very little. A few years back, I got a residual check from a box office bomb I worked on. It was for the princely sum of six cents.
Now there's streaming.
In 2007, Netflix began streaming. At the same time, Viacom launched a deal to stream episodes of South Park online. At that year's WGA negotiations, the writers wanted video residuals (which hadn't been recalculated since 1985) to go up, while the AMPTP demanded a recalculation to account for the rise of cord cutting.
Remember, streaming was barely a thing. Netflix was the new hotness, but nobody was really sure it was going to be a big thing.
The result, after the writer's strike (which never did get their video residuals recalculated), the "new media" agreements were launched. These covered everything from Netflix to youtube. Since the commercial viability of streaming hadn't been established yet, it gave streaming producers much more favorable residual terms than other exhibitions. On top of that, actual numbers of streaming as far as what's more popular with what audiences, is data that streamers keep very private, as opposed to their subscriber numbers.
Remember the South Park episode where Canada went on strike, demanding more internet money that didn't really exist? That was Parker and Stone ruthlessly mocking the WGA for demanding more money that nobody knew existed at the time.
Now here we are. The unions are demanding streamers show transparency with their numbers and pay out residuals in line with other exhibitors. The AMPTP, claiming a rise in cord cutting and stagnant streaming numbers, say the demands are unreasonable.
Sound familiar?
Take care of yourselves out there.
And given that it's a central point of contention for the current strikes, I figure I might as well give a rundown here.
We've all seen the life cycle of a movie release, even if we didn't know that's what we were looking at it.
A movie would come out in theaters, then in dollar theaters, then on video, then pay-per-view, then premium cable channels like HBO and Showtime, then basic cable, then regular TV.
Each one of these stages is called an exhibition. When movies first started having narratives, producers realized the big advantage they had over live performances. Mainly, that the same performance could be played again and again in different times and places.
Each of these new exhibitions pay a licensing fee to the producers of the movie. A cut of ticket sales, a cut of video sales, a cut of the ad revenue during a TV broadcast, whatever.
That FBI warning at the beginning of videos we all laugh at? It's very real. And it points out a very real distinction. You may own the physical object that happens to play a given movie. But buying that object only gave you the right to show it privately in your home.
Of course, the actors and writers noticed that producers were making this money off of their work. And they naturally wanted their cut.
In 1960, the last year the writers and actors both went on strike, both unions wanted increased residuals for broadcasting movies on TV. The AMPTP, seeing moviegoing drop sharply with the increasing popularity of TV, claimed they were bleeding money and couldn't afford it. (Remember this, it'll come up later)
SAG president Ronald Regan (seriously) ended up negotiating a deal that meant movie actors got residuals when their movies (made after 1960) were rerun on TV. Slowly, both actors and writers wound up getting residuals at various stages of exhibition.
Quarterly, producers report what their licenses have sold for to the unions, who distribute the proceeds to the actors and writers.
How much varies widely. A popular show that gets rerun a lot can make some decent money. A flop that nobody watched can make very little. A few years back, I got a residual check from a box office bomb I worked on. It was for the princely sum of six cents.
Now there's streaming.
In 2007, Netflix began streaming. At the same time, Viacom launched a deal to stream episodes of South Park online. At that year's WGA negotiations, the writers wanted video residuals (which hadn't been recalculated since 1985) to go up, while the AMPTP demanded a recalculation to account for the rise of cord cutting.
Remember, streaming was barely a thing. Netflix was the new hotness, but nobody was really sure it was going to be a big thing.
The result, after the writer's strike (which never did get their video residuals recalculated), the "new media" agreements were launched. These covered everything from Netflix to youtube. Since the commercial viability of streaming hadn't been established yet, it gave streaming producers much more favorable residual terms than other exhibitions. On top of that, actual numbers of streaming as far as what's more popular with what audiences, is data that streamers keep very private, as opposed to their subscriber numbers.
Remember the South Park episode where Canada went on strike, demanding more internet money that didn't really exist? That was Parker and Stone ruthlessly mocking the WGA for demanding more money that nobody knew existed at the time.
Now here we are. The unions are demanding streamers show transparency with their numbers and pay out residuals in line with other exhibitors. The AMPTP, claiming a rise in cord cutting and stagnant streaming numbers, say the demands are unreasonable.
Sound familiar?
Take care of yourselves out there.
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