Residual (entertainment industry)

Residuals are financial compensations that are paid to the actors, film or television directors, and others involved in making TV shows and movies in cases of the cable reruns, syndication, DVD release, or licensing to streaming media.

After audio "transcription disc" technology became widely available in the late 1930s, it was initially used to make recordings to send to radio stations that were not connected to the live network.

As sound quality improved, radio networks began using them for time-delaying west coast broadcasts, eventually eliminating the need for multiple performances.

In 1952, residual payments were extended to these television reruns, thanks in large part to Ronald Reagan, whose first term as president of the Screen Actors Guild (SAG) ran from 1947 to 1952.

Starting with Universal Pictures, studios ended up agreeing to film residuals, but only for movies made after 1960.

[5] In 1988, WGA launched its longest strike, lasting 22 weeks, over a disagreement over residuals for TV shows broadcast in foreign countries.

On the other hand, domestic residuals were adjusted to take a sliding scale, which would incentivize producers to syndicate one-hour shows, whose revenue performance was poor, to independent TV stations.

[6] In 2007, the Alliance of Motion Picture and Television Producers (AMPTP), the industry bargaining group that deals with the trade unions, called for an end to the current residual payment system in response to the rise of online media.

The AMPTP adamantly opposed extending residuals to online movie and TV show sales for at least three years, citing the need to "adapt to the realities of the marketplace, the new demands from our audiences and new technologies",[3] while a WGA representative countered that they "already had effective business models".

[10] Residual calculation is complex and depends on several variables, including guild membership, initial payment, time spent, type of production (e.g., network TV, DVD, ad-supported streaming, online purchases), and whether it involves a domestic or foreign market.