Uncovering the Concept of ‘Residuals’ and Unraveling the Reasons behind Actors and Writers Opting for Strikes

**Hollywood Strikes: The Impact of Streaming on Residual Payments**

**What Are Residuals and How Do They Work?**

Residuals are long-term payments negotiated by unions for actors and writers who worked on films and television shows. These payments are made for reruns and airings of the shows or movies after their initial release. The pay structure for residuals was developed in 1960, and traditionally, actors and writers received payments for each broadcast or cable airing, DVD sales, or VHS tape purchases. The payments are based on several factors such as the length of the production, the role’s size, the production’s budget, and where the film or show is available.

**Diminished Returns: The Impact of Streaming**

While streaming companies do pay residuals, both unions and their members argue that the amounts and payment timelines have significantly decreased compared to what actors and writers once received. For instance, actors who were previously paid for reruns of network shows often receive nothing for their work on streaming platforms. The shift to streaming has led to a decline in residual payments for many actors. Actor Whitney Morgan Cox shared her experience of receiving residuals for an episode of “Criminal Minds” until the show moved to Netflix. Cox’s payments stopped until the show resurfaced on cable TV.

**The Value of Residual Payments**

The amount of money actors and writers receive as residuals can vary widely. While popular shows like “Friends” continue to earn their cast millions annually, some actors earn mere cents from residuals. Actress Kimiko Glenn, known for her role in Netflix’s “Orange Is The New Black,” shared on TikTok that her total earnings for foreign residuals from the show over a decade amounted to only $27. Many actors agree that the modest residuals they receive are often not worth the paper they’re printed on. Actor Zoe Lister-Jones questions the need to cash such small checks, while actor and writer Paul Scheer describes receiving pennies as commonplace in the industry. To address this issue, a bar in Studio City offers free drinks to actors and writers who show they received checks for less than a dollar. However, these modest payments can be crucial for lower-tier performers, as they often rely on residuals to cover daily expenses.

**Streaming Residuals: Untethered from Popularity**

One challenge with streaming residuals is that they are not tied to the popularity of the content. Streaming services seldom disclose specific viewership figures, leaving performers unsure of how their work is being received. This shift means that being part of a hit show or movie no longer guarantees significant residual payments. Actor Chris Browning, who appeared in the Netflix film “Bright” alongside Will Smith, highlighted the disparity between older payment models and streaming residuals. Browning would have received a $25,000 residual check under the old DVD residuals system but only received $271 from Netflix. Actor David Denman, known for his role in “The Office,” emphasized that the number of times people watch a show no longer affects residual payments. Denman believes that blue-collar actors like himself should have the opportunity to share in the profits when a show is successful. Similarly, actress Quinta Brunson appreciates the way traditional network television works and feels that streamers could learn from networks’ past practices.

**Negotiating Residuals in the Streaming Era**

While little information has been publicly disclosed about writers’ contract negotiations, the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) shared an outline of their negotiations. The union proposed a comprehensive plan for actors to participate in streaming revenue, highlighting the erosion of residuals income under the current business model. However, the studios rejected these proposals outright, according to SAG-AFTRA. The Alliance of Motion Picture and Television Producers (AMPTP), which represents the employers, accused SAG-AFTRA of mischaracterizing and distorting the negotiations. The AMPTP offered limited details on their take on negotiations but mentioned a 76% increase in residuals on overseas streaming video for high-budget productions. While progress has been made in some areas, there are significant gaps remaining between the two sides.

**In Conclusion**

The shift to streaming platforms has had a significant impact on residual payments for Hollywood actors and writers. While residuals used to provide a steady source of income for performers, the rise of streaming has led to decreased payments and disrupted the traditional payment structure. Actors and writers argue that the amounts and payment timelines for streaming residuals are often insufficient, leading to financial difficulties for many in the industry. Negotiations between unions and studios remain ongoing as both sides seek fair compensation for their work in the streaming era.

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