If you’re wondering what residuals are, and why they tend to be so hotly contested, you’re not alone. Residuals payments are unique to the film industry and can be complex. We’re going to break everything down about residual pay – what they are, who can receive them, and the factors that determine how much one receives. Understanding residuals won’t just make you more industry-savvy in entertainment, it’ll also help you advocate yourself as a creator.Â
Residuals meaning
First, let’s define residuals
Before we dive into why residuals matter and who receives them, let’s first break down what they actually are.
RESIDUALS DEFINITION
What are residuals?
Residuals are a form of financial compensation paid to a principal actor, writer, director, and other members of production involved in making a movie or television show. Artists receive residuals after the project they worked on is initially exhibited, when the film or TV show is re-used or re-distributed. Residual pay occurs after, and in addition to, the artist’s initial fee for their contribution to the work.
An artist receives residuals through…
Re-runs and/or syndication of their work on a network
A show or movie is licensed on a streaming platform
DVD and other physical media sales.
Digital rentals and in-flight licensing on airlines.
Define residuals
How do residuals work?
Residual payments and rates are agreed upon by producers and studios, then governed by the unions – the Writer’s Guild of American, the Director’s Guild of America, and the Screen Actors Guild. Every time a work is reused, whether a show reruns on TV or someone rents a movie, the artists receive a residual check. However, how much they receive depends on the size of their contribution to the project, the project’s budget, runtime, as well as how much they were initially paid.
Let’s break down how residuals work in more detail:
What are residuals
Thus, the more a movie or TV show is reused, the more an artist gets paid in residuals.
What is a residual check
Who receives a residual check?
Now that we know what residuals are and how they work, who’s eligible to receive them?
IN FRONT OF THE CAMERA
Principal actors are eligible for residuals, meaning that if they had a speaking part, they’re qualified to receive compensation beyond their initial fee for their performance. Furthermore, stunt performers, voice over actors, along with musicians (usually in the form of a live studio band on a talk show) also receive residuals. Background actors do not receive residuals.
SAG-AFTRA, the union representing actors, provides more detail on how residuals work for performers here:
Film residuals for actors
BEHIND THE CAMERA
Actors aren’t the only folks on a set who receive residuals however. Credited writers, directors, unit production managers, plus both first and second assistant directors receive residuals via their respective unions.
Other crew members like costume designers, camera crew, and editors, don’t directly receive residuals. Instead, they are paid into a pension fund that the crew member can access once they’ve retired.
Residual check
Why do residuals matter so much?
Residuals are often hotly contested points when the unions and studios renegotiate industry-wide contracts. That’s because nearly all of the work in Hollywood, whether it be film, TV, or new media, is project-based. The artists who receive residuals – actors, writers, directors – don’t have the typical 9 to 5 salaried jobs and can go months, if not years between work.
Residuals provide a form of passive income for these artists that can help sustain them through lean periods. Furthermore, it stands to reason that the writer, director, and actors all were an integral part of the project’s success and reason for re-use, and that they have a right to share in the profit their contributions generate.
Up Next
A Complete Guide to Film Unions
Now that we know what residuals are, who receives them, and why they matter so much, you may be curious about the bodies that set the rates and distribute them. Residuals are only one facet of what unions handle for their members.
In our next post, we’ll demystify any confusion about what a union does as well as take you through the different ones that exist in the entertainment industry.
Up Next: A Complete Guide to Film Unions →
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