What Were Residuals, Daddy?
I don't expect a lot of popular support for the Writers Guild strike. (I don't expect most people to care one way or the other. Most people have problems of their own, and things to do, and Call of Duty 4: Modern Warfare isn't going to play itself. (Or is it?))
Luckily, this isn't about popular support. It's collective bargaining, not a straw poll.
If we writers do want more support, though, we should probably do a better job of explaining what a residual is. (If only to demonstrate our skills as professional communicators.)
A residual is a deferred payment against the lifetime value of a script.
It's not a bonus.
That's why it's called a "residual." The word means "left over." It's the left over part of the compensation the author agrees to wait for. It's not money for nothing. The word for that is "commission."
A residual isn't a handout or an allowance or Paris Hilton's trust fund. It's not a lottery payout, or alimony, or an annuity from a slip and fall accident at a casino.
A residual is a deferred payment against the lifetime value of a script.
It's not a perk.
It's okay if you didn't know that. It's in the best interests of a lot of fairly large corporations that you don't. And it makes it easier to imagine that writers are asking for something workers don't deserve.
Here's an actual "comment" I got last week, from an actual "commenter" just like you:
"When an engineer develops a product for a company should the engineer receive compensation each time the company figures out a new market for the product or a new application for the product (?)"
This is a fair question, but it employs a truly dunderheaded example. An engineer does receive additional compensation when a company finds a new application for the product he created. This is called "owning a patent."
(I don't think even Rupert Murdoch wants to get rid of patents. Well, not yet.)
"When the product loses money for the company should the engineer give back his salary?"
Of course not. Because his product always retains its potential to create revenue. The capital gets used up. The idea isn't unthought. But now I'm nitpicking at an analogy that doesn't apply in the first place.
"When a writer is paid for work on a show for the network that not only doesn't make money for the network on the Internet but doesn't make money for the network period, should the writer give back his pay to the network (?)"
I appreciate that this is a rhetorical question. But it's ineffective, rhetorically, because the answer is no.
The writer did her part. She wrote the episode. And in doing that, she created a product with a potential value, which is infinite. (Or, in the case of Seinfeld even more than that.) Because the episode can be shown an infinite number of times. (Or in the case of Seinfeld, even more than that.)
Yes, and you're already saying, "But Seinfeld isn't your typical, run-of-the-mill sitcom. That's Two and Half Men." And I'm saying -- rudely, over you -- that I know it's not typical -- but I'm trying to explain that, technically, the potential value of a sit om -- any sitcom -- is infinite. I'm just using Seinfeld, because that's the example the New York Times would use.
(The potential number of New York Times references to Seinfeld: Another good illustration of infinity.)
An episode of a television show can produce revenue forever.
Yes, most TV shows aren't Seinfeld. But each of the 180 episodes of Seinfeld -- a show that started without bankable stars or a high concept -- will make about ten million dollars in syndication. In real economic terms, every sitcom could be Seinfeld when the writer commences work.
(Unless it has Nathan Lane in it.)
What should a writer charge, then, for a script that could make $10 million dollars?
A: I dunno. Nine million dollars? Gotta leave something for the actors.
But what's a fair price to charge up front?
A: Right now, we'll take $19,125.
If it's a hit, you can pay us the rest later. I know! We'll call it a residual!
Because writers understand that most shows aren't hits. Most shows lose all the studio's money and go straight down the toilet, like John Ridley's Barbershop.
That's why, for decades and decades, the system has been that the writers take far less than they should be paid for a hit show, because there's no way of knowing if the show will be a hit or not. This is the "residual" difference in its value. If the show doesn't succeed -- for whatever reason (Nathan Lane) -- we don't get the rest of our money.
We take far less than our labor is demonstrably potentially worth on the understanding that most shows fail. Because we like what we do.
But it's the opposite of cheating anyone.
Anyway, I'd be happy to give up my residuals. And not just for syndication and DVDs, but for downloads and streaming video, too. The studios are right; who knows if this crazy Internet thing will last? All I want, in return, is an up front payment of nine million dollars per teleplay.
Short of that, all I want is for people to understand one thing:
A residual is a deferred payment against the lifetime value of a script.
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Disclaimer:
Terrific people I idolize worked on Barbershop.
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Apology:
That crack about "commission" being for nothing. That's just a joke, Ted.
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Not a Correction, But Added Later Nonetheless:
Yes, living on this planet as I do, I understand that engineers can assign their patents to the corporations that employ them. They can also give them to strangers on the street, or mail them to fickle prostitutes like a piece of Van Gogh's ear.
Some engineers assign their patents. Some don't. Some children work in mills. That doesn't make it their place in the divine order of things. Or even their legal obligation. Except at The Gap.
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Read more thoughts about the strike on Huffington Post's writers' strike opinion page
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I've got an idea, since the writers don't want to write unless they get more money, let's head for the sci-fi shelf at the local library.
I got a challenge for Hollywierd: Wanna sell
me another movie ticket? Here's the movie
I wanna see: A World Out Of Time, made after
the book by the same name written by Larry Niven about 2-3 decades ago. You want my 8 bucks, and the $597.50 for your blanking popcorn? That's the movie I wanna see.
Until then, I've got this guitar...
This issue has nothing to do with fairness. It's about power. While anyone can write, it is the marketplace that determines who is a writer more than talent. Talent may be appreciated, but based on what is in the marketplace it is quite easy to argue that it is not free market based on talent, but more like a rigged market based on fear and greed. The WGA writers are on strike because they want to be valued higher in a year where record earnings abound in entertainment and new revenue streams are being formed that will perpetuate this reality.
In fact what writers need to do as they prepare for a prolonged fight for being valued is create value for them selves. The internet is the greatest hope for the talented folks in this group. Creating a new entertainment website in their time off will create competition for eyeballs away from television's rerun complacency. The more they attract the greater the value in the long run and the more they can share in the internet's potential value of their efforts. The more they will also understand the other side of trying to figure out how to make money from the internet. The best and brightest will eventually get tv deals from their popular sites.
In the mean time, let the creative cream rise to the top and the nepotism laden "who you know" system curdle away for the cheese they continue to create.
Solidarity, brother!
Okay, some clarity here. Most engineers sign an NDA at techno companies which means whatever they 'invent' while employed at company belongs to that company. In fact, when they leave it is typical to not work for six months at the same type company. That is called intellectual property and it belongs to the company.
When a songwriter creates a song, he gets residuals. Everytime you hear a co-opted song as background to a commercial, somebody gets a check.
So a TV script or movie script writer is entitled to earn $$$ much as a book author does when he sells his book to a movie studio. The difference is the way the process works.
Someone who writes a movie script makes a deal to get paid up front or get a piece of the action. Isn't that what contracts are for? Isn't that why Hollywood folks have agents?
What the writers guild is asking for is a comparable deal. If you buy my script and it is used beyond the now, then a residual is paid. As in the songwriter, he can make $$$ on record sales, other covers of the song, or if the song is sold to a megacorp as background for a car commercial.
This is about protecting your intellectual property so why shouldn't the creator get a piece of the pie.
Not quite the same as an architect. You engage one, pay his fee and then the house is yours after the contractors build it and get their fee.
Honestly, Chris, we should all be with you. Ideas get movement and make people rich along the way. You are entitled to a residual because the idea lives on.
There are legions of musicians, particularly the doo-wop/R&B guys from the 50's and 60's who were screwed and left with nothing while producers and corporate VPs git fat checks from their efforts.
This is a form of slavery and exploitation and it's not right. We need to be fair here...
Support the workers, support the writers!
You forgot to address the most unanswered question of them all. Should writers base all their grievances on bogus unionization which has always set low salary substandards and a limited pay scale status quo to begin with?
Morever, why is it that actors and directors are able to negotiate deals in the millions of dollars and most writers toil as thousandaires?How in the world do you argue residuals when base compensation is unfair or unjust already?
Anyone who can read thinks they are a writer. And social talent makes it in Hollywood while writing talent is secondary. This is why pay is not what it should be. Nepotism makes it and real talent is often left out in the cold.
Schmoozers who fit into cliques will settle for whatever they can get. Real talents will demand what they are worth. Few great writers are working right now. They are discriminated against because they will not dumb down their content or bow to ageist, cronyism cuthroats.
One of the biggest producers of the 70s and 80s was a rogue who could not read or write. And today everyone is young and tasteless. With sharks like this pulling the strings in Movieland, it's no wonder that writers are treated like bottom feeders and WGA is a joke.
I hire an architect to design a new house. I sell the house for a big profit. The guy who bought it from me sells it for an even bigger profit. Should the architect get residuals?
I pay a contractor to build the house. I live in the house for fifty years, and then my kids live in the house for many generations. Should the builder get residuals?
I buy a painting from a starving street artist for pennies. I put in on display. People consider it a masterpiece and are willing to pay to see the painting. Should the artist get residuals?
A young staff fashion designer works for a big name designer. One of her designs becomes a hit. The big name designer put his name on it. Should the fashion designer get residuals?
Ruth Wakefield invents the tollhouse cookie in 1933. Mrs. Wakefield publishes the recipe in a cookbook in 1936. Restaurants and bakeries make the cookies. Should Ruth Wakefield get residuals?
Thirty years ago in Hollywood, some folks other than George Lucas designed Darth Vader’s costume, which is still a big seller every Halloween. Lucas makes a fortune on the royalties. Should the costume designer get residuals?
The engineering example cited is a perfect example of the difference between residuals in the entertainment business and royalties in the business and technological world. Staff engineers assign their patents to their employers in exchange for receiving a salary, but independent inventors have the option of selling the rights to their patent in exchange for an upfront payment or for a percentage of the sales/profits, or any combination of payment and royalties. It is up to the patent holder to determine if it is more financially lucrative to get the money up front or to take royalties over the life of the invention. Recent history is full of examples of good and bad decisions by inventors and investors. Sometimes the rights to a patent are sold for a few bucks and the product goes on to make the manufacturers and investors millions. Other times, companies pay big bucks for a patent that goes nowhere. The important distinction is that EACH PATENT HOLDER MAKES THAT DECISION FOR HIMSELF, depending on how he accesses the value of his invention, how much demand there is for his patent, and what the investors are willing to pay.
Does the residual arrangement between the writers and producers offer this same flexibility? Can writers opt to take all the money up front? Can they opt for a full percentage with no advance pay? Can they cut their own deals, as inventors and investors have been doing for years? That’s a residual question I’d like explained.
I have a great example of why the WGA and the strike are important, and why we should give them our full support.
Anyone remember John Ball? He was a novelist, not a screenwriter, so he didn't have the WGA to fight for his rights.
John wrote a dozen or so novels, one of which was acquired by United Artists. Not only was the resulting film a financial success, it received critical acclaim (and five Oscars), and it spawned two sequels and a television series which ran for seven seasons. And, of course, the videos and dvds.
Apart from the small purchase price for the book, John never received a dime. No residuals, no profit participation, no nothing. He didn't even receive screen credit on the television series until after he died and the Hollywood Reporter's obit listed him as the writer of the novel. (John passed away when the series was in its first season. Officially, he died of cancer. Personally, I think he died of extreme disappointment.)
A lot of people made a lot of money off of what came out of John's head. Does anyone honestly believe it's fair that he didn't get to share in those profits?
By the way, the little novel he wrote was called "In the Heat of the Night."
Peggy Lee had a very shrewd agent who wrote in her contract that she should get a piece of all future profits from “Lady and the Tramp”, and she still had to sue those bastards at Disney to get her fair share of the immense video profits from the movie.
You can’t trust these people at all.
Keep fighting the good fight, Chris.
Stick to your guns, Chris!
SOLIDARITY FOREVER!
BTW, I'm a member of the National Writers' Union
I love you so much I can't even stand it.
I have a scientist friend who works at a very large company that everyone knows about but I'm not going to name. He's brilliant, he gets patents all the time. But the patents belong to the company he works for. Not to him. He may or may not get a bonus. A one time bonus.
I write advertising copy. The words I write belong to the agency I work for, they do not belong to me. I get paid once for my words, even though they continue to sell product for who knows how long.
If you choose to be a writer and you complain of things like the only way you can take a maternity leave is because of residuals, do you expect the world to feel sorry for you?
This is the business you chose.
There is so little of value on television today that it's hard to feel compassion for this strike.
If the people of this country could form one union, I would like us to strike television until the producers and writers started producing and writing better stuff.
I very rarely watch tv, so this strike will not mean much to me.
I do have to say though, I feel the sorriest for the actors of shows like Gilligan's Island who never saw a dime in residual money and that freaking show seemed to be running everywhere in the world for many, many years!!!
Think of the money made off that show that the actors never saw!
I have a scientist friend who works at a very large company that everyone knows about but I'm not going to name. He's brilliant, he gets patents all the time. But the patents belong to the company he works for. Not to him. He may or may not get a bonus. A one time bonus.
I write advertising copy. The words I write belong to the agency I work for, they do not belong to me. I get paid once for my words, even though they continue to sell product for who knows how long.
If you choose to be a writer and you complain of things like the only way you can take a maternity leave is because of residuals, do you expect the world to feel sorry for you?
This is the business you chose.
There is so little of value on television today that it's hard to feel compassion for this strike.
If the people of this country could form one union, I would like us to strike television until the producers and writers started producing and writing better stuff.
I very rarely watch tv, so this strike will not mean much to me.
I do have to say though, I feel the sorriest for the actors of shows like Gilligan's Island who never saw a dime in residual money and that freaking show seemed to be running everywhere in the world for many, many years!!!
Think of the money made off that show that the actors never saw!
With the writers' strike in mind, I would like to point out the fact that I chose to eschew screenwriting in favor of writing for the stage.
It's not just the issues of authorial autonomy and authorial control -- something that is anathema to the Hollywood suits, it's also that the playwright, as the copyright holder, owns the work and can profit from it via royalties.
Authorial primacy is something that butt-cheese-brained Hollywood suits cannot understand and fear more than anything. I think it's time that Hollywood screenwriters start copyrighting their work before they shop it around and learn to assert their intellectual property rights accordingly.
Why is it I think that if the giant media corporations give in to the writer's union and give them the residuals they want the giant media corporations, their shareholders, and especially the top executives will still make out well in the end?
Go for it, Chris!!!! Get all you can even if it means the media corporate executives must all own one less golden ashtray in their Boca Raton mansions down in south Florida.
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