Hollywood Actors and Writers Strike Over Diminishing Residuals: An Explainer

by Chloe Baker

Subtitle: The Shift to Streaming Sparks Controversy in the Entertainment Industry

In a display of solidarity, Hollywood actors and screenwriters have embarked on simultaneous strikes to address the pressing issue of residuals, prompting passionate discussions on picket lines. Residuals, once lucrative payments for performers, have dwindled to a mere trickle as the industry increasingly focuses on streaming platforms. This article delves into the mechanics of the system and sheds light on the experiences of those who either receive meager residuals or are left empty-handed.

Understanding Residuals

Residuals refer to long-term payments negotiated by unions for individuals who contribute to films and television shows, compensating them for reruns and subsequent airings after the initial release. This payment structure was established in 1960, during the last joint strike of writers and actors.

Traditionally, actors and writers received payment for each broadcast or cable television airing, DVD sale, Blu-ray disc, or VHS tape purchase. However, as streaming services gained prominence, residuals offered by these platforms have significantly diminished. Despite technical compliance with residual payments, both unions and their members argue that the amounts and timelines fall far short of what was once received. Formerly compensated actors for reruns on network television are now often left with nothing when their shows are streamed.

The Value of Residuals

Residual payments in Hollywood can range from substantial sums to mere pennies. Even more than a decade after the show concluded, the cast of “Friends” continues to earn millions annually from residuals.

However, many actors and writers find themselves sharing social media posts showcasing paltry residual checks. Kimiko Glenn, known for her role in Netflix’s “Orange Is the New Black,” shared a TikTok video revealing a total of $27 earned from foreign residuals over the ten years since the show began.

Zoe Lister-Jones remarks, “But why even cash it?” Actors and writers consider these checks to be virtually worthless. Paul Scheer, an actor and writer, adds, “It’s not worth the paper it’s printed on.”

The common occurrence of receiving mere pennies has even led to a Studio City bar offering free drinks to actors and writers who present checks for less than a dollar.

Nonetheless, even modest residual payments can be crucial to sustain the livelihood of performers in lower-tier roles. Actor Whitney Morgan Cox emphasizes the significance of residuals for actors’ day-to-day lives, helping with groceries and other essential expenses.

The Popularity Predicament

Residuals from streaming platforms are often detached from the popularity of the associated movies or shows. Streaming services typically refrain from disclosing specific viewership figures. Consequently, being part of a hit production holds little significance for performers.

Chris Browning, who appeared alongside Will Smith in the Netflix film “Bright,” illustrates the disconnect. In the past, Browning would have received a residual check of $25,000 in the DVD era, but from Netflix, he only received $271.

David Denman, known for his role in “The Office,” laments that watching a show numerous times will not translate to increased residual payments. He highlights the lack of profit-sharing for blue-collar actors when their shows become successful on streaming platforms.

Quinta Brunson, the creator and star of ABC’s “Abbott Elementary,” compares her experience with traditional network TV to that of her peers working on streamers. She believes that streamers should learn from the practices of network television, suggesting potential benefits.

The Negotiation Process

While details about the writers’ contract negotiations remain mostly undisclosed, the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) recently shared an overview of the negotiations that ceased on July 12.

SAG-AFTRA requested studios to consider a comprehensive plan for actors to participate in streaming revenue due to the erosion of residuals income caused by the current business model. The studios responded with a simple “no.”

The Alliance of Motion Picture and Television Producers (AMPTP), representing the employers, countered SAG-AFTRA’s claims, accusing them of mischaracterization and deliberate distortion.

SAG-AFTRA stated that the AMPTP outright rejected their residual proposals for lower budget productions. These proposals included requiring residual payments for ongoing streaming of movies, regardless of budget or length, and paying the same rate for shows that first streamed and then aired on TV as those that premiered on TV. They also proposed an increase in residuals when a traditional media production subsequently airs on a free streaming platform like Amazon Freevee.

For higher budget productions, SAG-AFTRA sought improved residuals for the continued availability of movies and shows on subscription streaming services. While some progress was made, significant differences remained between the two sides.

The AMPTP provided fewer specifics but mentioned a 76% increase in residuals on overseas streaming video for high budget productions.

Contributions to this article were made by writers Krysta Fauria and Leslie Ambriz from Big Big News.

Frequently Asked Questions (FAQs) about residuals

What are residuals?

Residuals are long-term payments negotiated by unions for individuals who have worked on films and television shows. They are compensation for reruns and subsequent airings after the initial release.

Why are Hollywood actors and writers striking over residuals?

Hollywood actors and writers are striking over residuals because the payments have significantly diminished in the streaming era. The shift to streaming platforms has resulted in lower compensation, leaving performers with meager residuals or no payment at all.

How much are residuals worth?

The value of residuals varies widely in Hollywood. While some actors can still earn substantial sums even years after a show ends, others receive minimal amounts, sometimes just a few cents. The diminished payments have become a cause for concern among performers.

How do streaming residuals differ from traditional residuals?

Streaming residuals are often detached from the popularity of the associated movies or shows. Unlike traditional residuals tied to broadcast or cable television airings or physical media sales, streaming residuals are affected by different factors. This disconnect has raised questions about fair compensation for performers.

What were the main issues in the negotiations between actors and studios?

Specific details about the negotiations between actors and studios are not fully disclosed. However, one major issue was the request for a comprehensive plan for actors to participate in streaming revenue, aiming to address the decline in residuals income. The studios rejected this proposal, leading to the strike.

How do residuals impact actors’ livelihoods?

Residuals can be essential for lower-tier performers, as they provide additional income for day-to-day expenses like groceries. For some actors, residuals contribute significantly to their livelihoods, especially since the lack of a steady income can result in the loss of union health insurance eligibility.

Are there any differences in residuals for network TV versus streaming platforms?

Yes, there are differences. Actors and writers have noted that residuals for network TV shows were often more lucrative in the past. However, with the rise of streaming platforms, residuals have diminished, and the financial benefits of being part of a hit show are no longer as substantial as they once were.

What is the aim of the actors and writers striking over residuals?

The actors and writers striking over residuals aim to secure fair compensation in the streaming era. They seek improved residual payments for streaming, profit-sharing when shows are successful, and a more equitable distribution of revenue from streaming platforms.

How has the industry responded to the strikes?

The Alliance of Motion Picture and Television Producers (AMPTP), representing the employers, has disputed the claims made by the unions and accused them of mischaracterizing the negotiations. While progress has been made on some issues, significant gaps remain between the two sides in the negotiations.

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ScreenQueen22 July 20, 2023 - 10:46 am

omg, I didn’t know residuals could be just a few cents. That’s like nothing! actors should get paid more, they bring in the viewers!

Cinephile84 July 20, 2023 - 6:08 pm

It’s crazy how the popularity of a show doesn’t matter for residuals on streaming platforms. It’s like the actors are getting ripped off! They should definitely get a share of the success.

MovieLover123 July 20, 2023 - 8:43 pm

residuals are so important for acters and writers! its not fair they get less money now with streamin. they deserve more for their hard work!

TVJunkie99 July 21, 2023 - 5:18 am

I agree with Quinta Brunson, network TV has some benefits that streamers should learn from. The system needs to change to protect the rights and livelihoods of actors and writers. #FairCompensation

TheRealDealWriter July 21, 2023 - 6:30 am

This strike is a big deal! Residuals are a lifeline for many actors. They need fair compensation, especially in the era of streaming. Solidarity with the writers and actors!


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