SYLLABICATION: re•sid•u•al (Pronunciation)
NOUN: A deferred payment made to a writer, performer or director for each repeat showing of a recorded television show, film or commercial. Money that was contractually promised as a portion of the payment when the initial deal was struck, based on the potential re-use of their creation. Part of the agreed-upon payment for the artist's work. Often used in the plural. 2. The quantity left over at the end of a process; a remainder. (For definitions of some other useful industry terminology, see our Glossary.)
Why are the writers striking?
TV and film writers are represented by the Writers Guild of America (WGA), who negotiates their main labor agreement - the Minimum Basic Agreement (MBA) - with their employers, the producers, represented by the Alliance of Motion Picture and Television Producers (AMPTP). Their current contract went into effect on November 1, 2004 and expired on October 31, 2007. Negotiations for a new contract began over three months ago, but the two parties could not agree, and WGA members went on strike Monday, November 5th, 2007.
The WGA said in a statement that "After three-and-a-half months of bargaining, the AMPTP still has not responded to a single one of our important proposals. Every issue that matters to writers, including Internet reuse, original writing for new media, DVDs and jurisdiction, has been ignored. This is completely unacceptable."
Who, exactly, is striking?
Approximately 12,000 members of the WGA, who write primarily for TV and film. The Writers Guild of America is split into two guilds, West and East, which were jointly negotiating the new writers' contract and went out on strike together. (The guilds split the country at the Mississippi River.) WGA, East represents a smaller number of writers than its Western counterpart (about 4,000, with 2,500 who worked under the expired contract,) but about thirty TV shows will be affected in New York.
Writers for commercials, sports programs and reality TV are not covered under the guild contract. Writers for animation are in a grey area, with some TV writers being covered by the Writers Guild, while most animated feature writers are covered under Animation Guild Local 839, part of the International Alliance of Theatrical Stage Employees (IATSE). Some writers for these animated shows belong to both unions.
Who are the WGA striking against?
A large group of studios - the struck companies - as represented by the Alliance of Motion Picture and Television Producers (AMPTP).
What are the writers asking for?
Fair compensation - a minimum wage - for their creations in old and new media.
An increase in the percentage they receive from DVD sales of their TV show or feature film. They currently receive .3%-.36% of receipts; they are asking for .6%-.72%. The current DVD rate formula dates from 1985, when "home video" sales were not proven, and was, in fact, an 80% reduction of the 2.5% percentage they were asking for. Management said they would re-visit the home video percentage at a "later date," when the technology was less "risky" - but that long overdue date has not arrived, though video technology has changed to DVD, and DVD sales have taken off, providing a major studio income stream. The writers are being paid less for their work per DVD - about $.04 - than it costs to produce the plastic packaging that the DVD comes in. They are asking for about $.08 per DVD.
An increase in the percentage they receive from the digital re-use of their TV show or feature film - a rapidly expanding new market. They are asking for 2.5% of receipts for re-use on new media, including the Internet, cellular technology, and other new delivery systems. They have been offered only the .3% home video residual for digital re-use, though the WGA maintains that even under the expired contract, for either streamed or downloaded content, they are already entitled to 1.2% for feature films and TV shows when the viewer pays, and 2.0% for post-1984 TV product or 2.5% for pre-1984 TV product when it is free to the viewer.
The companies are refusing to pay anything for streaming content that is free to the viewer - though it is ad-supported - and they have been offering to pay the .3% home video residual when the viewer pays, as in an ITunes or Amazon download. This dispute is the subject of outstanding claims filed by the WGA, DGA, and SAG against the companies.
The companies claim that it's "too soon to tell" if they can make money from this business model, and they maintain that streaming content - even entire films, episodes or seasons - is solely for promotional purposes, and therefore should not be subject to most Guild pay scales and protections.
(Watch writers for The Office riff about full episodes of their show being shown for "promotional use".)
A minimum rate and residuals for material created expressly for the Internet and other new media, such as webisodes, mobisodes, video games, recaps and other short-form material that is filmed. They currently do not have a minimum payment protection for this material, and also receive no residuals, credits, or separated rights. (They do receive pension and health coverage for their writing in this area.) They are asking for 2.5% of receipts for re-use on all new media.
(Further reading: The Short Version, from United Hollywood.)
Why should writers receive residuals?
I don't get residuals for the work I do.
Writers are frequently unemployed - about 50% of the WGA is unemployed at any given time. This is simply the nature of 1) creative work and 2) the market for screen and teleplay writing. Residuals are what sustain writers while they are writing, pitching a film, looking for work, or during seasonal lulls. These fees keep writers in business.
Residuals encourage writers' enthusiastic participation and encourages ownership in the result. Knowing that increased payments result from the popularity and quality of their creations adds incentive to the writers' cooperation in bringing writing and production to a successful conclusion.
A portion of writers' residuals, is paid into the health benefits and pension funds of some other craft and labor unions involved in entertainment production. This spreads some of the benefits of residuals around to other folks involved in the creation of popular entertainment.
They receive it for their authorship. They are "work for hire," and do not retain ownership of their creation - but have created something that is frequently sold and re-sold and re-sold again. It is similar to the royalties a writer receives each time their book is purchased. This is a fair way they can benefit if their product becomes immensely popular.
It is not a "bonus" or "extra money" or a "raise"- it is a deferred payment that they receive only if their creation has continuing marketability. They don't receive residuals if their product is not re-used, so the producers do not "lose" money to residuals if it isn't popular or marketable.
Is the AMPTP negotiating in good faith?
Members of the AMPTP continue to tell their stockholders about the millions to be made from new media, while telling the WGA that the Internet is new, unproven, and risky, and that streaming of TV shows is "promotional". Jeff Zucker, President and CEO of NBC had this to say in explanation of why NBC pulled their shows off iTunes and helped launch Hulu.com:
"Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money," Zucker said. "They did not want to share in what they were making off the hardware or allow us to adjust pricing."
"Zucker argued that the 50 million streams of TV shows that had been accessed on NBC.com during the month of October prove there is a demand for traditional TV series on the Web. 'It's extraordinary,' he said of NBC.com. 'It's like a small cable channel in our universe that is becoming very successful.
(Variety, Tuesday 10/30/07)
If the companies think streaming shows and movies on the Internet is strictly promotional, then why are they so adamant about the removal of their content from youtube and other popular video sites? If it's just an ad, then isn't youtube showing their "ads" in a fantastic & popular venue?
The AMPTP protests the raising of residual rates for this new media, but raising the percentage of receipts is only more money if there is more money coming in - there is no additional fiscal risk to the AMPTP. If the new media business model doesn't work out, the writers simply won't get more money. The writers - as is always the case with residuals - share in the risk of a project's being marketable. It ensures that they will do their best to see that their creations are quality and popular.
The last time the AMPTP wanted writers to hold off from receiving their 2.5% re-run residual percentages on an experimental technology, they were talking about home video - now DVD - rental and purchase. The AMPTP said the reduced percentage would be re-considered once the technology was less "risky"." That was over twenty years ago, and that day never came. Now the AMPTP is saying the same thing about content on the Internet, and there is no reason to believe that they will agree to increase the residual unless they are under very strong pressure to do so.
Are all of the WGA writers rich, like the AMPTP says?
About 50% of members do not earn any money from writing in a given year. Of those writers who do make some money, one quarter earn less than $37,700 a year. According to the U.S. Bureau of Labor Statistics, the median annual salary of working scriptwriters is $44,350 -- a more important and revealing figure than the media's frequent statement that the average Hollywood writer makes $200,000. (The median yearly income of all WGA writers, including those unemployed, is closer to $5,000 a year.) The Guild itself provides writers' earning figures, and the L.A. Times ran a sidebar that shows their income in context with production costs and other earners.
Most writers are middle-class, working to make their rent or mortgage, concerned about rising healthcare costs, and trying to save for their older, and likely less productive years.
Listen to these typical writers - Jessica Bendinger:
and Dawn DeKeyser:
Why is this negotiation so important now?
Internet viewing is rapidly expanding, and will likely soon replace DVDs and TV "live viewing." If writers aren't able to negotiate a higher percentage for internet re-use now, they will shortly find themselves locked out from any reasonable residual payments for the movies and shows they create. The residual system will be gutted.
What about the TV/movie crews and staff losing their jobs?
As former and future co-workers of production staff, most writers take this aspect of the strike very seriously - they frequently express that one of their biggest concerns is about the employees and friends who are or will be losing their jobs as production shuts down - while those employees have tended to voice their support for the striking writers.
Most of the trade unions involved in the entertainment industry are also supportive of the strike and have been getting out the word to their members about their varyious legal rights concerning the picket lines (AFM, AFTRA, DGA, IATSE, Teamsters Local 399) and ramping up their support and charitable efforts on behalf of members affected by the strike. (IATSE's Broadway stagehands Local One are now out on strike themselves, against the League of American Theatres and Producers.)
Many see this fight as profoundly connected to their own future as union members, both directly and indirectly. As one Teamster (a location scout) explained it, "While I don't receive individual residual payments for my work as a teamster, my pension and health fund does. As the distribution stream goes digital those residual payments will slow to a trickle, and the fund will suffer. When the time comes I plan on being old, sick, and in need of Health Care. And the WB doesn't want me to have it."
What else does the WGA want?
They want to enforce and expand Guild coverage.
Enforcement of Coverage. For game shows, documentaries and talk shows, writing is supposed to be covered under WGA contract. The companies have on occasion failed to honor the contract, and to provide members with health coverage and pension -- and they have been known to fire anyone who asks for these benefits. They need to honor the contract.
Expansion of Coverage. The WGA wants to protect writers in reality shows and animation who are working without coverage (which means without health and pension and other labor protections.) Those writers should be covered.
Who else supports the writers' strike?
Actors - members of the Screen Actors Guild - have picketed with and supported the writers, and many have refused to cross picket lines to work. (Go to our gallery or search Flickr to see.) Both SAG and the DGA will be facing similar labor issues in June of 2008, when their own contracts expire.
Showrunners - executive producers of TV shows, many of whom are also writers - have been extremely supportive of the writers' strike, many refusing to cross picket lines, risking their jobs and hefty lawsuits in order to show solidarity with the striking writers.
Joss Whedon, WGA & DGA member, had this to say - speaking for many of us who support organized labor - in a recent post on the WHEDONesque fansite.
"Because this IS a union issue, one that will affect not just artists but every member of a community that could find itself at the mercy of a machine that absolutely and unhesitatingly would dismantle every union, remove every benefit, turn every worker into a cowed wage-slave in the singular pursuit of profit. (There is a machine. Its program is 'profit'. This is not a myth.) This is about a fair wage for our work. No different than any other union.
(For more background on the strike, see our Links page.)
Fans4Writers is unaffiliated with the WGA, except in spirit.
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