Paid Twice, or Not

A residual is a simple idea. You are paid to make something. Then, every time it is used again, you are paid again.

A rerun on network television generated a payment. A sale to syndication generated payments. A video cassette, a DVD, a licence to a foreign broadcaster: each reuse produced a sum, calculated by formula, flowing to the writers and performers whose work was being reused.

The reason this matters is not sentimental. Acting is intermittent work with long unpaid gaps, and a residual stream from past work is what makes the gaps survivable. It is the difference between a successful show being a job that ended and a successful show being an income.

Residuals exist because of a fight. In the 1950s the studios began selling their pre-1948 film libraries to television, and the performers in those films received nothing for a reuse nobody had contemplated when they were made. The union struck over it. The principle established was that reuse is compensable, and the formula followed.

Then every new format reopened the argument, and the argument was always the same.

Cable, home video, DVD, digital download. In each case the industry's position was that the new medium was unproven, the economics uncertain, and that burdening it with residuals would strangle it before it grew. In each case a formula was eventually negotiated, usually after a dispute, and in several cases the initial rate was set low on the uncertainty argument and never substantially revised afterwards.

Streaming broke the mechanism rather than merely repricing it.

The problem is structural. A residual is a payment per reuse, and streaming has no discrete reuses. A title sits on a service and is watched continuously by an unknown number of people. What replaced the per-showing payment was a flat licence fee, largely unconnected to how much anything was actually watched.

So success and compensation came apart. A show watched by tens of millions and a show watched by almost nobody could pay their writers and cast much the same, and the people being paid had no way of knowing which show they had been in, because the viewing figures were private.

That is the real grievance behind the 2023 strikes, and it is worth stating precisely because it is not simply a demand for more money. A performance-linked payment requires knowing the performance. If the only party with the data is the party writing the cheques, then any formula tied to success is unauditable by the people it pays, and a promise to pay more for a hit is a promise whose conditions cannot be checked.

Both unions struck in 2023. Both settlements introduced bonuses tied to viewership on the streaming services, alongside provisions on artificial intelligence, which is the next version of the same question: what is a reuse, when the thing being reused is a scan of your face.

The bonus structures are a compromise. They reconnect pay to performance partially, without granting full access to the underlying numbers, and whether they hold will depend on whether the thresholds turn out to be reachable. Which is also what everybody said about the home video rate in 1985.