Residuals For Screenwriters 101

RESIDUALS are monies paid to WGA screenwriters writing for a WGA signatory company under a WGA agreements. They are based on reuse of your work rather than a profit sharing model.

Writers in the US don’t own copyright to their work. They sell it to the studio system for commercial exploitation. In other parts of the world, the author always maintains copyright control of their own work. WGA and non-WGA American writers are compensated for reuse of their work abroad via FOREIGN LEVIES.

Pay and free to air TV residuals are the biggest residual source of income for writers. Residuals from the DVD market are in steady decline and the VOD market hasn’t picked up the slack as much as the industry has hoped.

ROYALTIES relate to profit-sharing of literary works and are therefore distinctly different to residuals and foreign levies. These three financial instruments remunerate writers  and help keep the industry alive with new material, especially for writers in between jobs.

Residuals relate to income raised in the aftermarkets; ie second and subsequent reuse. The issue of residuals arose in 1953 for resusing made for TV material. They were limited to five payments. In 1960,  residuals also included theatrical movies rebroadcast on TV, and in 1971, residuals for home video were negotiated by WGA.

Residuals are available for live action WGA writers. Animation is not covered by WGA agreements despite the WGA’s attempts to negotiate with the studios. Some motion capture movies are covered under WGA residuals agreement.

Residuals are equally distributed between all writers on a project unless otherwise contractually agreed. Writers with a “Story by” credit receive 25% of residuals. The remaining 75% is paid to the writers.

A similar system applies to TV writers, where writers with a “created by” credit receive 25% of residuals and writers receiving the rest.

FIXED RESIDUALS are a flat fee paid for a predetermined number of reuses or reuses over a time frame. These are based on WGA scale minima. Fixed residuals occur most often in TV, and are renegotiated every three years. Feature film screenwriters are entitled to a script publication fee of $5000 in lieu of residuals. Studios can publish a script on a DVD although they rarely exercise this right.

REVENUE BASED RESIDUALS are based on a sliding scale and generally apply to  movies. The actual figures are based on the distributors’ grosses and apply to DVD, itunes and additional aftermarkets. They are calculated at 1.2% of the producers’ gross (20% of actual gross) which comes out to 0.3% or a 5 cents for a $15.00 DVD sale.

In 2001, the WGA negotiated residual payments of 1.2% of internet rentals. However, the residuals from internet sales (electronic sell through) are a paltry 0.6%.

Residuals for online TV streaming follow a different model of IMPUTED VALUE and are based on unlimited streaming over a period of time.

All residuals collected by WGA every quarter and distributed to WGA members. This differs from the DGA (Directors Guild of America) where around half residuals go to health fund and pension plans. Residuals also go to 1ADs, 2ADs and UPMs. The WGA is looking to mimic DGA and shunt some residuals to health and pension plans.

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