Residuals for Film and TV
Residuals payment obligations can be a big question mark on any production. The made-for market (theatrical, basic cable, SVOD, etc.) and sell-to market variables of each union carry vast implications for your overall residuals tab. When you go to license your film or show, you need to know how much you’ll owe in residuals over the years – otherwise, how do you know you’re getting a good fee for the license?
How much will I owe in residuals for my film or show?
It’s important to know that film and TV residuals payment obligations remain with the producer of the title. Even if you strike a deal with a licensee to make the residuals payments for you, if the other party defaults, the liability for residuals to actors, writers and directors remains with you. So it’s better to make a deal that takes into account the amount you will owe in residuals payments throughout the length of the agreement. But how do you know how much that is?
Residuals payment formulas vary by made-for market and sell-to market
For SAG-AFTRA residuals, as well as DGA and WGA, the formulas for calculating your payments vary: some markets require residuals payments based on how many runs the product has (how many times it airs), while other markets’ residuals payments are based on revenue (how much you get paid for the license). The advent of new media has created a whole new set of residuals payment formulas that must be forecast in order to know how much you will end up owing. Production companies that underestimate residuals payments can even end up owing more than they make on a licensing deal! Media Services’ advanced residuals payment forecasting system can generate an estimated schedule of payments before you sign a deal, so you know in advance how residuals are going to affect the bottom line of your film or TV show. Learn more about Media Services’ Residuals Payment Processing.