Actors can continue to receive payments for reruns, known as residuals, for the entire duration a program is rebroadcast or made available, effectively in perpetuity. While the payment amount decreases over time, it never fully disappears.
Understanding Residuals: Payments for Continued Use
Residuals are a form of compensation paid to actors, writers, and directors when their work is rebroadcast or distributed in new media beyond its initial release. This ensures that creators are compensated for the ongoing value generated by their performances or creations. These payments are crucial for many in the entertainment industry, providing a steady income stream long after production has wrapped.
The Diminishing Returns Model
The structure of residual payments is designed to reflect the declining value of repeated viewings over time. Initially, payments for early reruns are higher, reflecting the fresh demand for the content. However, as the number of reruns increases, the royalty amount diminishes.
Here's a general overview of how the payment structure typically evolves:
- Initial Reruns: The highest percentage of an actor's original payment is received for the first few reruns.
- Subsequent Reruns: The payment percentage gradually decreases with each successive rerun.
- Long-Term Payments: This reduction in payment continues until a certain threshold is met. For example, by the thirteenth rerun, the royalty amount typically reduces to 5% of the actor's original payment. Crucially, this 5% payment continues for as long as the content is distributed, never dipping below that minimum amount. This means actors can receive payments for decades, as long as their work remains in circulation.
Residual Payment Structure Example
| Rerun Number | Typical Payment Percentage (of Original) | Notes |
|---|---|---|
| 1st | Highest (e.g., 100%) | Varies significantly by contract and medium. |
| 2nd-12th | Gradually Decreasing | Specific percentages vary by union agreements. |
| 13th and Beyond | 5% (Minimum Floor) | Continues indefinitely as long as content airs. |
Note: The exact percentages and thresholds can vary based on the specific collective bargaining agreements, such as those negotiated by SAG-AFTRA, the medium of exhibition (e.g., broadcast TV, cable, streaming), and the original production budget.
Factors Influencing Residuals
Several factors determine the precise amount of residual payments an actor receives:
- Union Agreements: Major entertainment unions like SAG-AFTRA negotiate complex agreements that dictate residual rates for their members across various platforms.
- Medium of Exhibition: Residuals for a show airing on network television might differ significantly from those for a film released on a streaming platform or a direct-to-video production.
- Role Size and Screen Time: Actors with larger roles or more screen time generally command higher residual payments.
- Original Contract: Individual contracts can also include specific terms regarding residual payments.
- Production Budget: Higher-budget productions often have different residual structures than lower-budget independent projects.
In essence, while the payments become smaller over time, actors can continue to receive residuals for their work for as long as it is broadcast, streamed, or otherwise distributed, providing an ongoing financial link to their past performances.
