Why Don’t Actors Get Residuals Anymore?
In the entertainment industry, residuals have long been a key part of an actor’s compensation structure. These payments are made whenever a film, television show, or commercial an actor has worked on is reused, rebroadcast, or repurposed, ensuring that performers are compensated for the continued commercial success of their work beyond the initial airing or release. Residuals have traditionally been a way to guarantee that actors share in the ongoing profits generated by the works they appear in. However, in recent years, there has been a growing concern that residuals are becoming less prevalent or are being reduced, particularly for actors involved in streaming content and modern media platforms.
This article will explore the factors behind why actors may not be receiving residuals as they once did, examine the impact of streaming services like Netflix and Amazon Prime, and provide examples of how the landscape of residual payments has changed. Additionally, we will explore the role of unions, contracts, and industry shifts that contribute to this phenomenon.
What Are Residuals?
Residuals are payments made to actors and other creatives whenever a film, television show, commercial, or other type of content is reused, rebroadcast, or distributed on a different platform. This can include things like reruns on television networks, syndication, streaming, DVD sales, or airing on cable channels. In essence, residuals are a way to ensure that performers continue to be compensated as their work continues to generate revenue over time.
For example, if a television show is picked up by a different network and rerun years after its original broadcast, the actors involved receive residuals based on the number of times it is aired. Similarly, if a movie is released on DVD or is made available for digital streaming, the actors are compensated for these additional uses of their performance. Residuals are a form of profit-sharing between the actor and the production company, ensuring that performers are financially rewarded for the ongoing success of the works they contribute to.
The Decline of Traditional Residuals
In the past, residuals were a standard and essential part of an actor’s compensation, especially for television and film productions. However, as the entertainment industry has evolved, especially with the rise of new media platforms like streaming services, many actors have seen a reduction or elimination of traditional residual payments. The main reasons for this shift include the changing distribution models, the financial structure of streaming services, and evolving contractual agreements.
1. The Rise of Streaming Services
One of the most significant reasons that actors no longer receive residuals as frequently is the rise of streaming platforms like Netflix, Amazon Prime, Hulu, and Disney+. These platforms have drastically changed the way content is distributed and consumed. While traditional television networks and film studios had systems in place for reruns, syndication, and sales of DVDs and Blu-rays, streaming services operate under a different model.
Streaming platforms are subscription-based, meaning that revenue is generated primarily through subscriptions rather than through ad revenue or reruns. Because of this, there is no clear mechanism in place for calculating how much an actor should be compensated for the ongoing use of their work. While some streaming services have begun to implement some form of residuals, the payment structures are often less transparent, and the amounts are significantly smaller than what actors would receive from traditional networks.
In the past, actors earned residuals based on the number of reruns a show received or how frequently a movie was sold on physical media. However, streaming services like Netflix and Amazon have eliminated much of the need for reruns. Shows are available on-demand, and there are no clear-cut metrics for how often a particular piece of content is watched, making residual payments more difficult to track and calculate.
2. Flat Fees and Upfront Payments
Instead of traditional residuals, many streaming services now compensate actors with flat fees or large upfront payments for their involvement in a production. These payments cover the actor’s compensation for the entire project and are negotiated as part of the contract, meaning that actors are paid in full regardless of how often the content is consumed after its release. In some cases, the amount paid upfront is very lucrative, particularly for big-name actors in high-budget productions. However, this model means that actors are not entitled to any further payments for the continued success or distribution of the content.
For example, an actor starring in a Netflix original series may receive a hefty paycheck for each season of the show, but they will not receive residual payments if the show is later streamed millions of times. This differs from traditional broadcast TV, where actors would typically receive residuals for reruns or syndication.
Example: Stranger Things
One high-profile example is the cast of Stranger Things, Netflix’s wildly successful original series. The actors, including Millie Bobby Brown and Finn Wolfhard, reportedly receive substantial upfront payments for their work on the show, especially as it gained popularity over time. For example, it’s reported that Millie Bobby Brown earned around $350,000 per episode in the later seasons of the show. While this is a significant amount of money, it contrasts with the traditional model where actors would continue to earn money through residuals from reruns and syndication. The stars of Stranger Things are paid upfront, and once the show is released, there is no ongoing revenue-sharing based on viewership or reruns.
3. The Impact of Global Distribution
Another factor contributing to the decline of residuals is the global nature of streaming platforms. Content available on Netflix, for example, can be accessed by subscribers from all over the world, but traditional residual systems were built around national broadcast models. Syndication deals, reruns, and DVD sales were based on regional markets, with separate agreements for each country or region.
When content is distributed worldwide via streaming platforms, residual systems become more complicated. In many cases, the use of content in international markets is not covered by the same residual payment systems that were in place for domestic broadcasts. This lack of a standardized global system for compensating actors has made it difficult for many performers to receive residuals for the worldwide consumption of their work.
4. The Role of Unions and Contract Negotiations
Unions like the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) have historically played a crucial role in advocating for residuals and ensuring that actors receive fair compensation for their work. However, in the case of streaming platforms, unions have struggled to adapt to the new business models.
In 2017, SAG-AFTRA reached a deal with Netflix and other streaming platforms in which the unions negotiated for higher upfront payments for actors, but residuals were largely excluded from the agreement. The union was unable to secure residuals for streaming content, as streaming services argue that their model does not support the traditional residual structures of TV networks.
While unions continue to fight for better terms and residual payments for actors in the streaming era, the rapid rise of platforms like Netflix, Amazon, and Disney+ has created a challenging environment for actors and their representatives. Some unions and industry advocates are pushing for new compensation models that reflect the way content is consumed today, but change has been slow.
Examples of the Shift Away from Residuals
1. Amazon Prime’s The Boys
The cast of The Boys, an Amazon Prime original series, may not receive traditional residuals either. While the upfront pay for the actors may be significant, there are no residual payments based on the global popularity of the show. As The Boys continues to grow in viewership, with each new season attracting millions of subscribers to Amazon Prime, the actors do not receive further compensation for this sustained success.
2. Hulu’s The Handmaid’s Tale
Similarly, The Handmaid’s Tale, a critically acclaimed Hulu series, pays actors upfront for their work, but they do not earn residuals for the continued success of the show. Although the show has garnered numerous accolades and a dedicated fan base, the actors involved do not receive the same long-term financial benefits that would have been provided by reruns on traditional television networks. Instead, they are compensated through flat fees negotiated as part of their contract for the duration of the show’s production.
The Future of Residuals in the Streaming Era
As the entertainment industry continues to shift towards streaming platforms, the future of residuals remains uncertain. Actors, unions, and industry experts are calling for new models of compensation that reflect the realities of the streaming age. Some proposals include negotiating a percentage of subscription revenue for actors or instituting residual payments based on streaming metrics such as the number of views or the amount of time a show is watched.
While streaming services may be resistant to these changes, the continued success of original content on platforms like Netflix, Amazon, and Hulu means that the conversation about residuals is far from over. For actors, securing fair compensation in the digital era will require collective action, new contracts, and a rethinking of how the financial rewards of content distribution are shared.
Conclusion
The decline of residuals for actors, particularly in the streaming era, represents a significant shift in the entertainment industry. As streaming services like Netflix, Amazon, and Hulu dominate the media landscape, traditional models of residual payments have been replaced by flat fees and upfront compensation. While this structure may offer immediate financial rewards for actors, it also removes the long-term benefits that residuals once provided. As the industry continues to adapt to the digital age, it is likely that actors and unions will continue to fight for a compensation system that more accurately reflects the changing nature of media consumption. Until then, actors in the streaming era may find themselves earning big upfront payments but seeing fewer ongoing rewards for their work.
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