Thursday, July 12, 2007

Hollywood Executives Call for End to Residual Payments

From the July 11th NY TIMES:

'In an unusually blunt session here today, several of Hollywood's highest-ranking executives called for the end of the entertainment industry's decades-old system of paying what are called residuals to writers, actors and directors for the re-use of movie and television programs after their initial showings.'

Now, this should instantly be filed under the "Dude, it's not April fools Day" or "Dude, give me some of that crack you're smoking" or any other number of derisive thoughts. And it will be. But for now, I have the feeling that every industry blog is writing about this as quickly as can be. I'm sure there will be similar thoughts to mine, much better worded. Think of these as quick, undisciplined musings, subject to editing.

'The executives stopped short of saying they would demand an immediate end to residual payments in the upcoming, probably difficult negotiations with writers, actors and directors. But they were emphatic in calling for the dismantling of a system under which specific payments are made when movies and shows are released on DVD, shown abroad or otherwise resold. Instead, they want to pool such revenue and recover their costs before sharing any of the profit with the talent.

"There are no ancillary markets any more; it's all one market," said Barry Meyer, chief executive of Warner Brothers. "This is the time to do it." '

Wow, from the mouth of the head of the Cosa Nostra himself. One must never forget that Warner Brothers invented the Gangster picture. There's a reason for that. Never forget that. I say this not from second hand information. I have a deal with Warners. I know. I get the statements.

The idea of pooling revenue and "sharing profit with the talent" – they should never have said that because that's the giveaway that it's gotta be a joke of some sort. Movie 'profits' and accounting are the worst, most notorious that exist. There are always expenses eating away at the profits – to the point where most movies lose money on the books.

So, this will never fly.

The thing is, I do have mixed feelings about residuals payments. Why should we (the artist) get residuals? We didn't take the risk in producing (funding) the movie, did we? We already were paid to do the work once. It's the same as if a car mechanic wanted a piece of the action when you sold your car down the line.

The studios will likely point to super stars like Tom Cruise who reportedly has made 400 million dollars on the Mission Impossible series with residuals and cry - "oh, we can't afford this." So get rid of him. Oh, yeah... you did. So the fact is that you don't have to pay it if you don't wanna.

The flipside of the argument is that movies become more valuable as the creators of them become more famous – so they should be able to share in the profits. It's also not really the same as fixing a car. It's a creative business. The talents and the faces of the of the people are the thing.

Additionally, most residuals are for actors and writers who aren't making that much money. This is life blood; a one day gig which is dependent upon their face, or words might initially pay a few thousand bucks. If it generates millions of dollars, isn't it fair to give a piece to the face or wordsmith?

Frankly, I believe, while these statements obviously have a lot to do with the upcoming negotiations of the Writers Guild (the big part of the negotiations is INCREASING residuals in future mediums), they also have something to do with the can of worms I helped open a couple months ago – about foreign levies and the perverted definition of Authorship.

See, studios buy the work that the writers, directors and actors do. They own it. Legally speaking, a "studio" could accept the Oscar for "best screenplay by" because according to copyright law with film, screenplays are "works for hire" thus – it's the studio who can take all the credit (why not go for all the money too?).

This is going to be contended; something I think will wind up at the Supreme Court level with the studios fighting tooth and nail, every step of the way. This crazy statement is an early punch in that fight. If they (AMPTP, ET AL) lose that "work for hire" definition, they will have to license the screenplays, etc. from the creators. That will solidify residuals payments in a way that doesn't exist now.

Barry Meyers, along with the other Studio/TV heads are pulling a Cheney/Bush trick: be outrageous in your statements – go WAYYY out into right field, do it righteously and with a straight face. Then, when people ask for something realistic – you're still WAYY out there. Be Audacious.

The one thing that these finite, forgettable people (Barry and co, you will be a forgotten piles of dead dust while people still talk about and remember Billy Wilder, Robert Towne, etc.) must realize… if they push on this in the slightest, every guild AND non-guild member will stop working. NO ONE is going to go for this. It's a war they can't win.

I will elaborate, perhaps edit this entry. For now, I put it up and hope to hear some comments.

Here is the link to the entire article. You may need to login or create an account – which is free and doesn't take long.


  1. 1. "I'm sure there will be similar thoughts to mine, much better worded." Not as of yet. I've read the articles, and yours does the best sifting.

    2. Your NY Times link will turn to dust in a week, as they'll archive it to the "Times Select" thing. So just cut and paste it - of course, remembering to pay the authors their due residuals.

    3. Speaking of dust, re Barry Meyers vs. Billy Wilder, may I refer you to these words by Shelly: "Nothing beside remains. Round the decay / Of that colossal wreck, boundless and bare / The lone and level sands stretch far away." Counterargument: I'm quoting his words, 190 years on.

    - Brian

  2. hey I just saw your levy breaks article today. Great read, I remember you blogging about meeting Anger a few months back. No real insight from me. Take it easy.