A Writer's Blog: From the Picket Lines, Week 2 - "Residuals, Take Two"

Posted November 16, 2007 by A.E. Vogler
When the strike began, there was a great deal of confusion over the issues. But two weeks in, much has been written about the key sticking point, by me and by others: residuals in new media. (See my last post for an explanation of this.) Now that the residuals concept is better understood, I’ve been hearing a lot of people moving to the next logical question: why do screenwriters feel they deserve residuals in the first place?

It’s a damn good question. One I myself have asked many times. Before all this craziness began, I was highly skeptical of the concept of residuals. At dinner with some other writers the night after the big November 1st WGA meeting at the Los Angeles Convention Center, where Patric Verrone declared a strike, I expressed an opinion that the residuals we were about to go to war over were a bargained-for benefit, not an inalienable right. I used the example of a guy who lays down sheet metal. He doesn't get a payment every time GM sells a car. When you’re paid for your work, you’re done. Why on earth would screenwriters feel we deserved anything more?

But now the strike has put me face to face with the idea of residuals. Having delved more deeply into the issue, I have moved more to the center. The point that has been made to me again and again in my discussions with pro-residuals strikers is that a work of art is unlike a panel of sheet metal in that it can be reproduced - "cloned" as it were - over and over ad infinitum, and sold for profit each and every time. In other words, the guy laying out sheet metal produces one panel, then one panel is sold. He produces another, another is sold. Etc. But when a movie is made, it’s made once, then reproduced (not recreated) as many times as there is a buyer.

In this scenario, it is not the labor that is the key issue. It’s authorship.

A news helicopter flies above the striking writers
Think of your favorite living novelist. Someone who wrote a book that means a great deal to you. Do you feel that this writer is entitled to share in the profits when copies of his books are bought off the shelves of Barnes and Noble? For that matter, did Samy Cohn and Jimmy Van Heusen deserve payments every time someone bought a copy of Sinatra's hit, Come Fly With Me? If you answered yes, you’re in luck. These writers do get paid on the back end by something called royalties.

To understand residuals, you have to first understand royalties. Royalties are payments to copyright holders for usage of their intellectual property. While some novelists and song writers sell their copyright to publishers, many retain it. For the privilege of owning and controlling their work, these writers get paid less up front. But if what they’ve written is a hit, they make a ton of money in royalties. (Another kind of royalty is a “patent royalty.” The person who invented and patented the chair you’re sitting on right now gets royalty payments every time a retailer sells one off the floor.)

What's different about screenwriting from other forms of writing is that the author does not, in fact, retain authorship. "Authorship" implies control, something the studios are not willing to give, and so a system has been devised whereby the writer works on a for-hire basis, as an employee. This makes the studio the legal "author" of our writing, which in turn entitles them to do whatever they want with it creatively. (And if you’re one of the people who thinks Hollywood is a big shit factory, I’ve just given you a giant clue as to why.) For the privilege of owning and controlling our work, they have to pay us more up front. Because the studio is the legal author of a film, there can be no royalties to the actual writers. This is how the weirdo concept of residuals came about. They are in practical reality different from royalties only in that they are considerably less than royalties, which is due to the fact that we get paid more up front.

Joe Novelist gets less up front, controls his work, and makes more on the back end.

Joe Screenwriter gets more up front, has no control over his work, and makes less on the back end.

That’s the story with residuals. They’re about authorship.

A friend of mine recently suggested that if our work is so important to us, we should refuse to sell it. In a way, I agree with that sentiment. In fact, I have been arguing on the picket lines that we're striking for the wrong thing. Screw residuals. Let's redesign the entire system so that we retain copyright of our work and license it to the studios when they decide they want to produce something. This would mean less money up front and less wealth all around, but it would also mean creative control and higher profit if a film is successful. It would be a sea change in the way the entertainment industry operates. And it will only happen with a bloody revolution.

Maybe this is that revolution. Or maybe, like a bad sitcom, everything will end just as it began, and we’ll all get back to business as though none of this ever happened.

I’m not sure which outcome I’m rooting for.

Click here to read the next blog post from A.E. Vogler.

Categories: TriggerBlog, WGA Strike

Showing 3 of 6 comments Comments

Jabadaw wrote:
A.E., like tststs said, a computer programmer is a great example of what the writer's role really is. The writers are employees. They produce a good that belongs to the company they work for. Now, programmers could always work as a contractor or start their own company (where they could retain 100% rights to their creations), but with the greater pay these options provide, it also puts their income at greater risk. In the case of the union writers, the studios/networks are incurring that risk, not the writer. Yet the writers only want to reap the rewards if it's a hit. I don't hear them offering to pay back the studio when they create a pile of junk. I've never been a fan of unions. Their time has passed. It's not like these writers are 10 year olds working with dangerous machinery for 12 hours a day because they have no choice. All they do now is protect the ineffective and hold back those that are great at what they do.


I don't think this is as common now, but high-level programmers often get paid in stock options, which is not unlike the incentive of residuals: if the stock does well, the option increases in value.

Most work-for-hire writing requires little creativity (it's usually something like an encyclopedia article or technical manual), and has a fairly short shelf life, replaced eventually with another work-for-hire.

Screenwriting falls between the extremes of craftsmanship (programming, welding) and art (novels). That's why this odd form of compensation for intellectual property has developed. Why not compare screenwriters to athletes, who provide entertainment even though they're not the coach? Or to actors, even though they don't usually write or direct?

And if the writers are overpaid for delivering mediocre content, what about the studio heads who commissioned the content in the first place and make enormous profits, regardless of the quality of their content?
no image submitted Posted by AlCielo November 28, 2007
One advantage of replacing the "big payment up front" for purchase of the copyright, with a "small payment up front for leasing," with fair and accurate payments if the finished work is successful is that it would provide an incentive for writers not to sell a piece of trash if it wouldn't make big bucks after release (a la Sliver).

But the small payment up front would probably be very small (maybe under six figures for an A-level script), and the writer would be assuming the risk that studios and producers now accept.

Fights between writers and directors / studios would be even more common and damaging in an industry where traditionally everyone else has become accustomed to demanding script changes. And what would happen to re-write artists and script doctors?

It's a good idea, but might not be practical at the upper levels. It would be interesting to see the concept floated with indies first.
no image submitted Posted by AlCielo November 28, 2007
A.E., like tststs said, a computer programmer is a great example of what the writer's role really is. The writers are employees. They produce a good that belongs to the company they work for. Now, programmers could always work as a contractor or start their own company (where they could retain 100% rights to their creations), but with the greater pay these options provide, it also puts their income at greater risk. In the case of the union writers, the studios/networks are incurring that risk, not the writer. Yet the writers only want to reap the rewards if it's a hit. I don't hear them offering to pay back the studio when they create a pile of junk. I've never been a fan of unions. Their time has passed. It's not like these writers are 10 year olds working with dangerous machinery for 12 hours a day because they have no choice. All they do now is protect the ineffective and hold back those that are great at what they do.
no image submitted Posted by Jabadaw November 19, 2007
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