What are Residuals? | Royalty Payments for Acting Work

What are Residuals?

Written by on | Acting Industry

It all started when I came home from my morning walk (yes, I’m that kind of person) and found a strange letter in the mail. Hands shaking, nervous, curious, excited, I opened the letter with great care. Out of it fell a letter and a check—remember those? “Weird,” I said aloud, to no one in particular. “Checks in the mail are great, but why?” The letter explained that this check was for a job I did a year ago: it was a payslip for my RESIDUALS.

Residuals are a form of royalty payment received by actors, directors, writers and related creative professionals. They are generally negotiated by the individual’s agent, and are calculated based on the continuing sales and success of a film/show/commercial, using guidelines set by the wider industry.

Residuals can come across as this magic and mystical concept, or occurrence that happens to actors after a job well done. Sometimes a gig pays once and disappears. Sometimes a check can show up years later (and come in hella handy during the lean times.) It can seem random, but there is a method to the madness. Lets talk about how residuals work, who gets them, and how you can get in on the action…

What Are Residuals?

Residuals are an important source of income for many actors. They can add up to a significant amount over time so it can be good to know what they are and how they work. They are a form of compensation paid to actors and other creative professionals when their work is used beyond its initial distribution.

For example: if you appear in a TV show, you will receive payment for their initial performance. However, if the show is rebroadcast, syndicated, or released on DVD (for those awesome people that still buy DVD’s), you will receive additional payments in the form of residuals for each of those new reproductions of the original work!

The purpose of residuals is to ensure that actors and other creative professionals are fairly compensated for their work—even after the initial production has wrapped. Residuals are especially important for actors who work in TV and film, where shows and movies can be rebroadcast, streamed or released on home video for years to come.

How Are Residuals Calculated?

Residuals are different from your original payment. They come in after a certain amount of time. So how are they calculated? Typically, residuals are based on a percentage of the revenue generated by the distribution of the work. This percentage varies based on a number of factors, including the type of distribution, how long the actor was on set, how much the actor was paid originally, who the actor is, the length of time since the initial production, and the general market price for the production.

An actor might receive a higher percentage of revenue for a show that is rebroadcast within the first year of its initial airing, whilst a lower percentage might be paid for a show that is rebroadcast many years later. Another example is, say, that if Henry Cavil starred in a big motion picture, he would get far more residuals than a lesser known actor who only had ten minutes of screen time.

It’s worth noting that residuals are not paid for every type of distribution. For example, actors do not typically receive residuals for their work in theatrical productions as the revenue generated by these productions is generally considered to be a one-time payment. Unless the play is filmed and distributed through an online theatre streaming service, the actor’s job would conclude after the run as the play itself would no longer be making money.

Speaking of streaming…

Residuals in the Streaming Era

Last year, Euphoria star Sydney Sweeney gave a candid interview to The Hollywood Reporter in which she basically said acting wasn’t enough to pay the bills. Sounds crazy, right? (Sounds familiar, if we’re honest with ourselves…) This is because residuals in the era of Neflix, Disney+ and Max is calculated differently.

Streaming residuals are lower. Much lower. They lack the same industry standardisation and fairness that has protected talent in Hollywood since the 1960s. Eligibility kicks in at different times, and is tied to things such as viewer numbers that most companies guard fastidiously—making the accuracy of their claims hard to substantiate. Ever wonder why Netflix or Disney pulls old shows down, even though they produced them and therefore own them forever? Because it’s cheaper not to pay the actors of those shows if they don’t have to.

As of 2023, these rules are under greater scrutiny. And as of the writing of this article, the Writer’s Guild of America (WGA) are picketing for better rights under the streaming model (if you think actors get a bad deal…) With any luck, we’ll start to see some more substantial changes to these models so actors can receive the compensation they deserve.

What Are The Benefits of Residuals?

First, a question: what is better than getting paid once for a job? Getting paid twice or more times! Residuals reflect that you might have worked ten years ago on a tv show that people still love. If you’re still entertaining people, you’re still working (kinda!)

Residuals are the closest thing actors will experience to passive income. Once the initial production has wrapped, actors can continue to receive payments for years to come, even if they are not actively working on new projects. This can be especially helpful for actors who are between jobs or who are trying to build their careers.

How Do I Earn Residuals?

“So how do I even get these residuals, Sam? Getting paid multiple times for one job? Sign me up!”

First step is a paid acting gig outside of theatre. No real way around that. Even when you do, residuals are not automatically guaranteed. If you book the gig with your agent, they’ll negotiate what you receive on your behalf. If it’s something you’ve found on your own, you may need to inquire about it yourself.

When in doubt, I’d recommend hiring an entertainment lawyer who can help you through the process. At the very least, try and get some advice from other actors or people in the industry that you know. It never hurts to get a second opinion.

Common Questions

Will I get residuals for an acting gig that I didn’t get paid for?

Probably not. Of you don’t get paid originally, you can not get residuals. Also, just because you performed does not mean you get residuals automatically. You may, however, be able to negotiate profit share or royalties before signing on, if such an arrangement is on the table with the producer in question.

Do I get residuals for doing just any job on set?

Unfortunately not. Residuals are often reserved for principle creatives such as actors, stunt people, puppeteers, supporting actors, picture doubles and anyone else who has an impact in the performance such as the writer, director, etc. As a rule, extras tend not to be eligible for residuals.

When will I get my residuals?

How long is a piece of string? It depends. They usually come in once the production actually comes out. Then once it gets distributed you will receive a payment whenever they become redistributed. The main takeaway? Be patient, and check in with your agent if you think something should’ve come in that didnt.

Will I still get residuals if I change my agent?

Yes! Your past agents have an obligation to pass on any information that gets sent to them to new representation. If you believe that your old agent is withholding any payments, be calm and approach them respectfully. Often, these situations are a mix-up or an honest mistake. You can always ask for help from your current agent or an entertainment lawyer to make an enquiry on your behalf; however I would strongly recommend to withhold any accusations or judgements.

Conclusion

So there you have it: the run down on the mystical and elusive residuals. Always remember that residuals are never guaranteed, that they can be negotiated. Above all: keep your exceptions low. Sometimes they can be substantial, but other times they can be as little as $5. (The lowest I have ever gotten was six whole bucks). As awesome as they are to receive, it is best not to rely on them, and to treat them as some bonus cash rather than a guaranteed pay day.

So get out there: get working, and I hope the universe blesses you with many random checks in the mail in the future!

About the Author

Samuel Hollis

Samuel Hollis is a Brisbane based actor, writer, and pop culture enthusiast. He grew up with a love for storytelling which fuels his passion for acting and writing. His works span from theatre to screen, and from script writing to mediocre poetry. He believes that the key to improving your craft is to improve the greatest tool that you own; yourself. When Sam's not spinning up a riveting story or typing until his fingers fall off, he's rolling dice with his Dungeons & Dragons group, playing the sax, or taking long walks at sunset.

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