As Hollywood actors strike, one word has come up again and again: residuals. As in, the actors find the residuals being paid to them in the era of streaming TV and movies unacceptable, because they're shrinking down to, in some cases, mere pennies per episode.
In the first few days of protests, the cast of Orange Is the New Black, This Is Us alum Mandy Moore, stars Sanaa Lathan, Rosario Dawson and many more have gone public with stories about paltry residual payments over the years.
Residuals are just one — but a major one — of the issues that actors are striking over. So what exactly are residuals? And why do they matter so much? Here's a closer look.
Residuals are payments made to performers when their work appears elsewhere. They are sums paid in addition to their upfront salary. Take Moore, star of NBC's hit show This Is Us. She was paid when she did the show, which ended in 2022, but also receives payments when the show airs again (remember the concept of TV's summer rerun season?) or is streamed, as is the case under a deal that producer Disney made with Hulu. Shockingly, Moore said Tuesday as she picketed, that she had received a check for less than a dollar as part of that deal.
'Bigger than when cable came in'
The amount of the residual is determined by a complex formula that takes into account factors like the amount of time an actor spent working on the production, the market and, in some cases, how many people see that work. Actors have complained that, under streaming, their individual residuals are lower than they were with cable. And while they once relied on these residuals to keep them financially afloat between gigs, they say they're no longer enough to make a living.
This issue of residuals in a changing entertainment landscape has come up before. SAG-AFTRA members last renewed their agreement with the Alliance of Motion Picture and Television Producers in 2020, when an official news release touted "significantly improved residuals for streaming video."
This will be a tightly fought battle this time, though, as has already become apparent.
Entertainment attorney and journalist Jonathan Handel tells Yahoo Entertainment that this moment, with its pivot from cable and broadcast to streaming, is particularly significant for the industry.
"It's bigger than when cable came in," Handel says. "The last time film and entertainment saw such dramatic changes in such a short period of time was the end of World War II."
He notes that, back then, a third of the country went to the movies every week during 1945 and 1946. In the dark, air-conditioned theaters, they could not only see Joan Crawford or Gregory Peck, but news reels fresh from the front lines that they couldn't see at home, as TVs were still a rare extravagance. But then TV became something we all had, and now we're watching a lot of stuff at home, particularly after the internet and streaming came in followed by the COVID pandemic. The newer system that's been adapted has left working actors — people who aren't Meryl Streep or Denzel Washington — with less cash.
"The aggregate amount of residuals paid to all actors in aggregate… has gone up every year over the past 25 years," says Handel, who created an oft-cited chart of formulas used to determine the amounts of residuals. "But that doesn't tell us the circumstances of any individual actor — or writer, for that matter — because it's quite possible that the pool of residuals recipients has gone up at an even faster rate." (While the number of, say, TV shows has increased, Handel explains that, as many series produce fewer episodes, the hours of content created has remained largely the same.)
Handel points out that other issues going on are that residuals for content distributed in less traditional ways are sometimes paid all at once, along with a person's initial payment, so it can be jarring that they don't receive anything later.
Not to mention, explains S. Mark Young, a professor at the University of Southern California's Marshall School of Business who specializes in entertainment, "Residuals under the streaming model have been greatly reduced."
Even the rare popular show doesn't ensure that the actors will be well compensated on the residuals end, because they're paid a flat rate of residuals rather than according to the number of times the content is viewed.
"If a program is successful the level of residuals is much lower than under the traditional model," Young says.
'We couldn't afford cabs to set'
The Best Man star Lathan, whose credits date back to 1996, told the Washington Post on Friday, as she picketed at Warner Bros. Studios in Burbank, Calif., that she's certainly felt the difference in how actor's are compensated in the streaming economy.
"At least when you worked back in the day, you saw residuals and you could pay your bills. I think I got my SAG card doing a Secret deodorant commercial," she said. "I was able to pay my rent back then for a whole year while I was still a struggling actor going out for auditions. That would never happen today."
Grey's Anatomy actress Ellen Pompeo used her Instagram Story to call out Netflix for failing to pay actors fair residuals.
And actress Kimiko Glenn, who played Soso on Netflix's Orange Is the New Black, told The New Yorker that many cast members couldn't afford to quit their side jobs, even as their show was so well watched that Netflix leader Ted Sarandos once said it was bigger than HBO's blockbuster series Game of Thrones.
"People were bartenders still. People had their second jobs still," Glenn said on TikTok. "They were f***ing famous as s***, like internationally famous, couldn't go outside, but had to keep their second jobs because they couldn't afford to not. We couldn't afford cabs to set."
In 2020, for example, Glenn had shared a residuals statement for just $27.30.
Lea DeLaria, who played prisoner Big Boo, continued to do stand-up comedy so she could pay her rent. Matt McGorry (corrections officer John Bennett) commented on one of Glenn's posts, "I kept my day job the entire time I was on the show because it paid better than the mega-hit TV show we were on."
Meanwhile, Beth Dover, who portrayed prison worker Linda Ferguson, said she spent money to be on the show, because she sometimes had to fly herself out to where the production was shooting. "I was so excited for the opportunity to be on a show I loved so I took the hit," she wrote. "Its maddening."
In a recent interview, she declared, "We need to update the system."
The chorus is growing.
A NSFW clip of a speech that Snoop Dogg gave in May at the Milken Institute, which resurfaced this week, shows his frustration.
"I mean, can somebody explain to me how you can get a billion streams and not get a million dollars?" he says. "That's the main gripe with a lot of us artists is that we do major numbers with streams and this s***, but it don't add up to the money. Like, where the f*** is the money?"
Snoop Dogg breaks down why streaming residuals is a huge issue for SAG-AFTRA & WGA. Well said! pic.twitter.com/fBOSUOyPnV
— Todd Spence (@Todd_Spence) July 18, 2023
D.B. Woodside, a veteran of TV series including The Night Agent, 24 and Buffy the Vampire Slayer, tweeted that "RESIDUALS MATTER," noting that "the overwhelming majority of TV shows are not filmed in LA where most live," which means that some actors have to pay to live in another city and to visit their families.
The overwhelming majority of TV shows are not filmed in LA where most live. So, what does that mean? Well, if you’re a series regular on a TV show you get flown to another city (another country, Canada usually) where you’re expected to LIVE for the duration of filming. They give…
— DB Woodside (@dbwofficial) July 18, 2023
The Office alum David Denman, who played Roy, lamented his cut of the show's popularity on streaming.
"Netflix has created a great business plan for themselves, and that's to buy out the residuals, not on a play-by-play basis. So all those people that love watching The Office, god, we appreciate it, because, without you, we don't have a show. But every time someone comes up to me to tell me how many times they watched it, I'm so grateful, but I don't see much money of that. Very, very, very little."
Deadline captured Haunted Mansion actress Rosario Dawson saying that she was striking because "if it wasn't for the folks who fought for me to have residuals, I would've been living on ramen for the rest of my life."
WHY I’M STRIKING: “Because if it wasn't for the folks who fought for me to have residuals, I would've been living on ramen for the rest of my life...” Rosario Dawson, SAG-AFTRA #ActorsStrike pic.twitter.com/rohHdeZPEO
— Deadline Hollywood (@DEADLINE) July 17, 2023
Jana Schmieding, of Reservation Dogs, showed that she had received a payment of three cents for one quarter of streaming.
To fans of my character Bev on Reservation Dogs, here’s a peek behind the IHS counter at what part of my residuals looks like for acting on a show that I love. I pull in $.03 each quarter for UNLIMITED world wide streams on fx/hulu/DISNEY.
& Iger is yachting. #SAGAFTRAstrike pic.twitter.com/u6JjubmznZ
— jana (@janaunplgd) July 17, 2023
The X-Files star David Duchovny made residuals the focus of his sign during a day of picketing. "The residuals are out there," it read.
— Scott Perry (@scottperry) July 17, 2023
The issue has yet to be resolved.