Putting Residuals in Perspective

In an article in today’s NY Times, Michael Cieply covers a recent study that looks at the overall profitability of the major studios. The report estimates that the majors distributed about three billion dollars last year in gross participation deals to stars and big above-the-line talent — deals that typically pay out regardless of whether a picture makes or loses money.

Meanwhile, the WGA estimates that total residual payments last year were just $121 million. So, as usual, the little guys fight over a tiny slice of the pie, while the big guys take home a huge hall.

The report also says that, over all, the majors lost about $2 billion last year, so $3 billion looks very significant to the town’s bottom line.

The networks aren’t going to present this strike objectively — they’re hardly disinterested observers. But many liberal voices have come down firmly on the side of the writers. The New York Times ran an interesting and supportive op-ed piece yesterday, by Damon Lindelof, co-creator and head writer of “Lost,” covering many of the key issues in the context of a newly Tivo-ed and digitized TV environment.

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