Should Actors Get Royalties?

Now that the new video iPod and iTunes 6 give the user the ability to download TV shows for a small price ($1.99), an interesting problem is brewing. And it’s the worst kind of trouble… Union trouble.

You see, according to CTV.ca, actors and writers are lining up and asking the question “where is our cut of this new iTunes service?”. Here’s an excerpt from the story:

In a show of unity, five unions representing actors, writers and directors issued a joint call for talks to make sure their members get a cut of revenue generated by the sale of TV shows on Apple’s iTunes software. The unions sent a clear message to TV producers. “We have not yet heard from the responsible employers of our members,” their joint statement said. “But we look forward to a dialogue that ensures that our members are properly compensated for this exploitation of their work.”

This all raises a pretty good question… should actors (and I’m just going to focus on actors here for the sake of simplicity) be entitled to royalties at all? Should performers be continually paid money when they’re done performing their jobs?

I want to be both careful and clear here. I love actors. I have a couple of very dear friends of mine who are actors and me raising this question is in no way meant as an insult to the work that any actor does. But in all fairness… it is a question that can be legitimately asked.

I’m not going to pretend to understand all the ins and outs of how actors receive royalties. I’m sure it varies. So I’m really asking this question from a principle standpoint… not a details stand point. So here I go…

When a person takes a job… any job really… they agree to perform a certain task in exchange for a certain amount of money. We all understand this. Once we’ve performed our task, and subsequently paid our money… then it’s done. A delivery driver is paid for the work he did delivering 21 pizzas last night. A handyman is paid for fixing a porch. A plumber is paid for installing new pipe. I give him my $200 and hope I never have to see him or his crack again.

However, actors (as well as numerous other professions… but remember… I said I’m just focusing on actors here for simplicity) in television and film have an arrangement where they get paid for thier work… but then continue to get paid as the program or movie continue to be shown. Royalties. Should this be the case?

Why should actors continue to get paid for 2 months of work 3 years from now when they were already paid for their 2 months of work? A carpenter doesn’t make an executive boardroom chair and then say “Thank you for the $500 to make this chair. Remember, that I also want 2.1% of any business deals you make while sitting in this chair”. That would be silly.

A painter gets paid $5000 for re-painting an office top to bottom. He doesn’t then go on to say “Now, don’t forget to send me cheques for 1.3% of any new business you get. Afterall… the new paint job that I just did for you is going to continue to help your business image and therefore I’m entitled to a cut”. That would also be silly.

So why is it just accepted that Film and Television actors should be continuously paid this way? They got hired to do a job… they showed up for their 3 months of filming and got paid for their time. Shouldn’t that be the end of it? Why at this point should any of them be entitled to royalties from anything (including tv shows getting downloaded from iTunes)?

I don’t ask this question rhetorically. I’m really curious as to what you think about it… and how you would answer it (for or against).

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16 thoughts on “Should Actors Get Royalties?

  1. As to whether the key grip (or behind the scenes workers) should get residuals…If they can negotiate it, more power to them.

    However, they might have a hard time…

    Any service provided at a cost is a product. A product’s value is based on the size of the market it is in and supply and demand. The fact is, is that the key grip and the actress are selling different products to different markets. Indeed it is an apples to oranges comparison.

    The key grip can demand only what the producers are willing to pay her. What they pay her depends mostly on the quality of her work, and the number of qualified key grips trying for her job. If she’s the only grip in town, she can name her price (maybe even residuals if she is audacious and the producer doesn’t know any better). If everyone and their grandmother are in the key grip union, she will be lucky to have a job and therefore more willing to settle on lower compensation for her service.

    The market for the actor and the actor’s product, as per my prior post, are a different arena altogether and governed by forces in addition to labor supply and demand. She should be compensated for her labor of course, but her product extends to the exposure of her image in the marketplace, and her future value as an actress depends in part on how her image is used. Therefore, she should feel justified in demanding residuals.

    Peace

  2. Businesses sell products. Cars, books, energy, unclogged toilets, season box seats, etc…

    An actor is a business entity. An actor’s product is any iteration or use–for profit– of her image. Like any product, it’s perceived value is governed in large part by supply and demand. Every time an actor’s work or image is exposed to the market, her product loses value, but while it is in the market she deserves fair compensation.

    An author of a best selling book does not just reap the benefit of her book advance and leave the rest of the profit in perpetuity to her publisher. She deserves a percentage of all sales including when the book moves to paperback and then discount bin. The work is her intellectual property, and she is entitled to negotiate with her publisher the best percentage of profit she can get for the lifetime of the product.

    So too with an actor. A syndicated television show demands less advertising money that it did in it’s first run. It’s supply is greatly increased, so it’s demand and perceived value goes down–and it takes the value of the actor’s image with it (supply and demand means an actor in a film can expect a larger paycheck than an actor in a TV movie). Yet, the actor’s contribution, namely her performance and image, remains as her product. It may be in the discount bin of TVland reruns, but she deserves proportionate compensation just as an author with a once hot book.

    The plumber analogy is not apt because her work is customized and not designed for use by more than one client at a time. It would be more in line with the actor/residual question if the plumber creates a unique plumbing fixture that she can sell to the multitudes but then only takes a profit up to the point of recovering development costs, but after that gives them away. Of course this would be absurd because the invention is her intellectual property and she deserves any and all profit from her creation.

    Peace

  3. Hey Kimo.

    Actors don’t invest their money in a project. They don’t stand to lose anything at all. If the movie bombs… they still get their pay day. But the producers are out millions of dollars.

    In my opinion… only those that stand to lose money in the event of failure, should be the ones to reap rewards in the event of success.

    So here’s question… then should everyone who works on a film or TV show, in front and behind the cameras, who puts in effort to create the project be entiteld to Royalties? Or are actors the only ones?

    As for the Plumber… ask a business how well they’ll do if they’re offices are springing leaks everywhere and have toilets overflowwing. You bet that plumer has something to do with it.

    Cheers!

  4. Absoloutely “YES.” Actors should get there DUE royalties. If money has been generated with a project with their involvement, then SOMEBODY will be swimming in green. Of course artistic types who don’t understand business always have, and always will, get screwed over money.

    And the opening message with comparison to a plumber…what…?

    A fitted pipe does not create revenue for it’s owner. Unless you charged for the use of your toilet…

  5. I would think studios would like giving actors royalties to some degree…it lets them share the risk of the success of the TV show with the actors. Without the promise of future royalties, big-time stars would demand much more upfront, and then the studio is hosed if things don’t work out.

    That said, this doesn’t apply to the iTunes thing, since there the shows are already made (and upfront salaries already paid), and so the studios are certainly not going to have any interest in giving actors royalties on those. As far as that goes, the actors deserve the royalties if they have rights to them in the contract that was negotiated.

  6. I think they should get paid their royalties…why you ask? Because that is their job and what they do for a living…would you go to work and have someone turn around and sell your work under your nose and give you nothing in return? Sure these actors and musicians get paid ungodly amounts of money for their work, but they paid their dues to get where they are. They gave their time, effort, and talent to entertain us and then get shafted by the the studios. The unethical business man in me would say shut the hell up and take what you got…but that is not fair you or me. They have a job and they should get paid for that job. Now if only my bosses would listen…I NEED A RAISE…now that I think about it…I should get paid every time I see the Marine Corps commercial come on TV. Where’s my lawyer!!!!!!!!!!

  7. Myself as a musician… i had no idea actors weren’t paid royalties.

    But if you download music off an ipod.. an artist gets paid. Its their work…

    thought it would be similar already.. but then again Movie production companies aren’t ‘labels’.

  8. I echo the post of Basics. Could not have said it better myself. Also, with some off shoot spinoff like merchendising, actors likenesses are used, they should, according to thier contract, get the royalities, big or small.

  9. Basics has it pretty well covered I think. I’ll add the royalties actually keep the cost of entertainment down by allowing producers to pay next to nothing on the 90% of projects they back that don’t make millions. Without a royalty system in place, very very few TV shows or moviews would ever get made.

  10. The simple answer to your question is that actors should get whatever they are able to negotiate with the studios. If they didn’t have the foresight to include language that would umbrella iTunes into their royalty agreement, that’s their mistake. The studios’ lawyers likely limited the royalty clauses to extremely specific areas, and the actors now realize they’re going to miss out on potential royalties because of it.

    As far as royalties in general, it’s really a market issue. Your comparison to carpenters doesn’t hold because the market is different. There’s only one “insert favorite actor here” so supply is limited. Additionally, a carpenter’s work cannot be duplicated without doing the work again.

    In an “Ideal World”, the studios would extend contracts with existing royalty clauses to their iTunes sales, but I’m pretty sure we don’t live in that world.

  11. It was decided decades ago that studios and producers (management) were taking advantage of actors, writers and directors (talent) by paying them low wages up front, and then exploiting their works for millions of dollars.

    The talent organized into guilds (SAG, WGA, DGA) and struck the employers until they got a fair share of the back-end. So no matter if you work in movies, TV or radio, talent gets royalties (aka “residuals”) every time the work is distributed to an audience. The fee paid for services usually includes royalties for the first two showings. Once it’s premiered on TV and rerun in summer, you get a check every time it gets run. Foreign TV? You get a check. DVD? Ka-ching. And the studios know this.

    So Bob Iger makes the iTunes deal…and neglects to tell the unions. Wonder why?

    Because a HUGE bone of contention between studios and guilds is royalties on DVDS. Before DVDs, the studios cut a deal whereby they calculated residuals on home-video from only 20% of home video sales, because 20 years ago there was only a 20% profit margin on VHS tapes.

    In 2005, the margin is more like 80%, and DVDs are selling like hotcakes. All the Guilds want a new bite at the apple, and want their share of DVD, VOD, iTunes and everything else.

    This is just one more fight in the battle.

    IMHO…

  12. I believe that actors and performers should be payed royalties for work done previously. Entertainment is a very wishy-washy industry to devote your life to and can be nerve-wrecking at times when the only casting calls out there are for 6-foot blonde busty babes. This seems to be one of the only few intances of “job security” in the performance world. Besides, how often do performers actually get to work on productions where people would be interested in buying syndication rights for them, anyway? If people are making money off of your performance, whether it be the present or the past, then you should definitely be compensated accordingly.

  13. It’s the same issue that was brewing with voice actors and video games. You did your job. You got paid. No one else in the world gets as pampered for so much money. Noone else in the world gets perpetual royalties for simply doing their job. Bobby doesn’t get paid a buck every time a fast food customer returns to eat a burger.

    Pro Athletes and thespians drive me bonkers.

  14. They probably SHOULD get royalies, but I’d be against it because that will drive up the price on iTunes.

    Also,I’m sure they’ve (the actors in “Lost” for example) already signed a contract of what their salaries are. In said contract, there might be a stipulation that says they do or do not get a cut of re-runs or syndication or DVD sales, etc. Downloading on the internet may be included in this contract.

    I don’t know, just a thought.

    Greedy bastards.

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