Residuals

What are residuals?

A residual is a reuse payment. The original fee covers the first use of a performance, a script or a directing job — the theatrical release of a feature, or the first broadcast of a TV episode. When that same work is exploited again in another market, the people who made it get paid again.

The obligation comes from collective bargaining agreements negotiated by the guilds: SAG-AFTRA for performers, the Writers Guild of America (WGA) for writers, the Directors Guild of America (DGA) for directors, plus the musicians' union for recorded scores. Anyone working under those contracts is covered automatically; nobody has to negotiate residuals into an individual film contract. It is one of the main reasons talent joins film unions.

Residuals for TV reruns date back to the 1950s; the 1960 strikes by the Screen Actors Guild and the Writers Guild extended them to theatrical films, when the studios agreed to pay talent when new films were sold to television. Every new market since — home video, pay cable, streaming — has meant a new fight over them.

How do residuals work?

Three things decide a residual: the guild contract the work was made under, the market it is reused in, and who holds the rights at that moment.

• The trigger is reuse, not success. A rerun, a cable sale, a DVD or digital purchase, a streaming or foreign license each triggers its own payment. The first theatrical run of a feature does not — that is what the original fee paid for.
• Two kinds of formulas. Some residuals are fixed: a percentage of the guild's minimum rate, typically shrinking with each rerun of a TV episode. Others are percentage-based: a share of the distributor's gross receipts from home video, pay TV or licensing, divided among everyone eligible.
• The payer is the rights holder. The producing company owes residuals, and when it sells the film, the buyer or distributor normally assumes the obligation. That is why film distribution agreements for union films include assumption agreements.
• Payments flow through the guilds. Studios report reuse and pay; the guilds process the checks and chase late payers.

A hit series in syndication can pay its cast for years; a small role in an old film might produce checks for a few cents.

SAG-AFTRA residuals for actors

Under SAG-AFTRA contracts, principal performers — anyone with lines or a featured role — earn residuals. Background actors generally do not on film and scripted TV work.

For television, the fixed formula pays a portion of the actor's minimum session fee each time an episode reruns on network TV, with the percentage stepping down over successive runs. For films and for TV sold into supplemental markets such as home video, pay cable and foreign TV, the guild's percentage of the distributor's gross is pooled and split among the cast according to a formula that weighs time worked and pay.

Residuals matter more to working character actors than to stars: for a guest star or day player they can decide whether they stay eligible for guild health insurance between jobs. The 2023 agreement also added consent and payment rules for digital replicas of performers — relevant to anyone generating actors with AI.

WGA residuals for writers

WGA residuals are owed to the credited screenwriters on a film or episode. Credit matters: residuals follow the final writing credit that the guild determines, so an uncredited rewrite earns nothing on reuse, and shared credit means shared residuals.

The structure mirrors the actors' contract — fixed payments for reruns, percentage payments in supplemental markets — with the WGA's own rates. Writers fought two of the biggest labor battles in modern Hollywood over them: the 2007–08 strike won residuals for content distributed online, and the 2023 strike won a bonus tied to viewership for the most-watched programs on subscription streaming services.

Directors follow a parallel system under the DGA contract.

Why streaming changed residuals

The old system assumed a show earned money market by market: network run, then syndication, then home video, each triggering a payment. Streaming collapses that chain. A series made for a subscription platform may never be resold anywhere.

For years streaming residuals were paid as a fixed annual amount based on the platform's subscriber size, regardless of whether a show was a global hit or barely watched. The 2023 WGA and SAG-AFTRA contracts added bonuses for high-viewership shows, the first time residuals took audience size into account.

Residuals vs. royalties and backend

Royalties come from owning a piece of a copyright — a novelist's share of book sales, a songwriter's publishing income. Backend (profit participation) is a negotiated share of a film's revenue or profits, written into an individual deal and usually reserved for above-the-line talent with leverage.

Residuals are neither. Actors, writers and directors under guild contracts usually do not own the film, and they do not have to negotiate anything: the guild minimums guarantee the payment whether the film is a hit or a flop. A film that loses money at the box office still owes residuals when it plays on cable.

What residuals mean for your production

If you sign a guild agreement — even a low-budget SAG-AFTRA agreement for an independent feature — residuals become part of the long-term cost of the film. Producers often post a security deposit before cameras roll, and every distributor will ask how residuals are handled. Non-union productions pay no residuals unless a contract says so; the cast is usually paid a one-time buyout.

In FlashBoards, keep the business map beside the creative one: the cast board with each performer's union status and agreement noted, and a corner listing every market you plan to sell into, so reuse costs are visible while you plan. More on the business side is in the film industry hub.

Further reading

SAG-AFTRA, residuals information for members (sagaftra.org) · Writers Guild of America West, Schedule of Minimums and residuals guides (wga.org) · Harold L. Vogel, Entertainment Industry Economics (Cambridge University Press)