I had lunch with my brother the other day and he was asking me about the strike. His question was one that I’ve heard a great many times as talks of this strike have gone on:
Why do writer’s get residuals anyway?
It’s simple: The movie industry, along with music, literature, and a few others, are unique industries.
I currently work in the graphic design industry. A company wants something designed, I design it. They pay me once and use it to promote their products. Their products sale and they make money and therefore it’s worth it for them to pay me for my work.
In the movie industry, a studio wants to make a movie, I write the script. They pay me and they make their movie. And here is where things change. Once they make the movie, they show it in theaters. They make money. Then they sell it on DVD. They make money. Then they sell the rights to cable. They make money. Then they sell it as downloads on the internet. They make money. Then they repackage the DVD and sell it as a special edition. They make money.
To steal an example from Craig Mazin’s artfulwriter.com blog, think of it as if you had a cake that provided never ending slices, that is, you could sell a slice of cake and it would immediately replenish itself so you could sell the same slice again and again and again… you should make money every time that slice sells.
It’s the same thing with books and music. Every time an artist sells a CD, they get a percentage. Every time an author sells a book, they get a percentage. This also makes it possible for record labels, publishing companies, and movie studios to be able to afford making these forms of entertainment. You never know if something is going to be a smash hit, so you can’t pay everyone a million bucks up front.
But you can promise your creators residuals, so that if the companies make money, the artists do as well.