What Were Residuals, Daddy?

I don't expect a lot of popular support for the Writers Guild strike. (I don't expect most people to care one way or the other. Most people have problems of their own, and things to do, and Call of Duty 4: Modern Warfare isn't going to play itself. (Or is it?))

Luckily, this isn't about popular support. It's collective bargaining, not a straw poll.

If we writers do want more support, though, we should probably do a better job of explaining what a residual is. (If only to demonstrate our skills as professional communicators.)

A residual is a deferred payment against the lifetime value of a script.

It's not a bonus.

That's why it's called a "residual." The word means "left over." It's the left over part of the compensation the author agrees to wait for. It's not money for nothing. The word for that is "commission."

A residual isn't a handout or an allowance or Paris Hilton's trust fund. It's not a lottery payout, or alimony, or an annuity from a slip and fall accident at a casino.

A residual is a deferred payment against the lifetime value of a script.

It's not a perk.

It's okay if you didn't know that. It's in the best interests of a lot of fairly large corporations that you don't. And it makes it easier to imagine that writers are asking for something workers don't deserve.

Here's an actual "comment" I got last week, from an actual "commenter" just like you:

"When an engineer develops a product for a company should the engineer receive compensation each time the company figures out a new market for the product or a new application for the product (?)"

This is a fair question, but it employs a truly dunderheaded example. An engineer does receive additional compensation when a company finds a new application for the product he created. This is called "owning a patent."

(I don't think even Rupert Murdoch wants to get rid of patents. Well, not yet.)

"When the product loses money for the company should the engineer give back his salary?"

Of course not. Because his product always retains its potential to create revenue. The capital gets used up. The idea isn't unthought. But now I'm nitpicking at an analogy that doesn't apply in the first place.

"When a writer is paid for work on a show for the network that not only doesn't make money for the network on the Internet but doesn't make money for the network period, should the writer give back his pay to the network (?)"

I appreciate that this is a rhetorical question. But it's ineffective, rhetorically, because the answer is no.

The writer did her part. She wrote the episode. And in doing that, she created a product with a potential value, which is infinite. (Or, in the case of Seinfeld even more than that.) Because the episode can be shown an infinite number of times. (Or in the case of Seinfeld, even more than that.)

Yes, and you're already saying, "But Seinfeld isn't your typical, run-of-the-mill sitcom. That's Two and Half Men." And I'm saying -- rudely, over you -- that I know it's not typical -- but I'm trying to explain that, technically, the potential value of a sit om -- any sitcom -- is infinite. I'm just using Seinfeld, because that's the example the New York Times would use.

(The potential number of New York Times references to Seinfeld: Another good illustration of infinity.)

An episode of a television show can produce revenue forever.

Yes, most TV shows aren't Seinfeld. But each of the 180 episodes of Seinfeld -- a show that started without bankable stars or a high concept -- will make about ten million dollars in syndication. In real economic terms, every sitcom could be Seinfeld when the writer commences work.

(Unless it has Nathan Lane in it.)

What should a writer charge, then, for a script that could make $10 million dollars?

A: I dunno. Nine million dollars? Gotta leave something for the actors.

But what's a fair price to charge up front?

A: Right now, we'll take $19,125.

If it's a hit, you can pay us the rest later. I know! We'll call it a residual!

Because writers understand that most shows aren't hits. Most shows lose all the studio's money and go straight down the toilet, like John Ridley's Barbershop.

That's why, for decades and decades, the system has been that the writers take far less than they should be paid for a hit show, because there's no way of knowing if the show will be a hit or not. This is the "residual" difference in its value. If the show doesn't succeed -- for whatever reason (Nathan Lane) -- we don't get the rest of our money.

We take far less than our labor is demonstrably potentially worth on the understanding that most shows fail. Because we like what we do.

But it's the opposite of cheating anyone.

Anyway, I'd be happy to give up my residuals. And not just for syndication and DVDs, but for downloads and streaming video, too. The studios are right; who knows if this crazy Internet thing will last? All I want, in return, is an up front payment of nine million dollars per teleplay.

Short of that, all I want is for people to understand one thing:

A residual is a deferred payment against the lifetime value of a script.



Terrific people I idolize worked on Barbershop.



That crack about "commission" being for nothing. That's just a joke, Ted.


Not a Correction, But Added Later Nonetheless:

Yes, living on this planet as I do, I understand that engineers can assign their patents to the corporations that employ them. They can also give them to strangers on the street, or mail them to fickle prostitutes like a piece of Van Gogh's ear.

Some engineers assign their patents. Some don't. Some children work in mills. That doesn't make it their place in the divine order of things. Or even their legal obligation. Except at The Gap.


Read more thoughts about the strike on Huffington Post's writers' strike opinion page