History of Residuals
The DGA has a long history of negotiating and enforcing new and evolving residuals provisions to benefit its members. Each new means of exhibition has required the negotiation of appropriate residual compensation, beginning with the advent of radio replays and continuing with each subsequent development; first broadcast television, then home video, pay television, basic cable, and various forms of “new media.” As the entertainment industry changes and new distribution platforms continue to emerge and develop, the DGA will continue to negotiate effective and financially rewarding residuals formulas to properly compensate members for the reuse of their work.
The concept of compensation to authors for reuse of their work was first established in Europe in the 19th century. Residuals in the United States began in the early days of live radio, when actors and musicians had to perform twice: once for the Eastern time zone and again three hours later for the Pacific time zone. With the advent of recording technology, the networks would record the first performance and simply replay it later. The talent guilds successfully demanded that their members receive compensation for those rebroadcasts.
The DGA, along with the other talent guilds, negotiated residuals for domestic reuse of television programs by the mid-1950s. 1961 saw the first DGA residuals for feature films shown on free television and 1968 ushered in residuals for foreign reuse of television programs. In 1971, the Guild negotiated the first payments for videocassettes and pay television reuse. The DGA negotiated the made-for-pay TV residuals formula in 1981, the reuse on basic cable formula in 1984, and the residuals formula for high-budget basic cable dramatic programs in 1989.
Exploitation in new media was first addressed in 2002, with the negotiation of a sideletter covering pay-per-view and subscription exhibition via the Internet. In 2008, the DGA negotiated formulas for electronic sell-through, ad-supported streaming, and the reuse of made for new media productions. In 2014, the Guild established a new formula for high budget dramatic made-for-SVOD programs, and then negotiated an unprecedented improvement to that formula just three years later.
Over the past 60 years, the residuals formulas negotiated by the DGA have proven to be a robust and significant financial benefit for DGA members. As the entertainment industry continues to shift and evolve, the Guild will continue to enforce and improve existing formulas and negotiate new ones to ensure residuals keep pace with changes in distribution methods, platforms, and consumer behavior.