How Raising TV's Flat-Rate Residuals Could Backfire
One of the WGA's demands is rife with possible unintended consequences
This is the second of two columns analyzing pressing issues around the WGA negotiations with the Alliance of Motion Picture & Television Producers (AMPTP). Yesterday’s was about the urgent need for ratings transparency. Both are for paid subscribers only.
In a recent article declaring the winners and losers of 2022, I wrote this:
“No, seriously, WGA and other guilds: demand weekly ratings from the streamers! It will help claw back residuals by making this data public!”
An executive reader (i.e., a “suit”) pushed back, telling me that “a common misconception is that they don't get residuals for streaming or that the residuals aren't good. Neither is true.” They actually blamed these residuals for the new “un-order” trend I wrote about recently.
Many writers have told The Ankler that residuals had been “effectively abolished.” Indeed, I strongly hinted at the role of residuals in my article on un-orders, though I didn’t dive deep into the specifics. So let’s do that today.
After looking at the data — in this case, actually researching and analyzing the WGA residuals calculations — I agree that many writers are struggling, but simply increasing streaming residuals for streaming won’t solve this problem…
…it might make it worse!
If I were the WGA in the upcoming negotiations, I would shift away from a flat-rate residual. If structured properly, a new incentives-based flat-rate system could increase pay for all writers while keeping more TV series on streaming platforms. In this article, I will...
Tell you how HBO Max’s lowered estimate of subscribers also lowered its residual payments
Look at the economics of this formula and its impact on both writers and the entertainment companies
Explore some of the potential adverse impacts this system could cause
Suggest a new way to structure residuals based on performance