By Larry Iser and Chad Fitzgerald of Kinsella Weitzman Iser Kump & Aldisert
Before 1960, the creators of feature films – the writers, directors, and actors – worked under a “one and done” system. They were paid once for their work and were never paid again. After a film left the theaters, the studios subsequently showed it on network television, cable, and pay-per view, and eventually released it on home video, reaping enormous profits from these repeat showings of the film, profits in which the talent were never able to share. While the major talent unions – the Screen Actors Guild (SAG), the Directors Guild of America (DGA), and the Writers Guild of America (WGA) – made inroads in the 1950s in allowing their members to share in profits from repeats of television programs, Hollywood film studios steadfastly resisted any attempt to allow guild members to be paid for reuse of feature films.
The issue came to a head during contract renegotiations between the studios and the guilds in 1960, and after a five week strike by the guilds, the studios relented and agreed to pay “residuals” to talent on all films made from 1960 on. Residuals – compensation paid to a creator or performer of a motion picture or television work for use of the work after its initial release or airing – are now a major financial component of the entertainment industry and a major source of income for writers, actors, and directors.