The Use Case

(6-minute read)

The issue of residual payments made news headlines last summer during 2023 negotiations between SAG-AFTRA and the Alliance of Motion Picture and Television Producers (AMPTP) and was one of the reasons that contributed to the union’s decision to call a strike.

A key sticking point in negotiations was U.S. studios’ refusal to update an outdated residual payment model for the Use of SAG-AFTRA members’ performances on streaming services.

Residual payments are not new to the film and television industry. In fact, they date back to the 1930s when radio Performers were paid a residual for their audio recording on “transcription disc” technology, which were sent to radio stations that were not connected to the live network and, later, to time-delayed radio broadcasts on the west coast. The same payments later applied to live television broadcasts.

In 1952, the Screen Actors Guild (now the SAG in SAG-AFTRA) was the first union to successfully negotiate residuals for TV program re-runs. Residual payments to ACTRA members date back to the early 1950s as well when they were negotiated into the union’s first collective agreement – the CBC Radio Agreement.

Despite having such a long history both within our union and industry, why do residuals matter so much?

The simplest and most important reason is: Performers don’t work for free. Residuals are an important part of the production eco-system that guarantee Performers share in the revenues when a production is sold/exploited in a new market.

As a precarious worker, residuals can also help contribute to a Performer’s income, especially in years when their performance income fluctuates.

As the original gig worker, many Performers supplement their income through a variety of performance gigs throughout the year combined with jobs in other industries to make ends meet. Residual payments offer an additional, and sometimes unexpected, revenue stream.

Sidebar: learn more about residuals and how they work in Canada in this IPA 101: Residuals.

Residual – or Use fee – payments became a central issue in ACTRA’s own 2007 strike against Canadian producers who were refusing to pay Performers for Use in digital productions. Internet streaming was still relatively new in 2007 and, as we have seen before, producers and studio executives again used the absence of an existing monetization model to renegotiate creators’ compensation.

ACTRA’s position during 2006 negotiations was clear: because ACTRA Performers’ likeness and work were generating new profits, Performers should get a share of them.

What we heard from the other side was eerily familiar to what SAG-AFTRA Performers heard from U.S. studios ahead of their 2023 strike: “ACTRA is unrealistic in its current contract at a time when budgets are tight and competition is fierce.”

Then-ACTRA National President and ACTRA Toronto member Richard Hardacre knew what was at stake in the 2006 IPA negotiations: “we needed to achieve certainty about the ownership of rights to our performances as our recorded work migrates into the uncharted galaxy of distribution on new media platforms and, massively, over the internet. We contended that we had to be paid for this ‘new’ use of the intellectual property created with our performances.”

And ACTRA members stood strong in solidarity.

Thankfully the first and only strike in our union’s history came to an end after six weeks – on the night of February 19, 2007 – when ACTRA reached terms of settlement of the Independent Production Agreement (IPA) with the associations representing the Canadian producers.

ACTRA became the first union in the world to secure Internet and new media compensation terms, which set the stage for professional film and television Performers globally.

Here we are almost 20 years later and the issue of residuals for Internet Use has taken centre stage once again.

The difference now is that ‘new media’ is no longer new. It has become a mainstay in our everyday lives. The number of paid streaming services in the U.S. and Canadian markets jumped from approximately four in 2007 to 30 today while FAST (Free Ad-Supported Television) streamers have grown from one to 15 in the same period.

We are living in the age of streaming as Canadians’ television viewing habits continue to shift toward streaming platforms at the expense of traditional cable and satellite subscriptions. At the end of 2023, 42 per cent of Canadian households did not have a TV subscription with a traditional provider (an increase of 2.6 per cent from the previous year) while more than 80 per cent of Canadian households subscribe to a streaming service.^[1]

FAST viewership in Canada is also growing with nearly half (49 per cent) of streamers using a FAST streaming service and FAST viewing now accounting for 26 per cent of total TV viewing time.^[2]

What’s more, FAST channels are almost exclusively built with acquired content (i.e. re-runs), which accounts for a staggering 60 per cent of FAST streaming viewing.^[3]

Streamers are also finding ways to reach new audiences to grow their subscriber base – through bundle packages, media partnerships (the NBA added NBC/Peacock and Amazon Prime Video as media partners in July 2024 and dropped broadcaster TNT, which had been televising games since 1988), plus an explosion of new content (both original and acquired) to keep up with demand.

Yet what has stayed the same? Despite this revolution in the way Performers’ work is distributed and consumed, the way Performers are compensated for the Use of their work remains tied to an old business model. Performers are still getting paid residuals for Internet Use under a model that was created decades ago, based on usage windows and distribution platforms that have either changed unrecognizably or disappeared altogether.

It’s time to change that.

While we face many new challenges in this round of bargaining, the stakes are just as high and the principle uniting ACTRA members remains the same: Performers don’t work for free.

Up the down stream (payment)

Multi-billion-dollar corporations have grown into the corporate behemoths we see today thanks to the hard work and vision of the global creative class. While these international conglomerates have profited off the work of creators, it’s the creative class that struggles to make ends meet. It’s time to recognize the contributions of the creative class by paying them what they’re worth.