Residuals - Who Needs Them?
by Paul Petersen

“A successful commercial may run on Cable up to 5,000 times. A solid effort on Network television may find a commercial running 2,000 times. Keep that in mind.”

Why should Actors get paid every time a commercial is shown when they only work one or two days on a commercial shoot? I mean, really, the Producers are offering almost $4,200.00 for those two days. Isn’t that enough?

Do the math. A hot commercial runs on both Cable and Network, saturating the country with its message. That’s the point. An ineffective commercial is taken off the air before you know it. An effective commercial is one that sells product (which is, remember, something both advertisers and corporations can track in daily sales) has a very long shelf life and only disappears when it’s impact wanes.

The “Talent” you see performing in commercials are really just the tip of the very large iceberg. Advertising campaigns are created, and a whole series of events take place before actors are cast in their roles. First comes the idea, then the approval. Then comes budgeting, writing, storyboarding and casting. Then the commercial has to be shot, and edited. Broadcast time has to be purchased. Remember what the actor’s role is. They become, in effect, Spokespersons for the corporation whose wares they are hawking. They become identified with the product. If you are tied to Pepsi you will not be asked to do Coca Cola…or any other soft drink. That’s called “exclusivity.”

“Intellectual property rights” have a long history. “Performance rights” have a long history, too. We accept the principle that the person who invents a new widget has an on-going right to be fairly compensated for their work product. That’s what patents and copyrights are all about. “Licensing Agreements” are a fact of life. What is an Actor’s performance but a creative invention, licensed to the producer? The other name for residuals is royalties, a familiar term in the world of music where producers, writers and performers are paid a set percentage based on sales. Interestingly, performers are not paid for “air play” as are writers and producers, but that’s another essay.

All of these terms…residuals, royalties, licensing and performance rights…are a recognition that in this era of mass culture where performances are duplicated and rebroadcast and never go away, those who create these commercial products have a right to compensation. Actors, too. Especially actors. In the end, they are the ones on the firing line. Everybody else in the production chain is invisible on a commercial. There are no Credits. The Actor is the one who is visible, for good or ill.

It was this compelling reality that led to residuals in the first place. The “pay-for-play” formula had to be won on the picket line. The Ad agencies didn’t just come up with the idea for residuals on their own. Actors and their unions had to fight for royalties.

The imperatives of Business never change. “Pay as little as you can for as long as you can get away with it.”

There is a popular myth that a fair contract makes everyone happy. Nonsense. A good contract makes everyone equally unhappy. One side doesn’t get what it thinks it should, and the other side feels like it is paying too much. Welcome to reality.

Let me tell you how an Actor sees the world of commercial production. For any given commercial there is this thing called “The Interview Process.” Unless you’ve been there you’ll never understand what it is like to be one of 100 people vying for the same job. Think about that. 100 professional performers competing for a single job. Each one of those actors will put their heart and soul into their audition. That’s 100 FREE performances. Performances, mind you, which are usually taped, then weighed and judged by some invisible Yuppie in New York before the final casting selection is made. The very best commercial performers will tell you that they go out on 25 interviews for every job they book. Twenty-Five Interviews for One Job.

Again, do the Math. 25 interviews times 100 applicants comes to 2,500 free performances. Now divide that $4,200 “Flat Fee” offer from the Producers by the actual number of performances that went into the final product. Divide that number by 7,000 potential broadcasts and you’ll understand why the actor’s unions are on strike.

Even at today’s pay rates Actors represent less than two percent (2%) of the cost of a commercial. Commercial Producers want to reduce even that two percent until the Performer’s percentage of costs…the labor cost of the person you actually see…becomes nothing more than a negligible part of the total package.

That’s what the world of Business really thinks of actors. What’s amazing is that they do this to Kids, too. I want you to keep in mind the above math lesson while I tell you about the scene one day at West Side Casting where commercial interviews were taking place to cast three different commercials. One Thousand, Seven Hundred kids came out for these three auditions. Each kid came with a Parent/Guardian. That’s 3,400 people trying out for three jobs. Let’s play the numbers game again; this time figuring in the time expended by the applicants multiplied by the minimum of three hours each person gave away in pursuit of these jobs. Forget the free performances the kids delivered. We’re talking 10,200 man-hours for three commercials that may or may not be successful. Let’s be generous and say that each commercial runs for two full 13 week cycles and pays the lucky three actors $20,000.00, or Sixty Grand altogether.

That comes to $5.88 per hour. Minimum wage.
Now do you Get It? Put those three commercials together at the Flat Fee rate of Forty-Two Hundred bucks and divide that by 10,200 man-hours if you want to know what the Commercial Producers are really offering.

$1.23 per hour. That’s how young professional actors and their parents see things…if they know anything at all about Show Business. Or put another way, if the Producer’s Flat Fee offer is divided by the potential of 7,000 broadcasts (Network and Cable) you end up with a number like this: Sixty cents to the performer every time their image is broadcast.

That’s for a successful commercial!

Non-Union performers, who are thinking this Strike is their golden opportunity to finally land that big commercial, beware of what you wish for. It might just come true.

French Revolution, anyone?