How residuals work

Craig and John take a look at awards-season screeners before diving deep into a discussion of how residuals work and why they’re so important to screenwriters. Plus, a visit from Craig’s cleaning lady, who thinks he’s insane. Near the end of our discussion on residuals, I give some actual numbers on an actual movie. Percentages are abstract; money is money. I chose Go because I had the most data on it, going back to 1999. It’s also useful because the movie was only moderately successful at the box office. As you can see in the charts below, residuals taper off over the years — but that long tail still adds up: Keep in mind, there’s a possibility that residuals could spike if another home video medium takes off — digital downloads or rentals, for example. I went into the podcast thinking I could easily reverse the math to figure out how much the studio has made off the movie, but as Craig points out, it’s more complicated than it appears at first. Most home video is calculated as 1.5% of 20% of gross earnings, so in order to get an accurate number I would need to sort out how much of Go’s residuals are coming from home video (and not television licensing). But we can still get a sense of minimums: Go brought in at least $30 million in the aftermarket, and likely much, much more. LINKS: Downton Abbey, Season One on Netflix Father Ted on Netflix Security theater as defined on Wikipedia The WGA’s Residuals Survival Guide Intro: Tree Top Apple Juice commercial Outro: Country Lane by Telekinesis You can download the episode here: AAC. UPDATE 11-30-11: The transcript of this episode can be found here.The post How residuals work first appeared on John August.