tag:blogger.com,1999:blog-3829599.post2530223478964831575..comments2024-01-28T00:20:40.933-08:00Comments on Agoraphilia: Residual Thoughts on the Writers' StrikeUnknownnoreply@blogger.comBlogger10125tag:blogger.com,1999:blog-3829599.post-66017935047880898572007-12-01T14:53:00.000-08:002007-12-01T14:53:00.000-08:00I assumed that writing contracts offered royalties...I assumed that writing contracts offered royalties for the same reason that oil and gas development deals pay royalties. Hard to know just how much of a resource there is to develop - it can't be judged completely ex ante - so it allows the seller and buyer to share some of the risks.<BR/><BR/>Presumably, the studio is in a better position to manage risks than writers, so maybe the risk sharing explanation doesn't satisfy.<BR/><BR/>My second thought is that it reduces negotiation costs that would otherwise stymie many deals. Writer thinks his work is worth its weight in platinum, studio says "tin." They settle on giving the writer a nickel for every dollar of sales, which turns out to be on the platinum side if the writer is correct, and closer to tin if it is a dog.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-61149769030295108192007-11-30T10:50:00.000-08:002007-11-30T10:50:00.000-08:00Residuals may provide an added safeguard for child...Residuals may provide an added safeguard for child actors. Jackie Coogan's fortune earned as a child star was wasted on drugs by his parents, even though he was successful later in life as Uncle Fester on TV. Laws were passed in the 30's in California to prevent a recurrence of this type of theft, but it still happens. Witness the case of Gary Coleman whose parents took advantage of his millions supposedly leaving Gary close to broke. My guess is that he still gets residual checks, which is a good thing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-31101266131600418892007-11-27T21:12:00.000-08:002007-11-27T21:12:00.000-08:00Very interesting post. "...they will invest less e...Very interesting post. <BR/><BR/>"...they will invest less effort in promotion than they otherwise would"<BR/>Might less promotion be a good thing, considering that producers don't pay the costs that promotion imposes on whoever they might beat out as a result? (Asuming the advertising game is zero-sum, which it probably isn't, but.)Dr. Zeusshttps://www.blogger.com/profile/17604250204753682276noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-14074959810557407872007-11-26T13:00:00.000-08:002007-11-26T13:00:00.000-08:00An obvious reason for a lump sum payment is that i...An obvious reason for a lump sum payment is that it reduces monitoring costs, particularly when the residuals consist of a share of profits, or even revenues less marketing costs. <BR/>The countering argument is that it puts artists in the estimation business in order to calculate a fair market value, which they probably aren't as good at as their corporate overlords.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-51042773910273271682007-11-26T11:23:00.000-08:002007-11-26T11:23:00.000-08:00I was thinking about this exact thing this morning...I was thinking about this exact thing this morning, and I think a reason that producers would favor residuals is that it gives the writers an incentive to write something that will be commercially successful instead of "artistic." They would have to write something that actually sold instead of just convincing producers that it would sell. This would seem to put actual writers and producers on exactly the wrong side of the argument though, so I suspect I'm missing something.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-8396331800516974612007-11-22T10:46:00.000-08:002007-11-22T10:46:00.000-08:00Jadagul -- I agree, I think that's one of the "can...Jadagul -- I agree, I think that's one of the "can't be stated aloud" arguments. It sorta makes sense, except that an uncertain revenue stream doesn't make a very good savings plan. Also, if that were the real concern, the guild itself could allow, or even require, its members to contribute part of their up-front payments to some kind of personal unemployment fund.<BR/><BR/>Tim and Ran -- To clarify, what the guild does is set a "guild minimum," which covers both up-front payments and residuals. Writers are free to negotiate higher-paid contracts, as long as both minimums are respected. Also, writers can be added as producers; that's another way to give them a piece of the revenue stream. So while it's true that some big names might prefer to have the residuals, a guild minimum without them would not prevent such arrangements. The minimum is most relevant to people at the low end, who are analogous to the book writers Tim says get paid by flat fee.Glen Whitmanhttps://www.blogger.com/profile/01425907466575991113noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-7093110548034192832007-11-22T02:14:00.000-08:002007-11-22T02:14:00.000-08:00If there's a standard contract for writers (and it...If there's a standard contract for writers (and it seems like you're saying there is?), then it seems that residuals are the only way for this to work, since obviously different writers deserve different compensation based on how much expected benefit their participation brings to a project (whether through their skill, or simply through name recognition), and a standard per-project up-front couldn't take this into account.<BR/><BR/>Put another way, the expected present value of the stream of residuals depends on the writer (and for that matter on the project), and therefore option (b) cannot be achieved by a standard contract.Ranhttps://www.blogger.com/profile/01369980917358096502noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-54730751986985714802007-11-22T02:01:00.000-08:002007-11-22T02:01:00.000-08:00One possible route of enquiry is to look at where ...One possible route of enquiry is to look at where writing contracts are in fact lump sums.<BR/><BR/>A lot of newspaper Op/Eds for example, or ghostwriting of books (in the latter, a flat fee is paid to the writer, the celebrity taking the royalty risk).<BR/><BR/>There's also a whole lot of low end book writing work that operates on a flat fee structure.<BR/><BR/>Certainly, from my point of view, as someone who works as a writer at the intersection of these two models (some work is flat fee, some is advance and royalty based) the general perception in the industry is that royalty based is more desirable. Indeed, you need to have something of a "name" or an amazing product before you're actually offered royalties.Tim Worstallhttps://www.blogger.com/profile/13161727860817121071noreply@blogger.comtag:blogger.com,1999:blog-3829599.post-26656551657034021752007-11-21T19:15:00.000-08:002007-11-21T19:15:00.000-08:00This was a very interesting and thoughtful post of...This was a very interesting and thoughtful post of yours. I like your lump sum idea, and I can't see why it shouldn't be a viable option. I can imagine though that for productions on a tight budget, producers/investors may prefer the residual method of compensation to avoid having to shell out the extra money upfront.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3829599.post-90492206770592133782007-11-21T15:45:00.000-08:002007-11-21T15:45:00.000-08:00There's an argument I've heard a lot that can't be...There's an argument I've heard a lot that can't be made explicitly, but seems implicit in a lot of what people are saying. Specifically, I've heard a few times that "Writers go for long spells without getting any new jobs, and residuals guarantee that they have some sort of income until the next contract."<BR/><BR/>The implicit argument here is that writers are very bad at projecting future income, and bad at disciplining themselves to err on the safe side of their savings rates. So if all payments to writers are lump-sum, they'll overspend and then have periods of no income and no savings. The residuals model forces them to take some of their compensation as deferred income, and thus guarantees that the writers will always have some sort of resources.<BR/><BR/>Also, no matter how we say that it acts as risk reduction, a lot of people think it seems incredibly unfair that the writer of a hit show doesn't make tons of money, even if it's because he's insured against having a bomb that makes him nothing.Jadagulhttps://www.blogger.com/profile/01638430331326586502noreply@blogger.com