This is the third in the Screen Actors Guild’s 2008 contract reports about issues. Report #1 discusses middle-income actors and #2 talks about New Media (at end of post), and now #3 explores residuals below:

SAG CONTRACT 2008 REPORT
Number 3 – Residuals
April 25, 2008

The following update represents only a portion of our proposal priorities. We will be updating you about other proposal priorities in the coming days. SAG and the AMPTP have been meeting since negotiations began more than a week ago. On April 23, the parties agreed to extend the bargaining session and continue negotiations through the week of April 28. Our proposals address many critical issues confronting SAG actors. Below is information on the important topic of residuals.

Why are Residuals Important To Actors?
Residuals are critical to an actor’s ability to make a living. As a deferred payment for the use or reuse of an actor’s work, residuals are paid on a time cycle that allows many actors to receive income on a reliable basis. Residuals accounted for 53% of all pensionable principal earnings for middle-class actors under the TV and Theatrical Contracts in 2007. Changes in industry business models – like declining network repeats and increased online streaming — and reality shows– mean declining network residuals payments. Getting fair residuals formulas in new media, DVD’s and other markets is a priority for the Guild.

What is the state of affairs in residuals?
• Real earnings are on the decline with average inflation-adjusted residual earnings decreasing 7% over the last 5 years. This has contributed to a negative annual growth rate in real aggregate earnings to actors over recent years. So, if it feels like you’re making less, it’s because you are.
• Primetime repeats are down 25.1% the last two television seasons resulting in fewer residual payments to actors.
• Total home entertainment consumer spending (rental and sell-through) is projected to top $31 billion in 2012, up from $23.4 billion in 2007.
• The DVD market is forecast to remain viable for years to come, partly because of projected growth in the BLU-Ray segment.
• Some series are streaming all episodes produced on ad-supported formats.

Here’s what we are asking for:
1. Reasonable residuals for actors’ work released to DVD and home video.
2. Reasonable residuals for content made for new media.
3. Reasonable residuals for content moved over to new media platforms from traditional media.
4. Reasonable residuals for made-for new media programs released in traditional media.
5. A sustainable residuals structure that ensures working actors can maintain a middle class income, and represents an appropriate share of the value contributed by actors.

Please note that the above information is not intended to be an exhaustive list of our proposals. It is simply intended to keep you informed. We will keep you apprised of developments as the negotiation process continues. Check SAG 24/7 website at www.sag.org. Watch for Contract 2008 Report No. 4 coming soon.

Editor-in-Chief Nikki Finke - tip her here.