THE CASE FOR COMMERCIAL RESIDUALS - by William Joseph Hill

 

 

 

 

If you're an actor like me, you've probably noticed a new trend that's been going on with the online casting sites--the proliferation of non-union commercials. Some of these commercials are actually for some pretty big companies. Some of these spots are for some pretty hefty and tempting buyouts, most are for a paltry session fee only, and some even have the audacity to offer only copy, credit, meals!

Whether you're a SAG actor or nonunion, you need to seriously take a look at this trend and be very, very afraid. If you've been in this business since the 20th Century, then you understand completely what I'm talking about. But some of you newer performers need to really take a hard look at the economics.

First, let me give you a little history. Back in the great commercial heyday of the 1970s, 80s, and even the 90s, it was possible for you to book a Class A National commercial which played in the three major markets of the U.S.: New York, Chicago, and L.A. Most likely it played all over the country as well, but to qualify for Class A, you had to hit those 3 main markets. The money that you could make off of one spot (thanks to Residuals) would buy you a brand new car and still have money left over to put in the bank. Book a few nationals, and you could buy a house!

Now I'm not saying that Class A commercials don't exist any more; there are definitely national commercials. But the money has greatly eroded. It doesn't take a CPA to notice this downward trend. I know of several actors who've booked quite a few nationals over recent years, and they're still having trouble making their rent!

Now these are SAG commercials I'm talking about, not nonunion spots. Why has the money disappeared? Well, for one thing, companies are offering lower and lower buyouts for the SAG spots that they actually do produce. The commercials strike of 2000 taught advertisers that you could produce spots cheaper if you went non union and cast "real people", ie. their employees instead of actors. Add the proliferation of reality TV, and all of a sudden, clients want "real people, not actors".

Also, we have TiVo and other DVR machines to thank for the disappearing money. This technology which allows people to skip over commercials completely has de-motivated advertisers from spending lots of money on their TV budgets.

So, for the spots that actually go SAG, they either offer a few thousand dollars for a buyout, or go "wild", meaning they only are used in a few markets, enough to get the advertising message out there to a wide audience, but still small enough to keep from classifying as Class A. Suddenly, the non-union buyouts look a lot more attractive.

There's also a growing movement in the producing and advertising community that thinks paying residuals is like paying someone multiple times for one job. Why should actors keep getting money, if they only worked 1 or 2 days?

Well, there's this thing called "A Person's Likeness and Image" that differentiates actors from all other types of employees. When you punch in at your day job, you're not having your face and voice broadcast all over the country (or even the world) round the clock, in places that you physically can't be present. An actor's image and likeness is not only what makes them unique, it is their main selling point (and why some actors command millions of dollars over others).

You know how you get burned out with a song? How sometimes you've seen a movie so many times that you get sick of it? And I'm sure by now everyone is sick of seeing the "Jersey Shore" cast. Well, the same goes with actors (and not just in commercials). It's called "overexposure". An actors image and likeness can only go so far before an advertiser needs to do a new spot. In the world of commercials, an actor who does a commercial for Toyota cannot do a competing commercial for Ford not only while the Toyota spot is running, but often times they have to wait several months to years until advertisers are willing to hire them for other auto spots.

There's this thing called "exclusivity", and actors are paid residuals in order to fairly compensate them. Every time an actor's image and likeness is used to sell a product, the company is profiting. Thus, residuals become the only means by which an actor can be equitably paid. Now in the case of very generous buyouts (ie. $10,000), the advertiser is pre-paying for the exclusivity. But for the most part, when the actor films the spot, they're paid a small session fee, usually commercial scale plus 10% for the agent. The rest of their payment is in the form of residuals.

If we didn't have residuals, and even if the "exclusivity" clause was lifted off of commercial contracts, an actor wouldn't be able to make enough money in commercials to justify all of the money spent pursuing them. Even if an actor was free to act in competing commercials running at the same time, there's no rule that says competing advertisers have to hire the same actor. And trust me, they won't. Without residuals, the actor is reduced to working only once or twice a year for a three-figure session fee.

Most actors who work in commercials rely on the income they earn to help them afford things that invest in their careers. Classes, photos, reels, workshops, along with all of the mileage they put on their cars having to drive all over town several times a week to audition--the only way this madness makes economic sense is if the financial rewards are worth it. Considering that an actor's agent will only get 10%, the agent wouldn't even be able to afford to stay in business if their commission only amounted to drinks and hors d'oeuvres at happy hour!

If residuals disappear, then professional actors will cease to pursue commercials, which will make the overall quality of advertising suck. If you don't believe me, just check out any local TV spot advertising a small business. We all make fun of those cheesy "Crazy Eddie's TV Emporium" spots.

Now, there's this thing called Web advertising that completely illustrates my point. For the most part, web-only commercials that use "actors" are horribly performed, and royally suck. That's just my opinion, but most people I know agree with me. (Don't believe me? Then check out any of those stupid "dancing idiot ads promoting "Get your degree!" in the right hand margin of your Hotmail.) The only successful web ads are the ones that take a TV spot and re-cut it for the Internet.

So in essence, Residuals are good for everyone. They give actors an incentive to spend countless hours of time and energy pursuing this specific career. They give agents an incentive to hustle and bust their butts getting their clients out to the many commercial auditions that happen on a daily basis in the major markets. And they give advertisers a quality message, knowing that the performers they are using in their spots are highly motivated, and professional. For advertisers, that could mean the difference between a Clio or a "Golden Turkey".