Movie Industry: Live By Royalties, Die By Royalties

from the funny-how-that-works-out dept

One of the things that has always been part of the problem with the entertainment industry’s business model is the idea that any time any of its content is used for anything, the industry needs to get paid. Most of the rest of the world works in a work-for-hire world. You get paid to do a job and then you’re done. The factory worker gets his salary and doesn’t make extra royalties every time one of the widgets he builds is sold or resold. Otherwise, you get weird situations with people whining that they need to keep getting paid for work they did 50 years ago. Of course, if you’re from the entertainment industry (and I can already hear you readying your replies), you insist that this is how it must be done — despite plenty of evidence that it need not be done this way (and that doing it that way can limit the potential market for the content). Apparently, however, the movie studios disagree with you. Well, partly. They agree that’s how it must be done when they’re getting paid money. So every time a movie is being shown or sold, you better believe the studios want their cut. However, the studios feels quite differently when they have to pay money out. That’s why they’re trying to negotiate residuals out of the new writers’ contract. That’s right. Suddenly, the movie industry that insists it must get paid for every possible use of a movie, doesn’t think it makes sense to pay the writer after the initial set fee for writing the movie. It actually makes much more economic sense for the writers to be paid a straight fee with no residuals — but it’s a bit hypocritical for the Hollywood studios to claim it makes sense when it benefits them and doesn’t when it costs them.

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Comments on “Movie Industry: Live By Royalties, Die By Royalties”

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PaulT says:

It's a strange situation

The treatment of writers in Hollywood always mystifies me. Without a script, there is no movie. Without a *good* script, it’s almost impossible to make a good movie. However, writers always get a raw deal despite their key contribution. Funny how it’s the opposite situation to the music industry, where the songwriters often get more royalties than performers.

Kevin says:

Not just writers, but actors too

I’m usually anti-RIAA, MPAA, big entertainment business, yadda yadda. But I’ve seen some interesting writings about this topic from Wil Wheaton back when he held an office in SAG. A lot of the justification for residuals and such is based on the fact that not just the studios get paid, but the actors, writers, etc also get a piece of it. The rationale being that if most actors only got paid once for the work they did, they wouldn’t make enough money to make being an actor worthwhile. That argument doesn’t hold much water for the Tom Cruise or Julia Roberts types who make millions of dollars off of every picture, but big Hollywood stars are the exception to the rule. The vast majority of actors are bit players who you’ve never heard of who get paid scale for a couple of days work (or a couple weeks if they’re lucky), and then have to go back to auditions for the next month. In that case, residuals actually help ensure that there are people there for those little jobs.

Not that I think that Hollywood needs to get paid every time something of theirs is used. It makes sense that for a number of years they should get paid for replaying their movies/shows, assuming that part of the money trickles down to the bit players. But I’m still all for fair use and a limit to copyright as well.

Anonymous Coward says:

Re: Not just writers, but actors too

i believe that ur argument is flawed:

ur saying that for the big actors the residual income isnt so important cause they get million dollar contract but for the smaller actors it makes a difference.

to my knowledge only the big actors get a residual income the smaller actors just get there salary for said scene or movie if they have a major part.

Srg says:

Logic is flawed ...

I agree with your “ideals” but I think that your logic is flawed. The factory worker is in “operations,” a manager is in “management,” … Script-writers, composers, research scientists, artists are “creators.” Every one has their own role within any industry. Their remuneration should reflect (and motivate) their different functions …

Anonymous Coward says:

Re: Logic is flawed ...

The analogy works with factory workers. The situation is much like an inventor who certainly should get royalties. You never know how useful an invention will be, so if the inventor of say pennicillin sells it for mere pennies and it makes it big, how is that fair? Likewise, the situation could easily arise whereby the inventor KNOWS the large value of the invention, but cannot convince anyone to pay its true value and/or nobody can afford to pay it. That would all but stop the most useful of inventions / creations / movies / music / etc from being produced.

Charles Griswold (user link) says:


Next you’ll say “ethics” or “morals” — as if they exist on the Left Coast.

Much as it may shock you, the West Coast does not exist entirely of greedy Hollywood execs and Christine Gregoire, just like not all conservatives are Michael Savage. I should know. I’m a moral, ethical, West-Coast-dwelling conservative.

So stop making us conservatives look like a bunch of knee-jerk, close-minded bigots, okay?

Chris says:

Writing for movies in hollywood is complex

I think one of the reasons writers are not getting paid royalties on scripts is that most scripts are not written by one person. In a blockbuster script its possible to find lines written by over 15 people. Multiple drafts and rewrites (executed by an entirely new writer) are expected for movies especially when the studio gets involved. The idea or initial script is generally sold to the studio by an initial writer and then the studio hires other writers to tweak the piece as they see fit. Now it does all depend on the movie, and some writers are known for going from start to finish with their work, but there are many others who are known only for their ability to improve a script that is lacking.

just my two cents

Samuel says:

Software Developers

Srg: I’m a software developer and an engineer. Like most artists, of every type, the majority of my work is nothing special though occasionally some of it is new and unique enough to recieve accolades and awards. Regardless, I DO create every day. Why should artists continue to earn money for every use of their creations when I do not? There are many software developers and engineers whose weekly “creations” dwarf my yearly accomplishments and quite a few that create things which surpass my lifetime’s accomplishments. Many of their creations, and a few of my own, have made it into products which have demonstrably provided far greater benefit to mankind than ANY artistic work ever could. Why should artists continue to earn money when these people do not?

I’m sure the answer many artists would give is that one is art the other isn’t. I know that’s true because I’m an artist too and I hear it all the time. It’s a rediculous argument despite the clamour about the value of art in society. Until recent history artists were were considered tradesmen and craftsman. They had valuable talents yes, but they were paid by the gig only – as it should be. A few elitist con-men manipulated the rich and then the other classes to raise artists and their works’ percieved value to society in order to cash in. Unfortunately the perception stuck.

Chris says:

Re: Software Developers

As a creator of visual fine art, I’m a bit offended by this assertion that one is “an artist” immediately followed by a diatribe on how art isn’t worthwhile. Are you saying all creative effort is junk, or just mine? I suppose I’m a dreamer for thinking culture, communication and beauty important…

Regardless, I don’t think a developer should be getting paid forever after for every use of their code, sorry. It doesn’t make sense for them or for me any more than it does for the studios, and it seems to me that folks like us arguing we should get royalties because they do obscures the fact that it doesn’t make economic or cultural sense for anyone to control the flow of ideas and information the way current copyright and patent laws enable certain industries to do.

Kevin says:

I'm not sure that you can necessarily compare it t

In the cases of engineers, programmers, factory workers, managers, etc, the assumption is that they are all employed by a company that pays them a regular paycheck for that work. If you happen to be a creative type in the technical field who is independent, i.e., not regularly employed, then you are certainly welcome to license or charge for your creations at whatever price and under whatever terms the market will bear. And as pointed out by someone else, there are patents and licenses to make sure that people in that position can continue to get paid for their creations.

But independent actors (or screenwriters) are almost universally independent. If they can’t get some sort of income for the commercial re-use of their creations, then what motivates their functions? If only the very top few people can afford to make a living at acting/writing then we’ll have a lot fewer actors/writers.

My line of thinking is this:

1. Copyright is a good thing, because it ensures that people who create can earn from their creation. This assumes that there are reasonable limits on the duration and scope of copyrights.

2. Copyright allows the studios to continue to make money from a movie/tv show after it’s initial release.

3. While studios pony up the money for most productions, they are rarely the creators. The writers/directors/actors are. Incidentally, these are also the people least likely to be regular employees of a studio/production company and therefore the ones least likely to get a regular paycheck.

4. The studios should be forced to share the residuals with the creators of the work (actors/writers/directors/etc). Otherwise it is the studios who profit from the creative efforts of others.

I don’t think that there’s anything wrong with the above, as long as there are reasonable limits to the copyright. It gives an incentive to create new works, distribute new works, etc, and makes sure that everyone involved in creation and distribution gets a slice of the pie.

I know some people are morally opposed to letting people profit multiple times from a single creation, but I honestly don’t think that there’s a problem with it as long as it’s done reasonably. In a lot of cases, it’s the ability to continue to profit from works over a period of time that makes them financially viable to begin with.

artguy says:

Assuming risk

What people seem to leave out of the royalty discussion is the assumption of risk. If you create something out of nothing you are taking a chance that there will be little or no compensation. Royalties compensate creators based on the profitability of a creation over time.
Sure, you can take a lump sum payment or a salary from someone who can afford the risk. But thats not always the best way to extract value from a project if you can afford the risk of failure.
It’s not about being art or elite, although people on both sides of the discussion would like to make it so.

Srg says:

Logic is flawed ... and not the "Ideals"

Samuel, Joe: What I wished to express in my comment was that you can’t stick the remuneration of “factory workers” to a “Script Writer” (“Manager,” “Researcher” etc). whilst expressing no stance on whether the current remuneration system is good or bad. — I just thought that the fixed monthly payment that the factory worker gets just wouldn’t work for script writers (and the rest). — Indeed, as for Samuel’s argument I would agree with you …

Monarch says:

I worked in the entertainment industry in Hollywood. I can tell you that not everyone who works on a movie or TV show gets residuals. In fact the majority of the people who work behind the camera do NOT get any residuals, and they also have to continue to look for work once the production is over.
Actors used to get regular paychecks from studios, John Wayne did, and that’s why he has so many movies under his belt.

Actors rebelled and wanted freedom, it wasn’t until the late 60’s and early 70’s that actors started receiving residuals from the productions they were in. Basically, all the unions, as unions do everywhere, destroyed the structure of the entertainment industry, and not just the actors guilds.
There is a plethora of talented actors in Hollywood, however the majority of them can’t get a break. Get rid of residuals, and some of them might get that break they need or want. Let the greedy studios get their money, as they always will in the end anyway.

Maybe they will start backing down on trying to gouge the average paying citizen if they aren’t being gouged by their own employees. Highly unlikely, but maybe.

Adam says:

Re: anti-union lunacy

So you think that if unions were to dissolve that more actors would get breaks?
I’ll let you in on a secret that everyone knows about organized labor. If there were no unions then all these actors you think would be “get that break” would be paid even less than they are now. Companies, whether they are studios or coal mining companies, will pay as little as possible so that they take home the most money. This is done on the backs of working people.
I realize that the exorbitant amount of money that writers/actors/directors (not to mention athletes) make is skewing this view. My point is, regardless of how much the artist is making, the studio head is making the lions share in spite of the fact that these movie wouldn’t exist without these artists.

Anonymous Coward says:

So not only are they...

trying to buy (from politicians) an eternal welfare system for the entertainment industry but now they are even turning on the very people that make their hit movies possible. And isn’t funny that all these royalties are getting paid to the excutives themselves?

But if it weren’t for the fact that a lot of writers would get screwed out of money I’d say let them have their way with those new contracts…and then see how long it takes for writers to simply stop signing those new contracts. Yeah they can rig those contracts to say whatever they want but they make the writers sign them.

And I’d like to see the day that other industries start coming after the enteraintment industry for similar royalties:

General Electric wanting to get paid for each time a recording studio uses their already paid for lights.

Car (or any product) companies wanting to get paid every time a movie is played with their cars (or products) in it. I’d like to hear Pontiac, Ford, Hummer, and Chevy have this conversation with the recording studio behind Transofrmers.

Or my favorite. Does this mean that movie studios should be paying media player manufacturers? Because without all those Magnavox, Pioneer, Toshiba….ect. players out there there would be no way to watch all those movies right?

Anonymous Coward says:

> Actors used to get regular paychecks from studios, John
> Wayne did … Actors rebelled and wanted freedom,
> it wasn’t until the late 60’s and early 70’s that actors
> started receiving residuals…

The decline of the contract actor/studio system was certainly part of the demand for residuals, but an even bigger reason was technological.

In the heyday of movies, say the 1930’s to mid-50’s, once a movie had been through first- and second-run theaters, it was so much celluloid in a can. Residuals were basically irrelevant, because there essentially was no income after the movie had had its day on the screen, for the vast majority of films. Most of John Wayne’s movies from his prolific contract days were shown and forgotten during his lifetime.

It wasn’t until the advent of TV that the studios realized that they were sitting on a gold mine of old movies which hadn’t been shown in decades. That’s when residuals started to become an issue – the studios were making money renting movies for TV viewing, and the actors and writers wanted a cut. Even then, though, the number of times a movie would be shown was limited.

The second wave came when home video became possible with VCRs, videodisk, DVD, etc. For the first time, a movie could be sold over and over again, not just for one Monday Night Movie a year but every day in every town in America. All of a sudden people all down the chain began to view movies as ongoing day-in/day-out cash generators.

Samuel says:

Re:Travis O

>>*cough* patent licenses *rough*

Sorry Travis, but 99.9999% of all code written isn’t patentable and most the rest, as we all know, shouldn’t be. Second, patents don’t give you a lifetime (and then a considerable some) guarantee of earnings with every USE (in many cases). Thirdly, for the vast majority of engineers and programmers anything they “create” becomes the property of their employer and any residual income from patents and licenses goes into the employers pockets.

Chris says:

RE: I'm not sure that you can compare it

}} 3. While studios pony up the money for most productions, they are rarely the creators. The writers/directors/actors are. Incidentally, these are also the people least likely to be regular employees of a studio/production company and therefore the ones least likely to get a regular paycheck.

Oh, you mean like a IT contractor or consultant, or perhaps contracted programmers? Someone who works based on the need of his potential clients? If I work as a contracted programmer I am being creating something, but I generally just get paid per hour, or task.

}} 4. The studios should be forced to share the residuals with the creators of the work (actors/writers/directors/etc). Otherwise it is the studios who profit from the creative efforts of others.

I strongly diagree. The studios shouldn’t be forced to do anything. They should have the freedom to contract or employee people with any conditions that people will accept. I do think what they are trying to do is hypocritical, but I don’t see anything wrong with it. If you don’t think you are getting a good pay for the work you are doing, you can choose to do something else or work with group of people so you have a better negotiating position.

In IT, and almost every other field there are ‘creators’ that don’t get paid for every time their creation is used. A Microsoft programmer doesn’t get a cut of the money every time Word is sold or used, the investors get a cut.

Kevin says:

Re: RE: I'm not sure that you can compare it

to my knowledge only the big actors get a residual income the smaller actors just get there salary for said scene or movie if they have a major part.

You’re confusing residuals with points. Big name actors can often negotiate for a cut of the box office take, video sales, etc. Those are points. Residuals are payments made for re-showings and sales that are distributed to all of the actors (at least the ones in SAG).

Oh, you mean like a IT contractor or consultant, or perhaps contracted programmers? Someone who works based on the need of his potential clients? If I work as a contracted programmer I am being creating something, but I generally just get paid per hour, or task.

If you’re not happy with your contracts then you can always negotiate for better ones. Unfortunately for you, most companies looking for contract/consultant work are looking for a person, any person, who can do some specific task. Whereas in Hollywood they’re looking a person with a specific look and sound and body type and voice and acting ability and so on who can play a specific role the way a single person envisioned it. That makes contract programmers less scarce and more interchangeable than most actors.

Think about what happens if you eliminate residuals in the future. The income that actors receive from residuals goes away, and instead that money goes in the pockets of the studios. That’s what the studios want, because it’s a short-term game. But if the actors’ incomes from residuals goes down, then their rates for work will probably most likely go up to compensate for it. Either that, or each actor will have to negotiate individually with studios for contracts for higher pay or a cut of residuals. It would almost be easier if there were some sort of standard for this…oh wait, there is.

Anonymous Coward says:

Re: Re: RE: I'm not sure that you can compare it

In support of your second point, I refer to Friends. Since it was a 10-year ratings topper, you surely know it’s a sitcom written by very clever, funny, excellent writers. If you change the writers, you change the tenor of the show. The show revolved around 6 characters, played by 6 now-well-known actors. If you change out one of the actors, you change the chemistry of the relationships and therefore the entire show. Without those specific writers and those specific actors, that show probably wouldn’t have been such a hit.

The fact of Friends being such a hit is the combination of the writing and the acting, and the studio that produced it made a TON of money. So the actors joined together and negotiated their first contract renewal to a phenomenal $1M per episode (which, let me tell you, is WAAAAAY above scale) for each of the 6 of them. This is not because they are greedy bastards who always want moremoremore. It is because they recognized the market value of their work. If the studio was going to rake in dollars, they should get a piece of it, because without them, the studio wouldn’t get those dollars; therefore, *they* make the difference.

By the way, as an actor who usually works for scale, I’d just like to state for the record that most actors don’t make bazillions of dollars. The few who do make it look like all actors get paid that much, but we don’t. It can be difficult, grueling work, and it’s really much harder to do than most people think it is. The good actors make it look easy, but it’s not.

Anonymous Coward says:

Actors/engineers and constant paychecks.

yes production workers earn a constant salary. however so do actors. they work on a movie… get paid and have to look for another job.

it’s like an engineer that has to reapply with his company after he does a project. or when a factory worker gets moved from procution to packaging or w/e.

but once they leave, they aren’t entitled to any compensation for items they created/designed or w/e.

vargas (user link) says:

I strongly agree with most of the other posters here. The only industry where people expect to continue to get paid for their work every time somebody wants to play, see, hear or perform said work even years later is in the entertainment industry. I

t wasn’t always that way. A very long time ago actors, musicians, artists and other creators were paid by the job! Like everybody else. Elitist arguments like “well art is different from other kinds of work” are nonsensical and don’t hold water.

I think they should go back to working for hire. Nobody else expects to get paid by royalties. I’m a writer and once I’ve created an article or story, I get paid for it once and move on to the next job. People can feel free to use my works as long as they give credit where credit is due. They don’t have pay me over and over again to read, refer to or use my work in their own projects.

Anonymous Coward says:

Re: Re:

“I think they should go back to working for hire. Nobody else expects to get paid by royalties. I’m a writer and once I’ve created an article or story, I get paid for it once and move on to the next job. People can feel free to use my works as long as they give credit where credit is due. They don’t have pay me over and over again to read, refer to or use my work in their own projects.”

If you work live, you do get paid for the gig and that’s it. Actors who originate roles on Broadway don’t get residuals when someone else plays the role — it’s done. It’s only when you add technology (life filming or recording) that residuals are involved, because then a producer/studio is using my “one-time” performance again and again.

If someone wanted to reprint your article in a book, would you expect to get paid?

Dalane (profile) says:

Why is entertainment so important

I am saddened by the lengthy discussions about why a millionaire deserves or doesn’t deserve more money. I am disturbed by the argument that if we do not give enough money to “artists” that they will not be able to craft their art. Hear me out I am an admirer of the arts and I can appreciate the time and talent it takes to create in any form of art. Why do we feel the need to support it? When was the last time a box office hit could be considered “beautiful” or better yet original? Really if we stop spending millions of dollars on mindless entertainment we win the argument. If you are unwilling to stop spending all that money on entertainment then shut-up!!!! You have no right to complain about what they do with the money you gave them.
P.S. No one ever said they had to be actors.

Calix says:

We're not like you ordinary folk, really ...

As someone who has a dog in this particular fight (I’m a burgeoning screenwriter and producer, so I’m playing both sides of the fence on this one) I’m fine with letting the market decide what my services are worth. I’m still confused as to why Intellectual Property should be treated any different than Real Property; if I buy a lot and build an apartment building on it, should I only be allowed to collect rents for 14 years per the Constitution, then anyone who wants to can use my building however they want? If I create something, then I own it, and I should be able to legally negotiate control of if and how it’s used – I can sell it complete and outright, I can create it paid hourly as a work-for-hire, I can sell first publishing rights to a magazine for an article but retain all other rights – it’s my creation, I should be able to exploit it however I want, with the given that the marketplace of buyers can also decide how it wants to compensate me (short of outright theft.) A free market works with buyers and sellers agreeing on what something is worth, be it the WGAw and AMPTP hammering out residual agreements, the studios selling their content to the marketplace, or the engineer selling his skills by the hour to the corporation. You engineers want residuals? Negotiate them! This discussion particularly belongs in Techdirt, because the underlying reality of this whole negotiation is that AMPTP doesn’t want to give up any of that juicy revenue stream that waits around the corner if/when someone figures out how to effectively monetize digital distribution of filmed content on the Internet … but the bottom line is that the WGAw will get royally screwed as usual (no condom, no KY Jelly) because they’re a eunuch who always caves in; and the fate of the AMPTP isn’t far behind because they’re still entrenched in the old way of thinking of revenue generation which is increasingly irrelevant in the digital age. Now the really important question is this: can someone explain to me how to afford a house in Bel Air as a screenwriter in the new millennium?

Kyle (user link) says:

Why Royalties Exist

Royalties exist because the law insists that recreations/reproductions/imitations of creative works be paid for as a licensing fee. It makes perfect sense for Hollywood studios to demand money for the usage of their movies, because they OWN the rights to the creative work. If someone else owned the rights, then they should receive royalties as well.

As someone above also mentioned, portions of these royalties get paid to others involved in the creative process, from directors and producers for a job well done, to writers for their creative products, to actors for the usage of their likeness. However, the lighting guy doesn’t get paid for his job, because its not a form of intellectual property nor is he contractually entitled to royalties. He’s a day laborer and is paid as such.

Similarly, your factory worker building the widget is simply a laborer with no contract guaranteeing him any rights to future payments. HOWEVER, the inventor/engineer who designed the widget and patented it does receive future payments, because its his intellectual property.

Now it was messed up that the studios tried to withhold some of the royalties from New Media from the writers, but in the end justice prevailed. So let’s all embrace an economic situation that allows us to get rich for something we haven’t worked on in years. 🙂


p.s. Check this out for more info on how Hollywood royalties and residuals work.

mariahpoo says:

Software Developers

I don’t think that is what he was saying at all. They are two different fields. Where software developers or web developers or graphic artists are concerned there are no royalties because this is a primarily corporate 9-5 job with steady income. The writing of a script play or book is different because it takes a while to create something of this matter that is less technical and more about relation to others enjoyment and art. My husband write and does graphics. So I have first had experience of just how different the creation for each is. Plus I have friends and family in both fields. Authors or books get royalties. I think script writer should as well. This position is different and does not have steady income. Thus royalties. Every time a book is sold or a movie is broadcast they should get a piece. If the nature of the beast changed and script writers were in a corporate office just like developers I would not think the should deserve or need royalties. Like I siad it is just the nature of the beast.

SkaterGirl says:

Yep, the main issue is that royalties are generally paid on things to reduce the initial risk. That is, rather than getting an upfront payment, you get something which reflects what it actually earned which, a) means it is possible to make movies with less initial funding by adopting what’s essentially a “co-op share-the-profits” model, and b) people are motivated to produce creative products that will actually be popular, rather than just doing the bare minimum to satisfy their employer.

Rather than removing this funding model from the creative industries, it would probably be good to apply it to MORE industries in one way or another.

Equilibrium in Capitalism says:


So, first of all, obviously, this thread is OVER a decade old… I know. Lol. Still, I found the debate here VERY fascinating, enough to want to add something to it 😉

The thing that fascinated me the most? … Tons of people argued FOR residuals in entertainment, often because it was “different” than other types of work; and tons of people argued AGAINST residuals, because “[other job type] is NOT so different, and they don’t get paid repeatedly so why should [actors, screenwriters, etc]” ……….. But what I DIDN’T see, until finally within the very last FOUR posts (Calix & SkaterGirl), was the obvious THIRD (really, first!) argument, which kept coming back to my mind the whole time I was reading this thread:

Rather than each side argue that actors/writers/etc should or shouldn’t get a SMALLER piece of the massive pies… How about we argue that other job types get MORE of the massive pies they’re helping make?

No, many jobs AREN’T so terribly different than entertainment industry jobs in terms of the money-generating potential. Especially these days.

It isn’t about whether one job is harder or easier, longer or shorter, more or less steady (employee vs contract), etc.

The REAL questions it tends to come down to are actually about, one, the potential it has for making hefty profits repeatedly (especially with low overhead costs [little ongoing risk] after initial investment… a big advantage “intellectual property” projects – like movies, music, or patentable stuff – often have over most kinds of physical products, and even MORE so now that digital content is becoming more ubiquitous)… and two, the type of role you had in it (that is, how much did YOUR specific contribution add to the overall financial success of the project? Were you the inventor? The author? Anyone who could be partially credited with the very EXISTENCE of that “product,” in some integral way?). Of course, if the project isn’t designed or intended to make money, then the creator can’t and shouldn’t expect residuals – like a web app For a nonprofit, with no ads or subscriber fees (but if they ever switch from nonprofit to money-generating? Just make sure you had that in the contract!)

For example……

Somebody said here that they write articles for websites, and they just get paid 1 time and move on, and their argument was basically that everyone should accept submitting to the same pay scheme. Why?

The websites you’re contributing to (yes, even 10 years ago, but especially now) probably plaster advertisements ALL over your articles’ page, as most sites would… Maybe they even have paid subscribers… and they undoubtedly charge something when content from their websites (such as, YOUR article, if you grant them copyright terms by posting there) is requested in commercial projects (like an advertisement).

But those websites’ admins also have endless statistical data showing which articles are getting the most visitors, which article’s ads are getting the most clicks, etc. So they know EXACTLY who and what are bringing in the most eyeballs and generating the most profit for them. As such, all their statistical data also means they could easily figure out a fair way to profit-share. Advertisers pay them every time your article is viewed and/or their ad is clicked… the website can pay you a percentage of every ad-dollar generated on YOUR content page(s). Or if they’re subscriber-based, they can easily determine which authors deserve what share of the subscription pool profits each month based on whose articles cumulatively got the most traffic (to least traffic), again easily being able to equitably compensate the people (without whom their sites would be nothing) based on fair metrics.

They have costs (servers, offices, etc), so they deserve something for hosting your article on their “popular” platform, without which your article might never have been seen… And without your fascinating writing style luring in readers, the person searching that topic may have defaulted to a different website (losing the host that ad revenue and/or subscriber). So they get money from your work “perpetually” (for as long as people visit a particular article) – why SHOULDN’T you? (They can always add in caveats to keep their admin costs reasonable, like “Host will only issue checks when residuals reach at least $50” – thus not sending checks every month to an author making $3/mo in residuals… Also incentivizing more, higher quality articles!). Granted, there might be a trade-off, in that writers might make less upfront (per word or article), but they might also make more in the long-run (but all that is part of negotiating and deciding on terms).

Guess what that “residual” model would tend to do…? It incentivizes people (article writers, in this instance) to put real time, thought, and quality into their work… Because if their article is good enough (unique, or well-written, or thoroughly researched, etc), it might gain a big audience… And if it becomes popular, the writer could cash in big (now individual bloggers branch off into their own sites to do much the same thing)…

Right now, instead, most websites pay pennies per word for article writers (if that). And what does THAT incentivize? Barely (if at all) researched, often poorly edited, low quality litter that only pretends to be the answer to your query while really just displacing more useful answers (say, because it happens to be posted to a site which OVERALL has enough popularity to push its pages to the head of the line – deserved or not – or because they’re really good at SEO but not actual content). It encourages people to pump out a constant stream of vapid garbage instead of meaningful content (every minute researching is a minute unpaid!).

But other jobs could also be treated similar ways… A programmer who signed on to create a freemium app could negotiate a percentage of profits. A team of researchers who are hired to create a patentable drug could negotiate a share of that, too.

Why NOT make residual income on something you’re largely responsible for making happen (if your employer will make money), other than because the workers of a given industry haven’t stood together to demand it yet…? (I saw someone complain about price gouging and blame residuals – no, companies will charge whatever the market will bear, residuals or none… Might as well make residuals!)

It’s ultimately not about merrit, skill, specializations, or lack thereof in any of those, or almost any other arguments I saw here… It’s about what we, the creators, are willing to put up with or fight against and the norms we’re willing to submit to, on one hand – and the money-generating power of our “product” on the other. If everyone across multiple industries started demanding that they get paid for the same product the company continually makes money on, and refused to take no for an answer, more industries would have to bend to that demand and spread the profits around to the people who make it happen. Negotiation IS an option – even for people besides entertainment industry. Even the factory workers could, technically, band together: “we make 1 million toys per year, so we want 15% of the averaged profits from 1 million sales to be split among this factory’s workers based on hours worked”… Or create a % company-wide to benefit ALL at EVERY location, or whatever……. The only hard part with factory workers being that they’d have to band together in HUGE numbers to prevent secret option #2: fire the “trouble makers” and just find someone else (harder to fire if it were hundreds of people – which is why unions are effective… To be truly effective, it either has to be individuals who are irreplaceable, or a massive group).

But in the end, Who says ANYONE (whose output is responsible in a large way for the money that company is making) should resign themselves to making peanuts, while the company gets billions for the product YOU designed or assembled? Ultimately, you decide that for yourself, if you believe in the “get a check and move on to the next gig” thing or buy the ridiculous idea that a livable wage is too good for someone of “low skill” or “no education.”

The part I find saddest is how brainwashed many are into thinking that the only ones worthy of profiting, beyond being paid (usually as little as possible) for the initial output, are the corporations… Yet without you all creating and assembling stuff, what would the corporations sell? Who would buy ads? Why would anyone subscribe?

The world needs to deprogram their peon-trained brains, and wake up to the new world of profit-sharing potential, made possible by algorithms and statistical software and all kinds of nifty stuff.

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