The 2017 MBA includes increased residuals for HBSVOD programs when they are reused on the original SVOD service. The increased residuals apply to programs or episodes written under license agreements made on or after May 2, 2017. Current series or those with a license agreement made prior to May 2, 2017 will receive residuals under the formulas negotiated in 2011 or 2014.

The new residual formulas include, for services with 1 million or more subscribers in the U.S. and Canada, a domestic residual of 35% of an applicable minimum after 90 days of availability.

Residuals will also be due for reuse on foreign affiliated SVOD services. In general, if an HBSVOD program is available worldwide on the SVOD service, the residual payment will be a percent of the domestic residual (35% for each of the first three years, a declining percent thereafter). If the HBSVOD program is available in some foreign markets, but not worldwide, the residual will be 1.2% of the license fee for the foreign markets.

The new contract provisions also establish new subscriber tiers, which determine the residual.

Provided below are examples of residuals for the first three years of availability of episodes made for Netflix, Amazon and Hulu. For these examples, we assume that Netflix and Amazon make the episodes available worldwide. Because Hulu currently operates in the U.S. only, we do not include a foreign SVOD residual payment.

Half-Hour Episode

Platform Domestic Subscriber Tier New Domestic Residual New Foreign Residual New Total Residuals under 2014 MBA Gain
Netflix 45 million+ $20,121 $7,043 $27,164 $8,106 +$19,058
Amazon 20-45 million $13,414 $4,696 $18,110 $8,106 +$10,004
Hulu 5-20 million $8,718   $8,718 $5,270 +$3,448

One-Hour Episode

Platform Domestic Subscriber Tier New Domestic Residual New Foreign Residual New Total Residuals under 2014 MBA Gain
Netflix 45 million+ $36,571 $12,800 $49,371 $14,734 +$34,637
Amazon 20-45 million $24,380 $8,534 $32,914 $14,734 +$18,180
Hulu 5-20 million $15,846   $15,846 $9,578 +$6,268

After the first three years, writers will continue to receive an annual residual payment for domestic and foreign SVOD reuse if the program remains available on the SVOD service. Should you have additional questions, please contact the Residuals Department at (323) 782-4700 or Residuals.