1999 WGA Annual Report to Writers
Writers Guild of America, west, Inc.

Residuals and Foreign Levies

RESIDUALS COLLECTIONS

Writers received $146 million in residuals in 1998, $4.9 million less than in 1997. While 1997 was an especially strong year, partly due to processing logistics of the Guild, the reversal in 1998 at best represents static residuals collections from an industry that continues to grow. This is the first year-to-year decline in residuals collections since 1975.

The most notable 1998 decline came in foreign residuals for television programming. Collections of $17.8 million were 8% lower than 1997. As distribution of television programs in foreign markets continues to broaden and deepen, the buyout formula that limits residuals to just three payments shortly after the initial foreign release becomes more and more obsolete.

In basic cable, the other area of distribution expansion, residuals effectively stood still with the 1998 total of $7.7 million just $400,000 greater than 1997. This represents 5% growth, the only category that grew this year. Yet, that growth does not fully track the expansion of cable as a distribution medium.

 

TOTAL RESIDUALS COLLECTED BY PROGRAM TYPE AND REUSE MARKET
(Millions of $)

Television Programs

1998

1997
Percent
Change
Network and Domestic Syndication
$50.2 $50.2 0
Foreign Free Television
17.8 19.3 -8%
Basic Cable
7.7 7.3 +5%
Videocassette/Pay TV
2.7 3.1 -13%
Royalty Plan Programs
0.7 0.3 +133.3%
Total Television Program Reuse
78.9 80.6 -2%

Theatrical Films
Domestic & Foreign Free TV
19.4 19.5 -19%
Videocassette/Pay TV
4.5 47.4 -5%
Total Theatrical Films
64.4 77.9 -4%

Other Residuals
0.9 1.2 -25%
Total Residuals Collected $146 $151 -3%

FOREIGN LEVIES

Foreign levies continue to be a fruitful area of collections for writers, although the gathering of data for the disbursement of funds continues to require diligence and persistence.

Foreign levies are funds received by the WGA on behalf of all applicable U.S. writers. Foreign collection societies send the WGA the U.S. writers’ share of taxes and levies imposed by foreign governments for the benefit of theatrical and television program authors. The primary source of these monies is “private copy” taxation for home video recording of broadcasts. These taxes are based on sales of blank videocassettes and/or VCRs, since monitoring actual home recording is both impractical and invasive, and are distributed to the authors of programs which were broadcast and, thus, potentially recorded. There is also a levy in Germany on rentals of prerecorded videocassettes. While foreign levy agreements are expanding to include more and more countries, the primary sources for these funds continue to be Germany and France. Recently, an agreement was signed with Argentina, making it our largest source of levies, with collections of about $1 million a year.

The WGA disbursed approximately $2.3 million in foreign levy funds in the fiscal year ended March 1999, marking a dramatic jump from the previous fiscal year ($500,000). The Guild has paid writers in excess of $5.5 million since the program’s inception, and there has been substantial progress in the receipt and recording of information to expedite payments in the future.

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