In the 1930s when the Screen Actors Guild was being formed, the main considerations were for actors to receive fair pay and safe working conditions. Actors prior to the union or guild formation were on their own when it came to dealing with financial matters. The studio bosses could be very tough when it came to overworking the cast and crew to get movies made. The budget on a film usually did not include safety precautions for the cast or crew or animals on a set.
In the 1930s when sound arrived and color movies became more in vogue and the lens ability to do closeups of faces became more sophisticated, the actors began to realize THEY were what the audiences wanted to see. They were the reason for the ticket sales. Even the big scenes with dancers and cowboys on horses and chariot races required precision and focus that could be best handled by professionals. Actors asked for, then demanded, more payment and respect. In the end, after the dust had settled, the actors won and the Screen Actors Guild was born.
For the first decade of its existence the Screen Actors Guild paid little attention to the electronic toy called television. Shortly after World War Two that changed. Television was becoming a real competitor to radio and movies. Old movies were sometimes shown on TV. A few actors, notably William Boyd of Hopalong Cassidy fame, started writing residual clauses into their movie contracts. If one of their movies was to be shown on TV the actors wanted residual payment. Small change at first, for the actor and the studio. Not a big deal. These new movies would never be shown on TV, so thought the studio heads. The studios would be able to charge very high prices for TV broadcasts of their movies, because TV stations did not have big budgets. These new movies would be shown only in theaters and then they would become old movies and they would rot away in a vault. Surely no actor would ever get royalties.
Hopalong Cassidy movies soon became a major programming product for TV. William Boyd was making more with residuals than he did with his acual movies. He had been smart enough to make a product which fit neatly into TV programming schedules and he was making a good living at it and the TV stations were getting high quality shows for less than what it would cost them to produce a local show.
The residual was born. That meant payment for an actor's work when the movie was shown on TV. This was in addition to what the actor was paid when the movie was first made.
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I worked on Dear John on NBC TV from 1988 until 1992. I made good money on that show as an actor. After 4 seasons the show was not renewed. It was no longer on NBC TV each week. However the show was on many stations who bought the syndicated episodes of the show.
Dear John had 90 episodes plus a pilot. There were 91 episodes which were syndicated. The actual formula and amount of money for the residual payment has changed (gone up) since those days, but here is an idea how it all works. I am mentioning this only to encourage you to consider SAG membership and union conditions, if possible, when you work as an actor.
Mailbox Money is a term used by actors for residual paychecks.When I worked on Dear John the weekly minimum for a SAG actor was about $1500. I will not use exact figures because I want you to focus on how it works, not how much I made. When the stations started buying the syndicated episodes they were charged a certain amount per show depending on the size of their market. Let us imagine 100 stations buying 91 episodes each. Some stations in Europe bought all 91 episodes. For a hypothetical situation, each of those stations shows each episode ten times.
Whether it was 100 stations in the US or 92 stations or 603 stations that each bought the show, my income would be the same. Since each episode is shown ten times, I am paid 910 paychecks. That is 91 episodes times ten. The first paycheck is for the weekly SAG minimum (or daily rate if you worked only one day on that show.). The second paycheck for that episode (the second time that show is broadcast in reruns) I receive a little less. I do not know the exact formula. The third time and fourth time the amount goes down a little more. After about ten showings the amount freezes and if the episode is broadcast 1000 more times (on the same station) I would receive 1000 more paychecks at the low rate. If the station cancels after showing the 91 episodes one time each, it would not affect my 910 paychecks if some of the stations kept showing the episodes over and over and at least one station showed the episodes ten times. If some station somewhere shows the episodes an 11th time or 12th time I get another check for each episode that showed past the number for which I have already been paid. Do not think an actor is paid by each individual station and that if the show is in 300 markets you will receive more than if it is in 100 markets.
Since the reruns are a daily thing, sometimes five or six times each week, the rerun shows get aired much more often than a regular, once a week sitcom. I would sometimes find 30 checks in my mailbox in a single day. I opened three bank accounts to keep from drawing too much attention to how much I was depositing in a single day. Foreign residuals are a one time big payment for all 91 episodes or however many there may be. Do look forward to your first residual check. Union pay and benefits and residuals are better than non union. Residual income is forever... if the TV show or movie continues to be broadcast.