Way back in the early eighties, a revolution happened. Giddy with the power of new technology, motion picture studios rushed to release their back catalogs on the new-fangled videocassettes (and some on laser discs, but that’s a story for another day). They knew full well that this was a foolhardy decision, but with dollar signs in their eyes, how could they resist this new revenue stream?
Why foolhardy? Because the existing agreements with talent, from a participations and residuals perspective, didn’t cover this new distribution channel. With residuals, somehow the studios won and were allowed to continue to calculate payments as a percentage of a 20% royalty calculation. As I noted earlier this week, the guilds aren’t likely to take this forever.