Residuals are payments made to actors, directors, and writers involved in the creation of television programs or commercials when those properties are rebroadcast or distributed via a new medium. These payments are also called "re-use fees" or "royalties." For example, when a television series goes into syndication, the writers, actors and directors who work on a particular episode are paid a percentage of their original fee each time that episode is rebroadcast. This also includes re-use through cable, pay television, and videocassette sales.

Residuals have played an important part in the history of broadcasting unions. In the early days of live radio in the United States, actors had to perform twice, once for the Eastern time zone, and again three hours later for the Pacific time zone. As recording technology developed, networks recorded the first performance and simply replayed it three hours later. In 1941, the American Federation of Radio Artists (AFRA) insisted that the actors be compensated for the rebroadcast.

With the development of television in the 1950s, a new distribution outlet was created for motion pictures. The Hollywood unions representing actors, writers, and directors feared that they would lose job opportunities if television stations broadcast preexisting movies instead of paying for new programming. In 1951, the American Federation of Musicians negotiated residual payments with film producers for the broadcast of movies on television. The next year, the Screen Actors Guild (SAG) conducted a strike against Monogram Pictures to force the company to make residual payments when its movies were broadcast on television. In the mid-1950s, SAG was also able to negotiate residual payments from the emerging television networks for reruns and from advertisers for the reuse of television commercials. By 1960, residuals had become standard practice throughout the film and television industry.

When new distribution markets emerge, unions such as the American Federation of Television and Radio Artists (AFTRA), the Writers Guild of America (WGA), the Directors Guild (DGA), and SAG negotiate for residuals in those markets as well. In the 1970s and 1980s, unions negotiated residuals for cable, videocassette, pay per view, and even in-flight movies on airplanes. In the mid-1990s, unions were fighting for residuals in new markets such as CD-ROMs and computer networks.

Residuals are a lucrative source of income, and thus a major source of contention between unions and producers. As Archie Kleingartner and Alan Paul point out in Labor Relations and Residual Compensation in The Movie and Television Industry (1992), residuals have played a major role in 18 strikes by the various unions. Low-paid actors working in television commercials often earn four times as much from residuals as they do from their initial fees. Series actors, who are paid much more for their initial services, still earn about 30% of their income from residuals. In 1990, total residual payments exceeded 337 million dollars, not counting residuals from television commercials.

Unions negotiate residuals with the Alliance of Motion Picture and Television Producers (AMPTP), which represents most studios and independent producers. In 1995, the three biggest television networks (ABC, CBS, and NBC) separated from AMPTP over a dispute regarding the status of the newer FOX network. The three older networks wanted FOX to pay the same residual rates that they pay, while FOX argued that it was not technically a network by FCC standards. At this time, the unions negotiate with the three networks and AMPTP separately.

Residuals are an important source of compensation for actors, writers, and directors whose works are distributed in an ever wider array of foreign and domestic markets. They are a major factor in the continuing strength of the various unions over the years.

-Matt Jackson