Big Fish sells 2 million DVDs in its first week
According to The Hollywood Reporter, Big Fish sold 2 million DVDs in its first week of release. Many thanks to all of those who bought a copy. Or three. And if you haven’t bought one yet, you can click the pretty picture to buy one through Amazon.
The screenwriter averages about five cents in residuals for every DVD sold, so that works out to $100,000. That’s a solid amount of money — enough to convince otherwise rational Americans to humiliate themselves on reality TV shows, for instance. So before I launch into an explanation about why DVD residuals are too low, understand that I’m not so jaded as to think a hundred g’s is a pittance. It’s a lot, and I’m grateful for it.
The issue of DVD residuals (and video-on-demand, the technology that will one day supplant it) is one of the primary topics of the current WGA negotiations. I won’t go into a long history here, but the formulas used for home video residuals are based on videotapes, which are relatively expensive to produce, and sell for a fairly low price. Technology changes. DVDs are cheaper to produce, and sell for a higher price. But the formula for paying residuals is still locked into the old paradigm. Studios make a hell of lot more on each DVD they sell, but the writer (and actor, and director) still get the same amount.
A recent campaign by the WGA East does a graphical breakdown of the numbers, but let’s take Big Fish as an example. According to Video Business, its MSRP is $28.95, but most people will pay less than that. Let’s say $20, which is what you’d pay on Amazon. And Amazon is still pulling a 25% markup at that price; it buys the DVD wholesale at $16.
How much does it cost to manufacture, package, distribute and market each DVD? On average, $5.45. So the studio is making a profit of $10.55 on each DVD sold. For Big Fish, that means Columbia/TriStar has made $21.1 million profit in just one week. Of that, the writer gets the “point-one.”
I’m certainly not faulting the studios for having found a great business model. I love DVDs. But whenever writers, directors or actors ask for a greater chunk of residuals, the studios cry poverty, which is absurd. True, fewer movies are earning their investment back in their initial domestic run, but that’s largely because of inflated production and marketing costs. The box office is still incredibly strong, and distributors have never had a cash stream like DVD.
The other arena in which DVDs are crucial is television. TV writers used to make their real money in syndication. Increasingly, series are sold on DVD, which greatly cuts down on the syndication life of a show. After all, who wants to watch an old Smallville at 6:00 p.m. with commercials, when they have a pristine copy sitting on the shelf? Since DVD residuals for TV shows are much lower than syndication residuals, the writer loses.
So how much should the writer get for residuals? Per unit, one percent of the wholesale price. It’s a nice, easy-to-understand figure, which works out to 16 cents per copy. This will never happen. But it would be fair.
Articles
May 9th, 2004 at 7:00 pm
Okay. But I wanna know if you getting checks for $250 a year for the sells of the “GO” DVD. I’ve always wanted to know about the royalties for indie flicks. (Yes I own “GO” — it was a must).
Jon, the other one
May 10th, 2004 at 10:15 am
Is it possible for writers to negotiate a higher residual for DVDs beyond the WGA’s Minimum Basic Agreement?
May 10th, 2004 at 10:41 am
Residuals are actually collected by the WGA, then forwarded on to the writer. So, no, an individual writer can’t negotiate a higher residual rate.
In theory, a writer (or director, or Tom Cruise) could negotiate a residual-like fee for DVDs, maybe per unit sold. But they’d be responsible for collecting it, rather than the WGA.
May 13th, 2004 at 9:20 pm
As for Jon (the other one)’s question, yes, I still get residuals for Go. Which is weird, because I almost never see it in stores. And when I do, it’s often in the “used” or “half-price” bins.
But the checks clear, so I guess someone is still buying it.
October 20th, 2004 at 1:47 pm
Isn’t it also true that, while studios/ producers have been notorious for screwing writer’s at every turn historically, these enormous payouts for garbage scripts by hack writers such as the $1,000,000 paid to Nancy Pimental for the script of “The Sweetest Thing” is part and parcel of why the studios scream poverty when someone rightfully wants a bigger piece of the pie? (And if dimwits like Cameron Diaz didn’t agree to do a movie like that a piece of crap like that script would never see the light of day in a just universe. It’s the fault of the idiot masses in this country that want to see star vehicles. The notion that there would be no film without the writer never seems to occur to either the audiences or the executives.) The studios have artificially inflated the value of star-driven scripts just as they’ve overvalued the stars themselves, and don’t even get me started on the astronomical production costs. Thanks for the site, John. It’s writers like you that keep the rest of us writing.
December 7th, 2004 at 8:07 am
When do you get the checks, each week or yearly?
December 7th, 2004 at 10:35 am
Checks come quarterly, but I never remember exactly which months they show up. Usually, it’s…”Gee, it’s been a long time since I got a residual check.” Then I open the mailbox and one’s there.