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Hulu Sale Wouldn't Impact Residuals

Hulu Sale Wouldn't Impact Residuals

A sale of the streaming video service Hulu won’t affect actors’ residual payments, according to SAG-AFTRA.

The site’s board is reportedly shopping around for a potential buyer. Two of Hulu’s parent companies, Disney and News Corp., are also weighing whether to buy each other out, according to Reuters.

Comcast also controls non-voting shares in the company, while last October Providence Equity Partners, an initial investor in the site, sold its 10 percent stake back to the company for $200 million.

A spokeswoman for Hulu declined to comment on the potential sale of the company.

The site, which was launched in 2007, has been billed as the “replacement for reruns.” Hulu says it had more than 450 content partners and approximately $700 million revenue in 2012.

In the past, union officials had worried sites like Hulu could lead to an end to residuals for actors. But as a signatory to SAG-AFTRA’s TV/Theatrical agreement, the producer of content that streams on the site makes residual payments to actors under specific formulas.

If it’s a television series airing on the non-subscription portion of the site, the residual payment depends on whether the series is in its first or second season. If it’s the first season of a series, no residuals are paid to performers for the first 24 days of streaming. That free streaming window is shortened to 17 days in the second season. Residual payments are then made as a percentage of the total applicable minimum rate and then graduated after a year into a percentage of the distributors gross earnings on the content, according to SAG-AFTRA

“For film and television programming on Hulu, residuals are paid primarily as a percentage of the distributors gross,” Mark Friedlander, SAG-AFTRA’s national director of new media, told Backstage. “Percentages vary based on a host of factors.”

There’s also a different residual calculation for films and whether the content is show on Hulu Plus, the subscription-based part of the site.

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