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Understanding Your Film Musician Secondary Markets Fund

Secondary Markets Fund

by Kim Roberts Hedgpeth, Executive Director Film Musicians Secondary Markets Fund


In 2017, the Film Musicians Secondary Markets Fund (FMSMF) celebrated 45 years of serving the film and television music community. Created in 1972 by the motion picture and television producers and the AFM, the FMSMF’s primary purpose was to act as the agent of the producers to collect and distribute residual payments to film musicians. Today, we continue this mission, while also serving as a resource for motion picture professionals in addressing various challenges to the industry.

For some musicians and filmmakers, the FMSMF remains a bit of a mystery. Because FMSMF distributes a significant source of income to working musicians, all musicians working in film, television, new media, as well as sound recordings should be familiar with how it works.

FMSMF provides a unique service to the film and TV music community. For producers, it shoulders the responsibility of calculating and issuing individual musicians’ residual payments and paying required taxes and withholdings. For musicians, FMSMF sends a detailed listing with a breakdown for each title that accompanies the musician’s annual payment. This provides a “one-stop shop” to make residual tracking, personal record keeping, and annual tax accounting easier and more efficient for the working musician.

FMSMF is a 501(c)(6) nonprofit organization operating under the supervision of an oversight committee appointed by the Alliance of Motion Picture & Television Producers (AMPTP), and AFM liaisons appointed by the AFM International President who consult with the oversight committee. FMSMF does not engage in collective bargaining on behalf of either producers or the AFM.

How FMSMF Works 

FMSMF collects residuals (contributions) if a film, TV program, or new media project has moved from its primary market into a secondary market, and that secondary market use generates revenue, as described in Chart 1.

Secondary Markets Fund

Residuals collected by the FMSMF represent a small percentage (below 1% net of deductions outlined in the AFM agreement) of distributors’ gross receipts from secondary market distribution of film, TV, or new media programs. Producers and/or distributors send residuals directly to the fund on a quarterly basis. Residuals collected during the FMSMF’s fiscal year (April 1-March 31) are distributed to musicians the following July 1. Administrative costs for operating the fund (legal and auditing fees, insurance, salaries, computers, rent, etc.), taxes, and other required withholdings, plus a small reserve for “omissions,” are deducted from the amounts collected. Each individual title’s contribution is allocated proportionally against the total contributions received for all titles during the year. (A title refers to an individual film or a season of a TV series). Each musician’s share within each title is determined by applying the percentage that his original wages represented of the total wages paid to all musicians for the score, against the residual payment collected for that title during the year.

A second, smaller “omissions distribution” is made each September to musicians who the fund discovers were erroneously omitted from a project’s list of musicians, or whose original wages were underreported to the fund. FMSMF conducts its own research, reviews, and audits, either directly by the Fund Compliance Department or by outside auditors engaged by the fund to ensure that signatory producers and distributors make the required residual payments. In addition, the fund’s Participant Services staff works to find musicians who may have unclaimed residuals waiting at the fund. Many of these “lost” musicians are musicians who performed on AFM-covered sound recordings that were used in AFM-covered films and programs, but do not have a valid current address registered with the fund.

Who Participates?

Participating musicians include, not just instrumentalists who played on the score (on or off screen), but also conductors, orchestrators, copyists, arrangers, contractors, and other AFM-covered positions. Further, musicians who worked on a union-covered sound recording used in an AFM signatory film, TV program, or new media project may be entitled to share in that title’s secondary market residuals. If a participant is deceased, his/her designated beneficiary is entitled to receive the participant’s share of residuals. The FMSMF staff researches, identifies, and contacts beneficiaries to effectuate the musician’s intent for them to benefit from their legacy.

Recent Activity

In the 2017 fiscal year, the FMSMF collected more than
$98.4 million in secondary market residuals. Participants received 15,676 payments in the July regular distribution and another 1,415 payments as part of the September omissions distribution. A list of films, TV programs, and new media programs that have paid into the fund over the years is located at www.fmsmf.org.

It can take several years after the first release or broadcast before a film, TV program, or new media program moves into a secondary market and revenues are generated. Resulting residuals for an individual title can vary from modest to significant, depending on its success. Overall, secondary market residuals have grown in recent years. Residuals from new media exhibition of film and television programs have become a more significant share of the totals, as illustrated in Chart 2.

Secondary Markets Fund

FMSMF also administers a smaller sub-fund that collects supplemental market residuals for secondary use of live and videotape programs such as the nightly talk shows, variety shows, and other programs produced under the AFM’s Live Television Videotape and Basic Cable Television agreements.

Whether you actively work in film and television scoring, on a new media project, or in sound recordings, the FMSMF and the residuals it collects can be relevant to you. Now, the fund has new relevance to all working musicians. As a result of the AFM’s negotiations for its 2015 Film and Television Basic agreements, a portion of the residuals collected by FMSMF will be sent to the AFM-EPF to help support the funding of musicians’ pensions.

We invite you to learn more about the FMSMF by visiting our website where we keep musicians and producers informed about FMSMF activities and offer online services for musicians and beneficiaries to securely access accounts, update information, sign up for easy direct deposit and paperless options, and locate unclaimed residuals.

Remember, if you’re a participant, please make sure your address, email, contact information, and beneficiary designations are current and remain up-to-date with the fund. And, please visit us on Facebook.

On behalf of the FMSMF staff, we look forward to our continued service to the professional musicians of the US and Canada and extend our best wishes for a happy and healthy 2018!

Film Musicians Secondary Markets Fund

Film Musicians Secondary Markets Fund End of Year Round-Up

by Kim Roberts Hedgpeth, Executive Director Film Musicians Secondary Markets Fund

Film Musicians Secondary Markets FundThe Film Musicians Secondary Markets Fund (FMSMF) works to serve the film, television, and music communities and meet the needs of film musicians whose talents fuel the industry. To this end, the FMSMF is pleased to provide ongoing updates to the International Musician for the benefit of AFM members.

“New” Films

With the first six months of the FMSMF’s 2017 fiscal year now ended as of September 30, at the time of this writing, more than 150 new titles had reported residuals into the fund for the first time. Among the titles reporting for the first time this year are films such as The Peanuts Movie, Ride Along 2, Star Wars: The Force Awakens, Chi-Raq, Joy, and Deadpool, and television series such as Minority Report, 24: Live Another Day, The Catch, Agents of S.H.I.E.L.D. (2015/2016), and Wicked City. The list of “new” titles for fiscal year 2017 is now posted on the fund’s website, www.fmsmf.org, and will be updated as new titles report into the FMSMF for the first time during the remainder of the 2017 fiscal year.

As a reminder, when the FMSMF refers to “a title,” it refers to an individual motion picture, documentary, or television movie, or a single season of a television series.

2016 Distributions

The FMSMF distributed more than 15,600 payments to musicians and beneficiaries as part of its regular distribution on July 1, 2016. Another 545 payments were distributed in mid-September as part of the fund’s annual “omissions” distribution.

Learn More About FMSMF

The FMSMF was honored to conduct a workshop, entitled “FMSMF 101” for AFM Local 47 (Los Angeles, CA) members. This workshop is for the benefit of musicians who would like to learn more about the fund, how residuals work, and what the fund does to collect and distribute residuals to working musicians. FMSMF staff is always happy to provide such workshops for the benefit of working and aspiring musicians, and is available to travel to AFM locals outside of the Los Angeles area to conduct workshops at the local’s request.

Spreading the Word

FMSMF was proud to be an exhibitor at the American Film Market, November 2-9, 2016, in Santa Monica, California. This is one of several efforts the fund makes annually to reach independent producers and provide information, answer questions about film scoring, and about how the FMSMF works. These are also critical opportunities to remind new and aspiring filmmakers about the integral role that music plays to successful filmmaking, and the importance of planning ahead when budgeting. The FMSMF also attended the Toronto Film Festival in September, and plans to attend South by Southwest 2017 in March.

Visit Us on Facebook

Stay current with fund developments by visiting the FMSMF Facebook page and the website www.fmsmf.org. There you will find updates on fund policies, information on new titles, and new user features. 

From everyone at the Film Musicians Secondary Markets Fund—nest wishes for a healthy and prosperous 2017!

FMSMF Reports a Record Year

kim robertsby Kim Roberts Hedgpeth, Executive Director Film Musicians Secondary Markets Fund (FMSMF)

The Film Musicians Secondary Markets Fund (FMSMF) works to serve the film, television, and music communities and meet the needs of film musicians whose talents fuel the industry. To this end, the FMSMF is pleased to provide ongoing updates to the International Musician for the benefit of AFM members.

It’s a new record! The FMSMF closed its 2016 fiscal year with the highest level of contributions in the fund’s history! When the books closed March 31, the FMSMF had received residuals of more than $93.4 million, surpassing the record of $92,641,562 set in FY 2015. The continued growth of contributions to the FMSMF during the past several years is a reassuring testament to the continued growth of revenue generated by sales in secondary markets, such as pay TV, DVDs, basic cable, and new media platforms. It is also a good news indicator about the health of this segment of the industry and its ability to sustain a middle-class living for freelance talent working in film and television.

Unclaimed Residuals

Thank you for helping to get the word out. The fund consistently strives to find “lost” musicians who have residuals waiting at the fund, but for whom we don’t have a valid address on file or contact information. With your help, during the 2016 fiscal year, the fund staff located 498 musicians and beneficiaries who had unclaimed funds, and distributed $859,208 in unclaimed residuals since April 1, 2015.

The FMSMF will continue to put emphasis on finding musicians with unclaimed residuals, and we ask for your help in getting the word out. Please check the FMSMF unclaimed residuals list at FMSMF.org “Unclaimed Checks” to see if you or a fellow AFM member you know has unclaimed residuals waiting for them. In particular, as a reminder about AFM-covered sound recordings: If a covered sound recording is used in an AFM-covered theatrical or TV motion picture, the musicians who worked on that recording may be entitled to secondary market residuals. 

New Films

The count is in for FY 2016: FMSMF received residuals for more than 250 “new” titles! Most of these newly reported titles were films and TV shows first released in 2012, 2013, or 2014, although some were older films and series that generated secondary market receipts and residuals for the first time.

The new titles for FY 2016 included feature films such as Trumbo, Fifty Shades of Grey, Jurassic World, Furious 7, Max, Pixels, and Annie. Among the new TV titles reporting for the first time during FY 2016 were American Crime (2015), New Girl (2014-2015), Black Sails (2015), Empire (2015), Dominion (2015), Olive Kitteridge, and Bessie. (An entire season of a multi-episode television series is counted as one title). FY 2016 new titles are posted on the FMSMF website at www.fmsmf.org/filmtitles/new-films.php.

AFM’s 100th Convention

FMSMF is proud to be an exhibitor at the Federation’s 100th Convention. We look forward to meeting with members at our exhibitor’s booth, and being available to answer questions and provide individual assistance. So if you’re attending the convention in Las Vegas, please drop by and say hello!