by Kim Roberts Hedgpeth, executive director, Film Musicians Secondary Markets Fund (FMSMF)
The Film Musicians Secondary Markets Fund (FMSMF) once again hit a record high in residuals collected for musicians in Fiscal Year 2019 (fiscal year ending March 31). Secondary market residuals, which were established by the AFM’s Basic Theatrical and Basic Television Agreements and are collected by the FMSMF, have grown over the past 10 fiscal years—from $76 million in FY2010 to $115.7 million in FY2019, representing an increase of almost 51% during that period.
The continued growth of contributions collected by the FMSMF during the past several years is driven by two major factors: Increased collection compliance activity by FMSMF staff and outside attorneys to recover residuals that were not voluntarily paid by obligated companies; and a steady growth in residuals generated by the release of films and TV programs into digital platforms, such as SVOD. In fact, the growth in residuals from the release of “traditional” content into “new media” platforms is the major driver of the increase in residuals since FY2010. Residuals attributable to secondary market exhibition on these new media platforms has offset the decline in residuals generated by secondary market release in DVD format during the past 10 years.
Secondary Market Residuals Increase Support to the AFM Pension Fund
FY2018 was the first fiscal year in which FMSMF forwarded a payment to the AFM-Employers’ Pension Fund (EPF) as required by the AFM Basic Theatrical and Television Agreements. This payment represents 1.5% of the residuals collected plus the FMSMF’s interest earnings for the year, and is sent to the EPF in order to support its health and funding status. During FY2019, almost $1.3 million was sent by FMSMF to the EPF to bolster the pension plan’s funding. The continued growth in secondary market residuals, if sustained and expanded in the future at levels consistent with the experience in recent years, will benefit all pension fund participants.
FMSMF received residuals for more than 250 new titles during FY2019. “New titles” refers to titles paying into FMSMF for the first time. Most of these newly reported titles were films and TV shows first released in their primary market in 2016, 2017, or 2018, although some were older films and series that generated secondary market receipts and residuals for the first time during FY2019.
The FY2019 new titles include feature films such as Blackkklansman, Crazy Rich Asians, Tag, and A Quiet Place, and television series such as Young Sheldon (’17-’18), Orville (’17), Designated Survivor (’16-’17 and ’17-’18) and New Girl (’18). An entire season of a multi-episode television series is counted as a single title. A complete list of the FY2019 new titles is posted on the FMSMF website at www.fmsmf.org/filmtitles/new-films.php.
Investing in the Future
FMSMF has embarked on a major system-wide redesign to its information systems and business processes. FMSMF has been operating on a database infrastructure that dates back to the fund’s origins in the 1970s, when FMSMF was a small operation managed out of the EPF’s New York City offices. With the growth of the FMSMF’s operation, the increase in the amount and types of residuals it administers, the increasing number of participants it serves, and the advancements in technology since the FMSMF established its stand-alone operation in Los Angeles in 1999, the time has come to take bold steps to move FMSMF into the future. This multi-year upgrade project is designed to bring the fund’s data systems and attendant business operations forward to better serve participants.
Just a few of the many improvements sought through the new system, which is estimated to go live during 2021, include improved and more functional interfaces for participants enrolled in online account access, increased residual contributions for participants through expanded collection activity, as well as faster resolution of unclaimed residuals and musicians’ film inquiries. The investment made now to modernize the FMSMF’s operations and systems will benefit today’s participants and future generations of AFM musicians.
There were 610 musicians credited with residuals for the first time in FY2019: 528 musicians as a result of work on original scoring sessions and 82 first-timers as a result of “new use” of prior union-covered sound recordings in a film or television program. Hundreds of new musicians are added each year as FMSMF participants because they were credited with residuals for the first time.
FMSMF continues to provide information to its participants via FMSMF’s e-newsletter Music Notes, which is emailed to participants several times each year. In addition, we have increased our social media presence with the recent launch of our exclusive YouTube channel. Our expanding social media presence includes updates on FMSMF’s community relations partnerships with Columbia University, ASCAP, SXSW, and the American Film Market. If you’re a FMSMF participant, we hope you will subscribe to Music Notes, and whether or not you’re a participant, we hope you’ll keep current on FMSMF activities by following us on Facebook, Twitter, YouTube, and Instagram!