Tag Archives: Residuals

FMSMF: Secondary Market Residuals Are Indispensable Part of Musicians’ Financial Security

Since we last reported to you, the world has continued to change. Fortunately, the Film Musicians Secondary Markets Fund’s (FMSMF) commitment to the work of collecting and distributing the secondary market residuals that are so critical to the lives and livelihoods of working musicians is unchanged.

As working film/TV musicians are aware, with the onset of the pandemic the Fund took the extraordinary—and one time —step of issuing its “July” distribution on May 22, more than a month earlier than originally scheduled. Over $99 million was distributed to almost 17,000 participants, just as work in the industry ground to a halt. The Fund’s urgency in issuing this early distribution reflects our recognition that secondary market residuals are an indispensable component of working musicians’ financial security, and the security of their families.

The annual distribution of supplemental market residuals from the smaller Live Television Videotape sub-fund, which covers programs such as Saturday Night Live, The Tonight Show, and other programs produced under the AFM’s Television Videotape Agreement, was issued on schedule on July 1. The Fund distributed approximately $1,076,000 to 1,587 participants in that distribution.

With those two main distributions completed, work resumed on distributing “re-issue” payments to musicians or their beneficiaries who had unclaimed residuals waiting at the Fund. Since July 2020, we have distributed a little more than $919,000 in unclaimed residuals to 196 Fund participants.

Keeping Eyes on the Road Ahead

During the first six months of Fiscal Year 2021 (April 1, 2020 to September 30, 2020), collections remained on pace with Fiscal Year 2020, with a little over $58 million collected as of September 30, 2020, as compared to $57.3 million collected as of September 30, 2019. The Fund will continue to monitor closely the pace of collections through the remainder of this fiscal year, to assess whether the slowdown in production during calendar 2020 has a trailing effect on the residuals collected between now and March 31, 2021, the end of the current fiscal year.

As we have continued to observe, the slowdown of production and closures of movie theaters because of the pandemic have accelerated the shift by companies to invest more in content made directly for digital streaming services, and specifically to their own streaming services. As we have also observed, these changes in the business paradigm could have a significant impact on musicians’ residuals. Although the Fund does not participate in the negotiations between the AFM and the Alliance of Motion Picture and Television Producers (AMPTP), the Fund will carefully observe the outcome of the 2021 theatrical and TV negotiations, which should also be of keen interest to every recording musician.

New Films for Fiscal 2021

Despite the slowdown in current production, the Fund has continued to receive residuals for pre-pandemic films and TV programs that are reporting residuals for the first time. As of the halfway mark of FY2021, almost 150 “new” titles reported to the Fund. Among the titles that have paid in for the first time in FY2021 are theatrical films such as Alita: Battle Angel, Bad Boys for Life, Just Mercy, Birds of Prey, Da 5 Bloods, Motherless Brooklyn, and others. In addition to receiving residuals for the most recent seasons of TV series such as Black-ish, Blue Bloods, Chicago Fire (and Med and PD), whether it has been driven by the pandemic or not, we also have observed that companies are pulling older series out of the vault and licensing them for secondary market distribution. In the past six months, the Fund has received first time residuals for seasons of vintage TV series such as Star Trek: Voyager (1990s), Moonlighting (1980s), and Columbo (1970s), among others.

Please Keep Up to Date

Please make sure that your beneficiary information is up to date with the Fund. In recognition of the difficulties for musicians in finding notary services in the current environment, until further notice, the Fund will accept non-notarized Beneficiary Designation Forms so long as valid proof of government-issued identification such as a driver’s license or passport is provided. You can find more information about the Fund’s beneficiary policies on our website at www.fmsmf.org/beneficiary or email us at participantservices@fmsmf.org with questions.

We strongly urge all Fund participant musicians to enroll in the Fund’s Go-Paperless program. Given the recent pressures on the US Postal Service, some of which may have lasting effects for months or years to come, it is in the best interest of all participants to ensure their residuals are received through safe, instant, and secure Go-Paperless/Direct Deposit. For more information on how to enroll in Go-Paperless, please visit www.fmsmf.org/faqs/pstart.php.

The Fund is committed to providing prompt and courteous service to participants throughout these challenging times, despite working at reduced capacity. Please note that responses to correspondence sent to us by US mail may be delayed. The best way to reach us is to send your questions or concerns via email to participantservices@fmsmf.org. And please visit our website at www.fmsmf.org and our page on Facebook for updates on Fund information.

On behalf of the Fund, we extend our sincere wishes to all members of the AFM and their families to remain safe and in good spirits. Each of us on the Fund staff wish you and yours a peaceful and healthy holiday season and a far better 2021. We are here to support you, and stand united with the community of professional musicians as we all work through the times ahead.

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!