SAG-AFTRA switches to automated residuals payments with a little help from Exactuals

By Emmanuel Legrand

US union for entertainment workers SAG-AFTRA announced that as of May 1, 2019, it will start automated residual payments to all eligible members nationwide, following a successfully testing of the residuals direct deposit process with local members across the country. SAG-AFTRA processes over four million residuals (payments from studios for the ancillary use of creative works) checks for 270,000 people per year.

  “SAG-AFTRA is very proud to be a leader in bringing this landmark process to fruition,” said SAG-AFTRA President Gabrielle Carteris. Actor and writer Sylvie Sadarnac ‏said on Twitter that "direct deposit truly is a game changer. Got my first batch recently and loved the convenience!"

  SAG-AFTRA said it had worked with a series of partners such as Los Angeles-based Exactuals, to put into place the infrastructure and run pilot programs nationwide "to ensure a secure, stable, and high-quality experience that will allow members to receive residual payments and statements quicker and easier than ever before."

Modernise payment processes

  Exactuals was founded in 2011 as a solution and service provider to help entertainment companies deal with film and TV residuals and ease the payment system between the studios, the guilds and the writers. "There has been a massive growth of transactions with the development of Netflix and satellite and cable channels," Mike Hurst, CEO and co-founder of the company, told Creative Industries Newsletter. "We were founded to modernise the payment process."

  The company started with several investors, including City National Bank as a minority shareholder. City, which already had clients in the film and TV businesses, eventually bought all the shares in August 2018 and Exactuals became a wholly-owned subsidiary of City. "The industry responded very well," said Hurst. "It gave confidence to clients."

  One of the main solutions provided by Exactuals is an SaaS (Software as a Service) platform, PaymentHub, to manage many forms of complex payments (residuals, royalties, marketplaces, etc.). PaymentHub helps payers to issue payments and give users access to a portal that outlines all the streams of payments, based on logs from the studios, in a timely and transparent manner. The system is fully secure with its own encryption algorithms. "The premises of our system is that it is secure," said Exactuals managing director for music Jack Cyphers.

Save millions in costs

  For SAG-AFTRA, Exactuals provided a solution through PaymentHub that enabled to end paperless payment of residuals. "Exactuals accepts data feeds from studios/payroll companies, standardises the data, and processes it through guilds," explained Hurst. In addition, Exactuals securely registers payees globally and then processes Direct Deposit payments at the guilds’ direction. This process will replace four million paper checks mailed to over 270,000 payees and will save more than 20 million sheets of paper annually, said Hurst.

  Hurst said the benefit for studios, payroll companies and guilds is that they will "save millions in costs while future-proofing residuals practices for the massive growth in residuals volumes expected over the next 10 years driven by expansion of streaming, cable, and OTT services."

  Over the years, Exactuals has also developed its own database of music works, with recorded music and publishing data. It has also created RAI or Royalty Artificial Intelligence, a system that helps through machine learning reconcile unmatched metadata. "If you acquire a catalogue with 50,000 tracks, RAI can help ingest all new data," said Hurst. The system, he added, could be of interest to the operator that will be picked by the US Copyright Office to run the Music Licensing Collective created by the Music Modernisation Act to manage mechanical rights in the USA. "We are discussing with the MLC and the AMLC [the two project competing for the role]," confirmed Cyphers. "Our technology can certainly help."