We all know that paper checks are a less-than-optimal means of payment — both for the person or entities issuing checks and the recipients themselves.
Now, picture the actor or actress accumulating screen credits. You know, everything from soap commercials to Star Wars sequels. Everyone from Ryan Gosling to innumerable bit players on innumerable Law and Order spinoffs. The one thing they all share beside dreams, grit and great hair? Residuals. Every time the TV plays one of those Law and Order spinoffs, every time a toothpaste commercial plays or a lightsaber duel lights up the screen, people get paid. By check. Lots of paper checks. Millions of paper checks. To get a sense of how inefficient the process is look no further than the fact that some of those checks can be quite hefty, but others can amount to pennies or even fractions of pennies, depending on the complexities of how residuals are calculated (and the calculations are indeed complex, and no one size fits all). Oh, and the checks take weeks to be cut and to be sent out, so there is always a lagging effect.
One firm, Exactuals, based in Los Angeles, offers a Software-as-a-Service model for payments and just announced this week that it garnered $10 million in Series A funding. As reported in a release by the company, funding came from a series of investors, led by City National and TTV Capital.
The money comes as the firm has inked a contract with the industry union Screen Actors Guild-American Federation of Television and Radio Artists, where the Exactuals’ signature PaymentHub platform is being offered to facilitate direct deposit to more than 160,000 members.
In an interview with PYMNTS’ Karen Webster, CEO Mike Hurst explained the guild’s processing of payments to members has increased in complexity. It has been the case for a long time that the residuals accrue every time something is shown across TV or onscreen, and there’s been a proliferation of media channels and services (“there are 10 HBOs now,” he noted, and there’s Netflix and even Amazon). So, that boosts the number of times, ways and days a given piece of media is shown. That, of course, leads to more payments — and more checks.
He offered the example of an actor on Seinfeld (perhaps you’ve heard of it), which runs pretty much all the time, and where hundreds of checks can start to accumulate. Getting them to the right person can be dicey, said Hurst, as actors are an itinerant bunch, change addresses a lot and change management frequently. So, the checks may never get to where they need to go. And there can be a lot of them, as many as several million sent out annually, where as much as 20 percent, said the executive, “are for $5 or less.”
Part of the pact with the guild has as its mission to limit the use of paper markedly, saving as many as 15 million sheets, while winnowing down postage fees, and direct transactions mean that payments are both faster and more secure. In the case of that hypothetical Seinfeld actor, said Hurst, instead of 200 checks being issued every 45 days, “why not do a direct deposit every Friday?”
Through the model provided by Exactuals, members can gain access to statements and activity through an online portal and can, in fact, search data through any number of criteria, such as what their “top roles” were over a given timeframe or even what channel or service — say, Netflix — has been the highest contributor to repeat showings or residuals.