Providing service and support to film and television musicians.

Introductory Letter from the Executive Director

Dear Motion Picture Music Community Member,

Thank you for visiting the Film Musicians Secondary Markets Fund (FMSMF) website!

When the FMSMF (a/k/a the "Fund") was created in 1972 by motion picture producers and the American Federation of Musicians (AFM), its primary purpose was to act as the agent of the Producers to distribute residual payments to film Musicians and pay necessary employer taxes and withholdings as required by law. As FMSMF has evolved, it now serves as a resource for motion picture professionals in addressing the various challenges to the industry, in addition to its main purpose of tracking, collecting and distributing residual payments.

As with the other major industry union and guild agreements (DGA, IATSE, SAG-AFTRA, WGA), the AFM Agreements provide for residuals if a theatrical film, TV program or new media program generates revenue in a "secondary" market. However, the Fund provides a unique service to the film and TV music community: for Producers, FMSMF shoulders responsibility for calculating and issuing each individual Musician's residual payment and paying required taxes and withholdings, thereby relieving companies from the time and expense of this complex work. 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's website provides information, resources and tools for both Producers www.fmsmf.org/producerresources/producers.php and Participating Musicians www.musicianresources/musicians.php.

As a separate 501(c)(6) nonprofit organization, FMSMF operates under the supervision of an Oversight Committee appointed by the Alliance of Motion Picture and Television Producers (AMPTP), and AFM liaisons appointed by the AFM President to consult with the Committee. FMSMF does not engage in collective bargaining on behalf of either Producers or the AFM.

How it Works: The Fund only receives contributions for residuals if a film, TV program or new media program has moved from its primary market to a secondary market and that secondary market generates revenue. Residuals are triggered only if a picture generates revenue in one or more of the secondary markets as outlined in the chart below:

Residuals collected by the FMSMF represent a small percentage (below 1%, after taking deductions specified in the AFM agreements) of the "distributor's gross receipts" from secondary market distribution of a film, TV or new media program. Residuals are sent directly to the Fund by signatory producers and/or distributors on a quarterly basis. Residuals collected during the Fund's fiscal year of April 1-March 31 are distributed to Musicians the following July 1st. Administrative costs for operating the Fund (e.g., legal, 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's title's contribution is allocated proportionally against the total contributions received during the year for all titles contributing in that year - "title" refers to an individual film or a season of a TV series. In turn, each musician's share within each title is determined by applying the percentage that his/her original wage 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 distribution is made each September to Musicians the Fund discovers were erroneously omitted from a motion picture's list of Musicians, or whose original wages were underreported to the Fund or who were previously unidentified.

FMSMF does its own research and reviews, but also depends upon the cooperation of Producers to assist in determining whether, and in what amount, residuals are due. FMSMF works with Producers to ensure all required payments are made, either directly or via reviews conducted by outside auditors engaged by the Fund.

A fillable form that producers or distributors can download and use to calculate the quarterly residuals that are to be remitted to the Fund can be found on this website, along with a guide to the secondary markets residual calculation form, at https://www.fmsmf.org/producerresources/calculation-form.php

Who Participates: "Participating Musicians" include not just the instrumentalists who played on the score, but also conductors, orchestrators, copyists, librarians and other AFM-covered positions. If a Participating Musician is deceased, his/her designated beneficiary (or beneficiaries) is entitled to receive his/her share of residuals. An important function of the FMSMF staff is to research, identify and contact those beneficiaries to effectuate the Musician's intent for his/her heirs and loved ones to benefit from the legacy of his/her work. For more information on ensuring your intended beneficiaries are registered with the Fund, see https://www.fmsmf.org/beneficiaryresources/beneficiaries.php. In addition, musicians who worked on a covered sound recording used in an AFM film or TV program picture may be entitled to share in the title's secondary market residuals.

Recent Activity: In the 2017 fiscal year, the Fund collected over $98.4 million in secondary markets residuals. 15,676 payments were distributed to participants in the July Regular Distribution and another 1,415 payments were distributed 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. Secondary market revenues, and the resulting residuals, for an individual title can vary -- from relatively modest to more significant -- depending on its success and marketability. Overall, secondary market residuals have grown in recent years and residuals from new media exhibitions of film and television programs have become a more significant share of the totals.

Generally, a film or TV program will generate most of its secondary market revenue activity within the first few years after initial release or broadcast. But some films and TV programs continue to generate revenue for many years: for example, new viewing outlets in need of content may emerge, a new installment of a franchise may revive consumer interest in an older title, release of a special anniversary edition or other events can spark renewed marketability of a title, etc. On this website you'll find a list of films and TV programs that paid residuals to the Fund over the years. www.fmsmf.org/filmtitles/paid-films.php

A copy of the FMSMF's most recent audited Annual Report is posted on www.fmsmf.org and can be found here: https://www.fmsmf.org/aboutus/annual-report.php

Whether you're a Musician, Beneficiary, Producer or Distributor, the Fund is here to support you by ensuring that the secondary market residuals collected are administered accurately and in a timely fashion and we are available to you as a resource on film and TV music related questions.

This website not only keeps Musicians and Producers informed of FMSMF activities, it also offers online services for Musicians and Beneficiaries to securely access accounts, update information and sign up for the fast and easy Direct Deposit / "Go-Paperless" options. FMSMF.org also provides information to Producers, such as Constructive Notices for obligated titles, various sample forms, and informational brochures.

Along with the staff of the Fund, I look forward to your feedback, suggestions and ideas on how we can do our part in supporting the music community that creates the movie and television scores that entertain and inspire audiences around the world.

Sincerely,

Kim Roberts Hedgpeth
Executive Director
Film Musicians Secondary Markets Fund

October 25, 2017

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