Going paperless enables media companies to keep pace with the rapidly growing volume of payments without increasing headcount or budget, according to Mike Hurst, CEO and co-founder of Exactuals, a Los Angeles-based payments company that focuses on residuals and royalties.
The “problem in a nutshell” with residuals is that the film and TV industry “sends about 5 million paper checks a year, that volume is growing very rapidly, [and] the amount of money for which the payments are written continually shrinks,” he said May 23, during a breakout session called “Paperless Payments: Stop Lighting Money on Fire – Direct Deposit Residuals and Participations Now Available Industry Wide” at the annual HITS Spring event.
There’s a few reasons for that, including new media, “updated rules in the collectively bargained agreements that allow for more content to be exploited, and it’s because the whole world over now has 300 cable channels … and at least 30 percent of what every country wants to watch is Hollywood content, which means we’ve got to pay the residuals and participations at home,” he told attendees.
And “there’s a lot of waste” involved at every step of the paper processes, he said. The industry often spends more to send and support a paper check than the amount the check is written for, while uncashed checks either need to be canceled, replaced or escheated to the state, according to Hurst. Meanwhile, reporting and support are convoluted and manual.
Therefore, “we knew the industry really needed an end-to-end paperless solution to make it quicker and easier to pay and quicker and easier to support, and that is what PaymentHub is,” Hurst said of his company’s paper-free payments solution for residuals, participations, payroll and other industry payments needs.
PaymentHub is highly secure and features an online portal for studios, guilds, payroll companies and talent, he noted. Exactuals also set up a data standardization service for guild reporting and support.
“We did a broad launch in April to every member” of the Screen Actors Guild (SAG), “so all 160,000 members have been invited to register and thousands already have,” Hurst said, adding there’s been “unanimously positive feedback” and “we’re really happy with the deployment.”
As a result of all those positive results, “our numbers are going through the roof,” he told attendees, adding “we’re doing millions of dollars of payments on a monthly basis now” through the company’s relationship with Entertainment Partners (EP), “so the system is bullet-proofed and ready for scale.”
Studios integrating directly with Exactuals typically save more than 60% on payment costs and associated labor, according to the company. Studios can now integrate directly with Exactuals or via its partnership with EP.
Exactuals has “evolved quite a bit” from its early days and now has more than 50 full-time employees and has processed more than $200 million in entertainment payments – much of it music royalties, Hurst noted at the start of the presentation.
The company has a 20-year agreement in place with the SAG-American Federation of Television and Radio Artists (AFTRA), he pointed out, adding his company’s 20-year agreement with EP, which has invested in Exactuals, has also been significant.
“We’re a safe bet” now, he said adding it’s remained an “agile tech company,” but now one with the benefit of a “trillion-dollar balance sheet behind us.”
HITS Spring was presented by Entertainment Partners, with sponsorship by LiveTiles, 5th Kind, Amazon Web Services, Birlasoft, Exactuals, Expert System, MarkLogic, Microsoft Azure, Richey May Technology Solutions, SoftServe, Spark Digital, Avanade, CDSA, Cinelytic, EIDR, MicroStrategy, Signiant, the Trusted Partner Network, human-I-T, and Zaszou IT Consulting.
The event was produced by the Media & Entertainment Services Alliance (MESA) and the Hollywood IT Society (HITS), in association with Women in Technology: Hollywood (WiTH); the Content Delivery & Security Association (CDSA); and the Smart Content Council.