What are royalties?

What are royalties?

Royalties are the licensing fees that a producer pays to an author for use of the author’s intellectual property. Typically, royalties are calculated as a percentage of the Gross Weekly Box Office Receipts (GWBOR) of a production. The GWBOR is calculated by the standard definition incorporated into the Guild’s Approved Production Contract (APC), which specifies what deductions may be taken from GWBOR before calculating the royalties. Sometimes, royalties are paid based on Weekly Net Operating Profits (WNOP) instead of gross receipts. This type of royalty structure is called a Profit Pool. Under certain conditions, an author will receive a flat fee or a “per performance” fee.