If you've ever walked past a film shoot, it's easy to see how much more there is to the movies and TV than just the star and director. There's often dozens or even hundreds of other people involved in the production — bit players, stunt performers, musicians and more — and they all have to be paid, at times irregularly and under different rules.
"It's easy when you think about a big star getting one big check," said Hernan Hernandez, senior vice president and corporate development and special projects at City National Bank in Sherman Oaks, Calif. "But there are really a lot of other small checks."
City National just participated in a $10 million funding round for Exactuals, a Los Angeles-based company that offers a software-as-a-service platform for complex payments, specializing in entertainment ventures. The funding followed Exactuals' signing of a new payment contract with SAG-AFTRA (Screen Actors Guild-American Federation of Television and Radio Artists), two large unions that cover the entertainment business.
The contract is designed to remove paper and processing complications for residuals through digital transfers and direct deposit. Because of the complexity of these payments, the transactions are still mostly check-based and manually processed, and the companies hope to reduce the time and costs associated with the sort of legacy payroll processes most industries shed long ago.
"The dynamic is you often have one owner or one content creator and 10 to 15 different groups paying this person for his or her work," said Mike Hurst, CEO and co-founder of Exactuals. "Or you can have an actor who has worked on various projects over the years and is still getting different residuals from different sources."
Another use case is a studio or TV pilot that gets "green lit," or chosen by the network or studio for production, Hurst said. Getting picked up turns an idea into a small company with a full staff who will be drawing payments and potential residuals, creating a snarl of potential headaches for the studio that's overseeing the project, he said.
"If a TV show gets $20 million in funding, there could be 2,000 people that have to get paid," Hurst said. "That's a heavy layer of reporting."
Exactuals registers payments data for payees on behalf of the payors, such as a studio, record label or other content producer. Using its portal, PaymentHub, Exactuals uses the payor's rules to aggregate payment data and distributes payments through City National Bank. Its partnership with the bank predates City National's new investment. Exactuals will use the investment to further develop its technology, and also enhance its brand in an industry where "cred" can be a substantial commodity.
"Our customers are the giant unions and the big studios, and we're taking care of their data and moving hundreds of millions of dollars. Having City Financial behind us finally is going to make a big difference with the industry," Hurst said.
Exactuals is claiming a domain expertise as part of its business model. Entertainment workers are similar to contract workers since they don't work steady jobs with twice-monthly paychecks. But there are differences from "
"I suspect [the challenges] don't exist in other markets, which widely use electronic payments for payroll and general disbursements already, and where the focus is more on the management software," said Gareth Lodge, a senior analyst at Celent, who said that where these challenges do exist, finding a way to automate the process can be beneficial.
"Having a system that works to the nuances of a particular industry makes it more attractive for them to make that switch," Lodge said. "That should have a knock-on effect. Once the users see the benefits, and have a positive experience, they are more likely to swap to other electronic nonpaper solutions."
