Universal Settles Over ‘Best Little Whorehouse In Texas’ Home Video Royalties

“The policy of basing profit participation on 20 percent of home video revenues derives from the rise of VCR in the 1980s. The studios would pay independent companies to produce and distribute VHS copies of their films and would receive 20 percent of the revenue, which they would then divide out to the profit participants. When studios opened their own home distribution divisions, they continued calculating the profit participants’ earnings from 20 percent of the home-video revenues.”