Facing Increased Competition, Netflix Explores Paying Filmmakers’ Bonuses for Awards, Big Viewership

IndieWire | 9/21/2019 | Staff
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Filmmakers, actors, and producers have come to expect largely set-rate paychecks for projects at Netflix. But now the streamer is exploring paying bonuses for films that win awards or pull in a large number of viewers as a way to lure good projects away from competitors.

The plan, reported by Bloomberg this week, is a new take on traditional deals that have studios giving filmmakers and actors a cut of a film’s box-office grosses once the movie crosses a certain profit threshold.

Returns - Investment - Netflix - Form - Movie

But returns on investment at Netflix don’t come in the form of movie tickets. For the streamer, the best investments in original movies are ones that win awards or entertain a large number of its subscribers — reminding them why they’re paying a monthly bill.

The idea of Netflix finding a new model for compensating talent that’s used in lieu of box-office bonuses came up during the company’s Q2 earnings call in July.

Model - Success - Officer - Ted - Sarandos

“We have to figure out a model that, in success, how would they be compensated?” Chief Content Officer Ted Sarandos said. “The fact that it’s guaranteed, there’s some discount applied for that. And in fact, if it’s paid out over a quicker period, there will be discounts applied for that. But ultimately, we want the economics to be pretty neutral or at least are similar to what they would be if they had a big hit film in the theaters. And that’s what we negotiate film-by-film, talent with — actor-by-actor.”

Bloomberg, citing people familiar with the strategy, reported the bonuses would depend on the project and that Scott Stuber, head...
(Excerpt) Read more at: IndieWire
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