Bye Bye Back End, Hello StreamingMay 1, 2019 – Article
The meteoric rise of Netflix has completely reshaped content production, distribution, and consumption in Hollywood.
For better or for worse, these changes are altering talent compensation structures and, as a result, affecting the practices of entertainment lawyers. Because Netflix utilizes a subscription-based business model, it cannot monetarily calculate the performance of any individual title. Unable to precisely determine a title’s performance, Netflix is unwilling and arguably unable to offer its talent an interest in the hypothetical profits that an individual title would realize, a marked departure from the standard practice in the entertainment industry.
To the extent talent would like a return to the pre-Netflix contingent compensation model, the onus will be on entertainment lawyers to craft back-end-like compensation structures for the streaming era.