Writers and actors spent the summer searching for increased residuals for streaming shows and they were somewhat successful. Both the WGA and SAG-AFTRA secured success-based bonuses for series at Netflix, Amazon, Apple, Disney+, Max, Peacock and Paramount+ as part of their shiny three-year agreements.

But what does it mean in practice? What shows will really nab the bonus checks? How much will they make and what comes next?

It’s clear that Netflix’s biggest series such as Stranger Things, Wednesday and Bridgerton will be rewarded under the new system. But sources and experts told Deadline that it’s likely that a number of other shows such as Peacock’s Natasha Lyonne-fronted Poker Face and Disney+’s Marvel series Secret Invasion starring Samuel L. Jackson would be close to making the cut through the revamped model.

On the other hand, it might be hard for shows on other streamers such as Amazon’s Prime Video to come close to the new targets given that the company has nearly 170 million subscribers, most of which are likely more interested in free shipping than watching The Peripheral.

These gains are just a start, according to SAG-AFTRA’s National Executive Director and Chief Negotiator Duncan Crabtree-Ireland, who told Deadline that the guild would look to negotiate lower barriers to entry for bonuses and greater transparency in future negotiations.

Both guilds set their sights on a success-based residual for streaming titles from day one of talks in an effort to address the dwindling payouts their members are receiving in the streaming era, but the Alliance of Motion Picture and Television Producers was reluctant to agree. 

The WGA’s contract, which was secured in September, included a bonus structure that would trigger an additional payment for any title that met a specific viewership threshold. 

While SAG-AFTRA, which is waiting for the results of its ratification vote December 5, had initially hoped for more, it ultimately agreed in its tentative agreement to a bonus structure similar to the WGA’s.

This bonus structure may not have been exactly what either union had in mind when they entered negotiations, but it’s a start.

“I would say the studios didn’t go hugely far with what they were doing. They kept it in some way in a box, and they kept it to a result that ultimately will not really pull in a huge number of shows,” one top agent told Deadline. “The splashiest of shows are really the ones [that will be rewarded].” 

HOW DOES IT WORK?

In order to be eligible for the bonus, a title must receive enough domestic “views” in its first 90 days to be equivalent to 20% of the streaming service’s domestic subscribers. “Views” are defined as the hours viewed divided by the runtime of a project, rather than the true number of unique accounts that interact with the title.

For the WGA, the credited writer for each episode will receive an additional 50% of their fixed domestic and foreign residual if the show meets the above criteria. 

For SAG-AFTRA, any title that surpasses the viewership threshold will trigger a payment to each principal performer equivalent to 100% of the fixed residual. However, the performer will only receive 75% of that payment. The other 25% will be funneled into a fund controlled by both SAG-AFTRA and AMPTP trustees to be distributed among the rest of the union’s members.

Since it was unveiled, this language raised questions as to how this fund would operate. As David Offenberg, entertainment finance professor at Loyola Marymount University, explained, “It could be used for literally anything that SAG does.”

By the guild’s estimation, the new bonus structure will yield approximately $40 million per year, translating to about $10M each year distributed through the fund. 

According to Crabtree-Ireland, the fund will be “for other actors who work in made-for-streaming content that’s exhibited on those same platforms.” But, per the tentative MBA, any performer who receives the success-based performance bonus themselves will not be eligible.

“The intent is to broaden this so that it’s not just the folks who worked on the most successful programs [who benefit], but also people who worked on other programs that are on the platform, but which maybe didn’t rise to that level of hit status that triggered the 20% threshold,” he told Deadline.

Distribution guidelines and eligibility will be determined by the trustees, once they are appointed. So far, SAG-AFTRA and the AMPTP have not discussed those specifics, according to Crabtree-Ireland.

WHAT SHOWS WILL BE REWARDED?

It’s difficult to determine exactly how many creatives will benefit from these performance-based bonuses, because the streaming services don’t currently release extensive viewership data.

Netflix only self-reports global viewership for its top titles weekly, so it is not possible to determine the size of the domestic audience for any given title. On the other hand, while Nielsen reports viewership data for the U.S., its weekly reports do not separate viewing by season.

There are the obvious winners like Stranger Things, Wednesday, Bridgerton, and basically anything that is among Netflix’s most popular titles of all time. But calculating which other shows might have met the threshold is trickier. 

Peacock’s Poker Face appears to be one such series eligible for the bonus. Based on Nielsen data from the series’ first two weeks of availability, the series tallied about 4.5 million “views.” This equates to around 15% of Peacock’s 28 million subscribers, which indicates that the series was able to surpass the 20% threshold by the time it had finished rolling out five weeks later. 

Disney+’s Secret Invasion, which per Nielsen managed about 7 million domestic “views” over its six-week rollout period, is another title that looks to have made the cut as that figure equals nearly 16% of Disney+’s 44.5M domestic subscribers with six weeks left to count.

However, it’s harder to calculate for other streamers. For instance, the only two Paramount+ originals to make it onto the Nielsen charts are Star Trek: Strange New Worlds and 1923. The Yellowstone spinoff was only on the charts for one week, not enough data to determine if the series would be eligible for the bonus. The Star Trek series released its second season this year and, since Nielsen doesn’t report data based on a single season, it is not possible to determine how much viewership came from Season 2, which is the season that would be eligible for the bonus.

During negotiations, the studios provided an evaluation of which projects would have qualified in the last year, according to Crabtree-Ireland, who told Deadline that SAG-AFTRA conducted its own analysis to compare with the studios’ and expanded the data to include content from the past several years.

“We think we have a handle on approximately how much money would be generated from this based on the number of shows that qualify and the number of performers,” he said. “It’s obviously not a fixed number, it’s going to depend upon how successful projects are.”

A CLOSER LOOK: WHAT IS THE POTENTIAL PAYOUT?

SAG-AFTRA calculates residuals by multiplying a performer’s total actual compensation per episode (up to an applicable ceiling) by two percentages — one to account for a streamer’s subscriber count and one that depreciates based on the number of years a title has been exhibited. The streaming bonus will include both the foreign and domestic residual.

The potential payout for titles will vary greatly, depending on the length of the program, as well as which streaming service it is exhibited on.

For example, to calculate the streaming bonus that a principal performer on Stranger Things 4 might have earned, you first determine the ceiling for total actual compensation. For this series, that is $4,698 for any episodes under 85 minutes long and $5,027 for those that are 85 minutes or longer, per the tentative MBA. Regardless of how much a performer makes, this is the ceiling from which residuals are calculated.

To calculate the domestic residual, multiply that amount by a subscriber factor of 150% for the largest streaming services. Then, multiply that by 45% for the first exhibition year. The total domestic residual is either $3,171.15 or $3,393.22, depending on the episode length.

The calculation for the foreign residual is the same, except the subscriber factor is 90% for the largest streamers. So, that residual is either $1,902.69 or $2,035.9 per episode, depending on the episode length. Together, those bonus payments would be $5,073.84 or $5,429.12.

Principal performers would then receive 75% of the total combined payout per episode ($3,805.38 or $4,071.84), and the remainder would go into the SAG-AFTRA/AMPTP-controlled fund.

The WGA uses a similar approach, having set residuals bases for programs that are determined by length. For Stranger Things 4, those bases are either $30,398 or $75,000. The studio will use those residual bases to calculate a foreign and domestic residual, and the payout will be half of both of those.

To calculate the domestic residual, multiply the residual base by the subscriber factor, which is once again 150% for the largest streaming services. Then, multiply that by 45% for the first exhibition year. That comes out to $20,518.65. Just like with SAG-AFTRA, use a 90% subscriber factor to determine the foreign residual. So, that residual is $12,311.19.

Since the performance bonus for the WGA is 50% of the foreign and domestic residual combined, that would come out $16,415. For the lengthier episodes, it would be $40,500. These calculations are based on the residual base if the story and teleplay are credited to the same writer. If they are credited to different writers, the residual for each drops dramatically.

— Katie Campione

THE START OF SOMETHING NEW

There is no doubt these deals will pave the path forward for a larger streaming compensation model for creatives and increased data transparency from the studios. However, as several experts point out, the terms are far from perfect. 

“I think the guild did a good job of opening the door. The reality is, guilds negotiate the floor,” an agent told Deadline. “It’s up to agents and talent representatives and everybody else to push through the rest of it. The streamers have been reluctant except in the highest level of deals and individual situations to do things like this.”

As of now, the performance bonus only applies to scripted, high-budget subscription video on demand (HBSVOD) titles, meaning there are plenty of other streaming titles that won’t be eligible including reality and low-budget titles, and titles made for ad-based video on demand services (AVOD).

Sorry, Jury Duty, Amazon Freevee doesn’t qualify. Neither would Netflix’s popular reality series like Love Is Blind or Selling Sunset.

For titles that do qualify, writers and principal performers will only be eligible for one additional payment, based on how the project performs within a relatively small window after release.

“If you look at the amount of compensation, it’s insanely small. This is effectively a second [fixed] residual,” Offenberg said. “It’s not even that the actors get a second residual, they get 75% of the second. These are going to be super small bonuses, and we’re going to hear from some [creatives] within the next year or two about the fact that they got the bonus and it’s pathetic.”

Netflix paved the way for this metric to be used, having released weekly hours viewed for its top titles for years. Recently, the streamer updated its self-reported metric to “views,” defined the same as it is in the guilds’ contracts — hours viewed divided by runtime. While it does give a broad understanding of how popular a series is, the metric comes with its own set of stipulations.

Most notably, it doesn’t account for completion rate, a valuable data point for the streaming services. Instead, the data assumes that every time a user watches a new piece of content, they make it all the way through every single time. This ultimately inflates unique views. In reality, it’s more likely that some users are watching multiple times, while many never make it to the end the first time. 

This is realistically not a number that streamers are prioritizing when determining success internally. Make no mistake, the studios are compiling extensive data behind the scenes for every title on a streaming service and assigning some sort of valuation to them, even if they are reluctant to actually share their process.

“It’s ironic that in a world where you actually have more information, we’re getting less information and less knowledge of what’s successful,” the agent said. “For all we know, in the streaming world, Stranger Things is bigger than any of the [shows] we used to call the biggest hits.”

However, average viewership is a metric that will enable audience comparisons across streaming and linear television, given that this is how Nielsen and other third parties report linear viewership. It also allows for continued comparison with Nielsen’s streaming data, which is reported in minutes viewed. 

“The reality is, there’s no perfect way to measure viewership. You don’t know how many people are in the room watching. You don’t know if they’re actually watching or if they’re folding laundry. We’re going to build human habitations on Mars before we accurately measure viewership,” Offenberg said. “It’s just not possible. Anything that they came up with was going to be fine. It’s better than using Parrot [Analytics] data or anything like that, because this is the real data from their platform.”

We’re going to build human habitations on Mars before we accurately measure viewership. It’s just not possible.”

LMU Professor David Offenberg

Then there’s the question about subscriber calculations themselves. For most of the traditional streaming services, agreeing on domestic subscriber count is relatively straightforward. But what about Amazon? All Prime subscribers have access to Amazon’s video streaming service, though that doesn’t necessarily mean they are using it. According to estimates, Amazon has about 168 million U.S. subscribers, which would set a nearly impossible threshold for any titles to achieve 20% viewership.

SAG-AFTRA and the AMPTP discussed the difficulty of determining the subs for bundled services like Amazon, and they agreed to go into arbitration “should an issue arise” in determining how many subscribers the service has. Deadline asked SAG-AFTRA for clarification, but the guild has yet to respond.

Even on the other streamers, 20% of domestic subscribers is a fairly high bar, and there are presumably not many made-for-streaming titles that would qualify. 

“In theory, there’s a breakpoint in there where you can have a series that churns along at a certain number of hours and it just kind of always stays below [the threshold],” one agent noted, adding that the deal is “imperfect” but opens the door for the guilds to negotiate a lower barrier and greater transparency in the future to help paint a fuller picture of success in the streaming era. 

“I would definitely hope for that,” Crabtree-Ireland told Deadline of plans for future negotiations. “That could happen in a variety of ways. The net could be wider by virtue of perhaps lowering the percentage of subscribers that a show has to get in order to qualify. The net can be cast wider by raising the percentage payments, so the money goes up, so we have more money to distribute in the bonus pool. There’s several levers that can help move in that direction, and I definitely would like to see that happen.”

SOLVING FOR ‘SUITS

Still, this new deal won’t reward all success. Licensed and/or acquired programming will not be eligible for the streaming performance bonus, despite being a buoy for every service as they build out their original libraries. As streamers have grown using libraries of acquired content, the money paid to creatives has tanked. 

“Broadcast residuals were based very much on success in that if the show got reruns, and if it got syndication, then those syndication deals continued paying residuals for years and years and years,” Offenberg said.

Case in point: Suits. The USA Network legal drama became the show of the summer when the first eight seasons dropped on Netflix in June. The series has spent months dominating Nielsen’s streaming charts and, as of the company’s last report, racked up more than 45 billion minutes viewed over the course of 18 weeks. Yet, creatives will still only be paid a small percentage of the licensing fee Netflix paid to NBCUniversal (which, considering that no one foresaw this success, was not very large). 

“Sometimes the value is the platform. In this case, the winner is the platform. So how do you find a way that regardless of who the winner is, that the clients are getting paid appropriately?” the agent said. “I think that’s really the next challenge is trying to fashion something that really matches what we’re dealing with today.”

Streamers have also enticed audiences with next-day streaming releases and, in some cases, made episodes available at the same time as (or even before) they air on linear television. HBO has operated this way for years, dropping episodes of Succession, Euphoria, etc., on streaming as they debut on cable. Showtime has also adopted a combined release strategy, offering new episodes of popular series like Yellowjackets on Paramount+ a few days before they air on the cable channel.

No matter how much viewership these titles bring to the streaming services, they will not be rewarded beyond the licensing fee paid to the studio. 

“It’s just more looking at the unique nature of streaming and finding some different ways to make sure that our clients are getting compensated for how the streamers are benefiting,” the agent added. 

THE TIP OF THE ICEBERG

This is not the end of the road for SAG-AFTRA or the WGA, both of which will likely try to move the needle forward on streaming transparency and compensation during the next round of negotiations in 2026.

And the guilds aren’t alone. Much of Hollywood is pushing for more information about how certain titles are performing on streaming. 

“We can’t make choices for our clients when we don’t really understand this,” one agent said. “That’s why I think the data point is huge. In some ways, it’s the biggest point because once we get to some common understanding or discussion around it, we can then fashion a model that makes sense around that. Right now, we’re kind of just making stuff up a bit to try to trigger some kind of gains in this area.” 

As Offenberg put it, this is only “the tip of the iceberg” in terms of what data the guilds would need in order to meaningfully put a price tag on success. 

“I think that this is more than anything a play for data transparency,” he said. “This was a way to negotiate to get them to hand over some data. It’s not perfect … but they’re getting data. And with that data, I think they’re going to be able to negotiate for much more in the years to come.”

Also Read More: World News | Entertainment News | Celeb News
Source: DLine

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Bonnie Raitt Once Explained Why She Chose Not to Have Children

Singer Bonnie Raitt’s successful career has received widespread recognition in the music…

CNN Report Captures Explosions in Ukraine After Russia Announces ‘Special Military Operation’

On Wednesday, a live report on “CNN Tonight” by CNN senior international…