As Netflix emerged, we all applauded the innovation it brought. For creators and talent, it was new and refreshing. No advertising to interrupt the flow of the programs. Full-season orders to allow you to tell a complete story. No ratings or opening box office to torment. But all of this came with a significant trade-off: premium up-front fees for creators in place of true ownership and participation in the long-term upside of success.
The rest of the streamers followed suit. They, too, insisted on owning 100 percent, and it seemed a fair bargain. Create content for an ad-free, exclusive global platform like Amazon and Apple, in perpetuity. Receive more up front to replace the upside that historically came from multiple revenue streams and windows, like syndication.
But now the game is changing again. Streamers like Netflix and Disney+ are rolling out ad-supported tiers this year on the very same content they promised would live on an ad-free environment. And it won’t be long before some of that same “exclusive” content will be licensed to other platforms or broadcasters.
Nothing underhanded is going on. The times are changing, and businesses must adapt. Consumers want lower-cost options. Streamers want better profit margins. Marketers want to reach audiences on these platforms. New twists on older models only make sense. Does it really maximize value for Netflix to have every season of Bridgerton exist solely on its servers forever? Is it fair to imagine Apple TV+’s The Morning Show would be a great future addition to a network or cable lineup?
Streaming economics are reshaping the creative process and the overall ecosystem of Hollywood. There are new opportunities for creators — and more room for an expanded universe of stories to connect with far-flung audiences. But some important things have been lost along the way — including clear, consistent and transparent performance metrics that can help measure success.
For the creative community, what’s needed boils down to accurately measuring how well an individual show or film is doing against others — and an increased level of compensation for those creating outsize value.
Forging a deeper connection across storytelling, performance and compensation should yield long-term benefits for everyone involved, including the audiences we do this all for. We all want to see the culture-defining films of the future that will be born on streaming. And even with today’s incredible breadth of content, it’s remarkable that so far there is no next generation of beloved, long-running series like Friends or The Simpsons or Modern Family, that can live across multiple platforms for decades. Streaming audiences clearly love this kind of comfort viewing, and we need to ensure the long-term incentives are there to promote and sustain this kind of art.
We’re in a moment that will define what comes next in entertainment. Backend incentives have been flagged as an issue in upcoming guild negotiations, but the conversation goes much wider than that, encompassing every aspect of creation and production.
Let’s not wait for the dialogue to become rancorous and destructive to everyone. Let’s create the right forum for all sides of our industry to explore a new framework. Let’s all go back to the future together to come up with solutions that address the rapidly changing worlds of film and television — and the central role of creators and talent in building its underlying and enduring value.
Jeremy Zimmer is the CEO and co-founder of UTA.