Netflix has taken a significant step forward in its engagement with the creative community in Germany, as the streaming giant has agreed to introduce performance-based royalties for artists and professionals involved in its local series productions. This innovative approach entails compensating both on-screen talent and behind-the-scenes contributors, such as directors, cinematographers, actors, editors, make-up artists, set designers, costume designers, and sound designers.
The central premise of the agreement revolves around rewarding creatives based on the performance of the series on the Netflix platform. In addition to the regular wages provided by production companies, talent will receive supplemental royalties, the amount of which will be determined by the number of streams generated by the series.
The mechanics of this compensation structure involve two primary components: success-based additional remuneration for each season of a series and a portion of Netflix’s secondary exploitation revenues. The latter entails a distribution of a collective amount to all entitled parties, ensuring that various contributors benefit proportionally from the series’ accomplishments.
To trigger the fixed remuneration, the series needs to achieve a viewership threshold of 10 million global “completers,” referring to households that have watched at least 90% of a season. Remarkably, even if this threshold is not met within a specified timeframe, creators and performers will still receive a proportional share of the fixed amount based on the viewership achieved.
Amidst the prolonged strike in the USA, this has come as a relief to the entertainment industry. Now even the lower strata of workers in the entertainment industry will get royalties, it won’t just be limited to the big actors.
Although this is a very small start. Netflix and only Netflix Germany has started this ritual but we hope to see more of it.