We learned earlier this month that Apple was actively discussing a success-based bonus system for Apple TV+ talent – in which writers, actors, and directors would be paid less up-front, but receive greater rewards when shows proved popular with audiences.
A new report reveals some of the specifics of this, including the three criteria Apple would apply to determine who receives the bonus payments of up to $10.5M per season …
Previous report
The earlier report noted that there is a growing trend in the TV industry to restructure the way studios pay for shows, and that Apple was in discussion about a success-based payment structure.
Right now, all shows receive the same backend payouts based on duration. That is, how long a show runs for. Regardless of viewership or audience reach, a show that is recommissioned for a second season receives essentially the same percentage payout rewards as another show on it second season, under the current contracts.
Apple is purportedly discussing an alternative structure where backend payouts are more closely linked to success.
Three criteria, to share a $10.5M season bonus
Bloomberg has obtained details of the plan, and reports that three criteria will be applied.
Apple has already met with talent representatives to propose a new performance-based compensation regime, according to a memo that we’ve seen and conversations with several people involved. Talent would receive bonuses based on a points system; the size of the bonuses will be based on three criteria: the number of people who signed up for Apple TV+ to watch, how much time they spent viewing and the cost of the program relative to the size of its audience. People with one of the top three shows could share up to $10.5 million for a season.
The report says that Apple is currently seeking feedback on the proposal, so it may or may not be adopted in its current form.
If it does go ahead, it will apply only to shows directly produced by Apple; shows acquired from other studios will continue to be negotiated on current terms.
One thing Apple won’t want to do is publicly disclose the data it uses to calculate the bonuses, as that would reveal commercially sensitive information like audience sizes. The report says Apple won’t share raw data with anyone, but talent will be able to have its rankings audited.
Netflix and Amazon developing similar plans
Netflix and Amazon have also been working on similar plans of their own. They claim that by reducing the upfront costs of creating a new show, they can take bigger risks, and that linking financial reward to success incentivizes creators and talent to deliver their best work.
Reaction is said to be mixed, with some agents and actors said to favor the plan, while other are skeptical, viewing it as a cost-cutting move which will see reduced compensation for most.
But ultimately the potential for big bucks is likely to tempt the big names.
If you are directing a $5 million horror movie, you can release it through Warner Bros. or Universal and make a killing if it grosses $100 million. If you release it on Netflix, you might get $1 million on top of the production cost. Which deal are you taking?
Image: Apple
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