Earlier this month we learned that Apple was actively discussing a success-based bonus system for Apple TV+ talent, in which writers, actors, and directors would be paid less upfront but receive greater rewards when The programs will prove popular with the public.
A new report reveals some of the details of this, including the three criteria Apple would apply to determine who receives bonus payments of up to $10.5 million per season…
Previous report
The previous report noted that there is a growing trend in the television industry to restructure the way studios pay for shows and that Apple was discussing a success-based payment structure.
Right now, all programs receive the same backend payments based on duration. That is, how long a program lasts. Regardless of viewership or audience reach, a show that is brought back into service for a second season receives essentially the same percentage of payout rewards as another show in its second season, under current contracts.
Apple is reportedly discussing an alternative structure in which backend payments are more closely tied to success.
Three criteria for sharing a $10.5 million 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 we’ve seen and conversations with several people involved. Talent would receive bonuses based on a point 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 watching, and the cost of the show relative to the size of its audience. People with one of the top three shows could share up to $10.5 million per 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 goes ahead, it will apply only to programs produced directly by Apple; Programs acquired from other studios will continue to be negotiated under current terms.
One thing Apple won’t want to do is publicly reveal the data it uses to calculate bonuses, as that would reveal commercially sensitive information such as audience size. The report says that Apple won’t share raw data with anyone, but talent will be able to audit their rankings.
Netflix and Amazon develop similar plans
Netflix and Amazon have also been working on similar plans. They claim that by reducing the upfront costs of creating a new show, they can take on greater risks and that tying financial rewards to success incentivizes creators and talent to deliver their best work.
Reaction is said to be mixed: some agents and actors favor the plan, while others are skeptical and see it as a cost-cutting measure that will reduce compensation for most.
But ultimately, the potential to make big money is likely to tempt the big names.
If you’re directing a $5 million horror movie, you can release it through Warner Bros. or Universal and make money if it makes $100 million. If you release it on Netflix, you could get $1 million on top of the production cost. What deal are you accepting?
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