Why will Streaming stop writing blank checks to creators?

Why will Streaming stop writing blank checks to creators? – Five years ago, the all-out war between platforms brought with it onerous contracts for some of the most famous creative directors.

By Megan Sauer

The industry’s shift toward profitability has put an end to this trend: even showrunners will have to tighten their belts.

The word austerity has been running parallel to the streaming business for a year and a half. It has affected staff, original production volume and the speed of international expansion. And yes, also to investment.

The platforms’ content spending has always been in the spotlight, even when the winds of prosperity were blowing and nothing seemed to threaten the growth of their customer bases.

The pandemic, the economic crisis that followed, the emergence of competition and the demand for profitability have created an unfavorable breeding ground for certain investments, such as those that for years were intended to ensure the linking of showrunners to the platforms exclusively for several years.

It all started with Shonda

Shonda Rhimes changed the rules of the game. The year was 2017 and Rhimes was a sought-after showrunner, with several successful shows on the air (such as Grey’s Anatomy and Scandal ).

Netflix managed to seduce her with a contract that was rumored to be around nine figures, an astronomical amount in exchange for working for them exclusively for five years. The move didn’t turn out badly for either the creator or Netflix. From the Shondaland mine has come, for example, the Bridgerton franchise, one of the most successful programs on the platform.

The question everyone asked at the time was why Rhimes had decided to leave Disney. Apparently, an unfortunate comment from an executive at his former company was the final straw in his relationship with ABC.

Then she also declared that she was very seduced by the creative freedom that the platform guaranteed her, as well as the abundant resources that were made available to her. On Netflix you could do things that were unthinkable on free-to-air television .

For the company it was a triumph. That a successful showrunner decided to be contractually linked to a new medium for several years sent a very powerful message. The platforms were a solid and valid alternative to television.

And it had consequences. Shonda Rhimes took the leap of faith that paved the way for many creators to flee to platforms. This ultimately contributed to the perpetuation of practices that would later lead the writers’ union to go on strike .

The end of blank checks

With a market that is looking closely at the accounting books, it is logical to understand why the platforms no longer see advantages in being the fishing grounds for talent.

If that entails astronomical salaries and financing pharaonic projects, often unviable for the traditional sector, especially if it takes into account that the platform distribution model reduces windows to a minimum.

Blank checks to showrunners have not only ceased to make sense within the framework of a generalized savings strategy.

The platforms, furthermore, are in a completely different place than the one that Netflix, the great promoter of this practice, justified in the beginning.

Such signings, which burned money in spades even when it was in negative treasury because, as Julia Alexander points out, “it needed to demonstrate that it could be the home of showrunners.

Furthermore, it was assumed that part of the audience would follow the creator to his new home. The Streaming wars further accentuated this race to acquire a portfolio of top-level creators, which exaggeratedly raised the amount of the agreements.

Nowadays, with a consolidated business and a lot of competition, having an exclusive creator is just one more factor of the many that make up the value proposition of the service, such as price, functionalities or the available catalog.

Now the sector prefers to include some risk control in contracts. This explains why there is “a greater emphasis on overall deals being productive, with compensation based on the execution of successful projects rather than payment up front,” as Todd Spangler explains in Variety.

In addition to the agreements that have been suspended due to the strike, it is likely that many of the talent whose contracts with platforms have just expired (such as Rhimes herself or Ryan Murphy) will not receive the financial proposals they had five years ago.

The current streaming model is a far cry from the economic and limitless paradise of its origins. Users began to take notice last year, with the implementation of measures such as ad-supported plans, restrictions on shared accounts, and price increases.

Now it is the creators’ turn to tighten their belts as well.