Walt Disney Company executives are looking at industry new media platforms Amazon and Netflix “per-point” compensation system as a model to replicate, that moves away from the backend, traditional reward model, that complicates moving content across platforms. Disney being a multiplatform company, tested-the-waters with this on their streaming platform, Disney +, last summer, and says this move is more about exploring distribution flexibility rather than streaming.
Traditionally profits for studios can come years after the original broadcast date when a show or movie moves off-network. That meant the studio was running a deficit for years while creators and producers received “backend” payments. For studios, moving to a “per-point” template means they can make a profit Day 1. They offer talent an upfront fee based on a backend rating system, this gives talent early payouts and ends “backend” payments. The current thought is this model works in favor of middle-level shows, while can hinder the high-profit returns for hugely successful shows (Modern Family).
There are concerns about how the valuation of the “per-point” model will be established, especially when wild-card shows like Friends or The Office pick up in popularity years after the show ends. But everyone agrees this is the future of the industry, as it is a way for companies that run content across multiple networks and streaming platforms to avoid potential litigation by creators claiming studios are self-dealing.
– Excerpt from an article for Deadline by Nellie Andreeva. Find the full article here.