In Hollywood, the massive salaries major stars and directors receive when they agree to do a film for a studio are usually what makes the headlines. However, those stars and directors often make much more on “back-end” arrangements where they also get a percentage of box office take. For example, Robert Downey Jr. was reportedly paid $20 million to play Iron Man in Avengers: Endgame. But he’s made an additional $55 million because his contract also stipulated he got 8% of the film’s box office profit.
But when it comes to Netflix’s films, the company can’t offer major stars and directors a lucrative back-end arrangement since Netflix films don’t have a box office take (beyond the occasional few-weeks limited run in a theater so select films can qualify for major awards).
Previously this has meant Netflix paid top talent with upfront deals in order to secure the film rights to a movie. But this could be changing, reports Bloomberg. Now the streaming giant is reportedly considering paying top talent its own version of back-end deals. But instead of getting a take of the box office, which there is none, the talent would receive bonuses based on how well the film performed on the service—in other words, based on how many people stream it. Bonuses could also be had if the film went on to win major awards.
Netflix is changing the way it compensates major talent in order to keep top films coming to its streaming service as original content. The company is about to face a plethora of new streaming services, including Apple TV+ and Disney+, that’s to say nothing of its normal competitors, the major Hollywood studios that can offer top talent sweet deals for having their films premier traditionally in movie theaters.