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this post was submitted on 12 Aug 2023
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So I've got mixed feelings on this. First off I'll start by saying the execs at Netflix, like execs in general, are vastly overpaid, and there's definitely room to cut from there to spend elsewhere. The thing I have trouble with is reconciling the streaming model of paying a fixed $XX a month for unlimited watching with paying out residuals. Residuals easily work out when you've got sales of items like tickets or DVDs/blu-rays or broadcast licensing to play at specific times where you can split up the fractions and work out who gets what ahead of time. With streaming, however, you can watch an unlimited amount. So does that mean they take the total time watched of all shows/movies and divide the $XX a month among those based on licensing agreements? How do you determine what gets a bigger cut?
It's kinda like how moviepass failed when they let you watch unlimited movies at the theater. In that case they were covering the cost of individual tickets and also physical theaters are much more expensive to run, but still there are issues with the "all you can watch" model. Another major issue is that there is so much content out there. Heck, most entertainment I get these days is from "free" youtube videos. You're going to get a lot less in residuals when you're competing with so many other sources of content. Execs and other higher-ups always got a disproportionately large amount of the pie, but on top of that, the pie is distributed among many more sources of entertainment.
I can't think of a more fair model than "sum up what the user watched, divide that across what they watched, distribute according to whatever agreements they have with those rights holders. At least then Netflix gets out of the business of being the bad guy.
"Hey if you don't think you're getting your cut, take that up with the network that sold us your show for pennies"
Why make the math so hard?
If the company is selling/lending their content to another, just give people a fixed % of the deal, agreed beforehand, basically like ownership shares paying dividends.
If it's first party, set an engagement metric or two (minutes watched or whatever) that trigger a bonus payment.