Apple Considers New Payment Equation for Originals on Apple TV+; Will it Lead to Fewer Shows on the Streamer?
A new report suggests that Apple will move to more incentive-based payouts for streaming shows that attract bigger audiences.
There was a moment in Hollywood where big-name TV creators could essentially count on a streaming service to attempt to woo them away from broadcast or cable with an eye-popping contract. Shonda Rhimes departed ABC in 2017 after getting a deal worth at least $100 million from Netflix, and when streamers’ stock prices were on a trajectory to the moon despite balance sheets that showed they lost huge sums of money every quarter, such deals were par for the course. But in 2024, investors are no longer interested in sinking big sums into streamers that can’t show they’re also healthy, profitable businesses, and that has providers rethinking the way they offer creators content deals. A new report from The Ankler indicates that Apple TV+ is mulling changes to the way it offers new deals for original shows and movies, and The Streamable’s experts will offer their thoughts on what the proposed shift could do for the streamer’s release schedule.
Key Details:
- Apple is thinking about moving to a deal structure that rewards shows with bigger viewership.
- Currently, Apple deals pay according to a show’s longevity.
- The new deal structure could cause Apple to greenlight more shows that will draw a large audience, even if they don’t live up to the same rigid quality standards enforced by the streamer.
The Ankler’s report indicates that Apple may decide that going forward, its TV deals will reward viewership instead of longevity. Currently, Apple TV+ shows all receive the same backend payments based on duration. Two shows that get season renewals will essentially make the same percentage payout as each other, regardless of whether one has a massively larger audience than the other.
Instead of that system, Apple could choose a payout schedule that rewards shows that draw larger audiences in. This data won’t become public knowledge; outside of its top-10 list, Apple TV+ is as secretive about the viewership metrics for its shows as it is about its subscriber total. But it would allow for content creators who unleash massive hits on Apple TV+ to see a better payday going forward.
Incentive-based payments from streaming services were a big issue at the heart of the 2023 SAG-AFTRA and WGA strikes, so it makes sense for Apple to pivot to this strategy. It would lead to smaller upfront payments, but would likely allow writers and producers to make more in the long term.
Will Change in Commissioning Strategy Change the Type of Shows that Apple TV+ Makes?
Since its launch in 2019, Apple TV+ has followed a strict philosophy of making quality original shows and movies. Only this year has any crack in that veneer appeared; in early March, Apple began importing a selection of movies created by various other studios like Warner Bros. Discovery and Paramount. Those titles have gotten good engagement on the streamer, suggesting that perhaps the quality-over-quantity approach can be softened somewhat.
Switching to a new payout system for upcoming shows and movies could be an indication that Apple is willing to take more chances on shows and movies. If it’s lowering the amount it owes to writers for shows up front in favor of viewership-based incentives on the backend, it can afford to gamble on some projects it may otherwise have passed up on.
On the other hand, some creators might be more reluctant to do business with Apple if they feel they won’t get an adequate check up-front. The quality of a show itself isn’t the only factor that decides if audiences watch it or not; advertising budgets, on-platform visibility, and a score of other variables are part of the equation as well. Will Apple be able to convince big-name producers that they’ll make more over the course of the life of their show on Apple TV+ than they will by selling it to Max or Hulu instead?
There are potentials for both realities if Apple does change the way it offers creators new TV deals, and it may decide to keep its commissioning structure as it is for the time being. The Ankler reports that the idea has been warmly received by agents and talent so far, so if viewers do see a change in the types of content offered on Apple TV+ in the future, they’ll have its shift in tactics for paying content creators to thank.
Apple TV+
Apple TV+ is a subscription video streaming service for $9.99 a month that includes high-quality original shows and movies including Best Picture winner “CODA,” popular sitcom “Ted Lasso,” and dramas like “The Morning Show” and “Severance.” Apple TV+ is also home to MLB baseball games on Friday nights and MLS Season Pass.