I’ve talked to a few people about the strikes that are going on about actors and writers not getting paid enough. I’m not sure how any of the deals are structured between the video streaming services and the production companies and between the production companies and the actors and writers. From what I’ve heard, residuals from TV shows and movies were a reliable source of income. But nowadays, less people watch TV and residuals don’t seem to exist in the video streaming services. After giving it some thought, I feel like residuals could definitely be implemented in the video streaming services.
For one, the music streaming services already have a model to pay out content creators based on how often the content is played. If that is too simplistic, then a different approach could be figuring out how much time a user spends on content and distributing a percentage of their subscription fees or ad revenue to those creators. I think that the video streaming services have the data they need to implement this type of system. If not, they could implement it if they desired. It would definitely be a bit more complicated than the current system and the video streaming services would not earn as much profit. But, it may be fairer to the people involved in the production of the TV shows and movies.
Scenario 1: I pay a $10 monthly subscription to Netflix and I watch 1 hour of Love Island and 2 hours of Indian Matchmaking for the month. After Netflix takes a $1 cut from the subscription fee, the Love Island production company would receive $3 from me and the Indian Matchmaking production company would receive $6 from me.
Scenario 2: I watch TV shows and movies for free, but they have ads. I watch 2 hours of movie A and 2 hours of TV show B for a month. Let’s say that there is an average value of an ad and let’s say that it is equal to $0.10. I get shown 2 ads in movie A and 3 ads in TV show B. That sums up to be $0.50 for the month. After the video streaming service takes a $0.05 cut, the movie A production company would receive $0.18 from me and the TV show production company would receive $0.27 from me.
I had a brief thought that I would start a video streaming service with this type of payout scheme, but then I thought that I would need to figure out a differentiating factor for the user experience. This would be good for the content creators, but I don’t think it would make much of a difference for the people watching the videos. And besides, who needs any more streaming services to subscribe to, amirite?
I wonder how YouTube and other video platforms handle payouts to content creators. I know that the content creators get paid based off of ads and other factors, but if the users viewing the content are on a paid subscription that doesn’t have ads, do the content creators get paid the same or a different amount for that viewer?
Jeffrey's Thoughts 