The film and television industry is at a crossroads, as it continues to face challenges from the competitive streaming landscape and mounting pressure to reduce debt and boost profitability. Loyola Marymount University Professor David Offenberg captured the sentiment succinctly: “Everyone is depressed, scared and looking forward to coming out of this industry contraction.” 

This pressure may drive streamers (and studios that own them) to continue exploring models that move away from substantial upfront buyouts to more flexible compensation models that combine fixed payments with some form of profit-sharing in film and television success. 

WHAT DO THE DEAL-MAKERS SAY?

GHJ’s discussions with key stakeholders who drive deal-making for talent have identified the effort by talent representatives to push for contingent compensation deals that resemble traditional profit participation terms. However, this effort may be challenging, as streamers may not want to give up their benefit of downstream third-party distribution by offering calculated bonuses and/or other benefits based on the overall success of the program as well as caps on the sharing of third-party licensing. While not the traditional model the entertainment industry is accustomed to, at least there is continued trending toward paying in success. 

At the same time, it appears there may be a shift toward more-attractive cost-plus deals after a downward trend in the past year. If this shift continues, it could be a positive sign for production companies and for the future. 

Moreover, it appears that content creators are taking more advantage of non-traditional platforms to share their content, most notably YouTube, which could generate sponsorship and advertising revenue sharing based on various factors and algorithm, which can work in favor of the creator.

There is not one clear solution to the current challenges in the film and television industry. But by staying attuned to these shifts, stakeholders can navigate the complexities of today’s market while positioning themselves for future success. 

To learn more about these trends or to discuss how they might impact your business, reach out to GHJ’s Entertainment Practice. With deep expertise and a pulse on the industry, GHJ is here to help clients chart a path forward in this evolving landscape.