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VIRAL EXCLUSIVE
Oct. 23, 2024
Netflix's Commitment to Talent Compensation Model
Netflix remains steadfast in its talent compensation approach, prioritizing upfront payments to mitigate financial risks for creators and maintain its competitive edge in attracting premier talent.
US - Netflix co-CEO Ted Sarandos has
reaffirmed the streaming giant’s commitment to its current talent compensation
model, dispelling industry rumours of an impending shift. Speaking during
Netflix’s Q3 earnings call, Sarandos stated, "We think we have the right
model and we’re not looking to change it". This declaration comes amid
ongoing speculation that Netflix might adopt a more traditional compensation
approach, which typically involves lower upfront fees with profit participation
once certain thresholds are met.
Sarandos
emphasized the benefits of Netflix’s existing model, which pays talent upfront.
He noted that this approach allows creators to focus on producing the best
possible content without financial risk. “Netflix takes all the financial risk
so [creators] can focus on making the best possible version of what they’re
working on,” he explained1. This model, according to Sarandos, has been
instrumental in attracting top-tier talent to the platform.
Despite the
firm stance on maintaining the current compensation structure, Sarandos did
acknowledge that Netflix is open to more bespoke deals where talent is
interested. However, he pointed out that such arrangements are rare because
most talent prefers the upfront payment model.
The co-CEO’s
comments were part of a broader discussion on Netflix’s financial performance
and strategic direction. The company reported $9.83 billion in revenue for the
third quarter, marking a 15.7% year-on-year increase1. Looking ahead, Netflix
forecasts revenues of approximately $38.9 billion for 2024, with an expected
increase of 11%-13% in 2025.
Sarandos also
addressed questions about Netflix’s limited theatrical release strategy,
reiterating the company’s focus on adding value to its subscribers by making
content available on the platform without long delays. He highlighted that
Netflix’s top films each garnered over 100 million views, underscoring the
platform’s ability to deliver significant audiences for filmmakers.
