Some of Netflix's biggest hits come from outside the US. International TV producers describe how streaming deals are structured and how the market is changing.
- How do international
TVproducers get paid when a show hits big on Netflixor another streamer?
- It's a complicated answer that depends on how the deals are structured for each show.
- As streamers focus on IP, producers are relying on fees starting at the cost of production plus 10%.
Netflix's heist thriller "Money Heist" originated in Spain and is being remade in Korea. "Lupin," the drama about a gentleman burglar, hails from France. And the murder-mystery drama "Who Killed Sara?" was made in Mexico.
So, how do international producers share in the wealth when a show like "Lupin" on Netflix or "Tehran" on Apple TV+ hits big?
It's a complicated answer that depends on how the deals are structured for each show. "Originals" is also a loaded term that can refer to shows licensed from third parties, coproductions with outside studios, and projects developed from the earliest stages with the streamers.
Outside of the Hollywood, producers serve in a similar role as US studios and usually retain the rights to their IP, which they can leverage to create merchandise or spinoffs when a show is a success.
But that's changing. Netflix and other global streamers increasingly want to own the IP for their originals so they can build them into global franchises.
Outside of rights, producers are typically paid for the cost of production plus a percentage on top of that, called a "production fee" or "cost plus." In the US, streamers may pay as much as 60% to 70% in production fees, one talent agent said. Internationally, the fees start at 10%, but can start higher in more mature markets.
The streamers are trying not to overspend on their international bets. But, since many streamers don't offer profit participation like movie studios do, there's also no direct mechanism in this model to pay talent when a show delivers unexpectedly big results.
"Netflix did a good thing by creating this platform, but they're not really paying anybody for the upside when it works," said the talent agent, who has negotiated with the major streamers on behalf of international clients. "If a show blows the doors off of audiences around the world, there's no additional compensation for the people behind those shows and I think that's a mistake."
Some of the producers told Insider that newer entrants like HBO Max and second-place streamers like Amazon have been more willing to negotiate on things like rights and production rates recently.
But one of the people said those services have to play ball because Netflix is more attractive to international producers.
"There is no bigger distribution deal in the world than Netflix," said Moises Chiver, a producer on "Club de Cuervos," Netflix's first Spanish-language original. "That's sexy for the producers, seeing your name around the world."
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