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This summer’s biggest Hollywood attraction is a multi-million dollar battle between two of the industry’s best-known actors: Scarlett Johansson and Disney. Johansson sued Disney last week over the day and date release of his Marvel superhero movie Black Widow, which put the film on Disney Plus the same day it hit theaters, potentially robbing it of a huge box office-infused paycheck. The aftermath has been chaotic, but most of all it shed light on the myriad of ways streaming has forever changed the way we experience movies and the implications for the creatives and talent who make them.
Film contracts have traditionally been negotiated around box office results, with significant bonuses tied to a film’s performance. It worked well for talent and studios. Studios saved a large amount of money up front and weren’t risking spending big on a flop, while actors, producers, and others involved in a movie could look at the box office results to see exactly what. that their production was worth and be paid accordingly.
But with the move to streaming things had to change. Actors and producers working with a streamer like Netflix typically receive a fixed fee, said an industry lawyer who negotiates contracts for top talent. The edge. (The lawyer asked not to be named in order to speak freely on the matter.) If they are lucky enough to have significant leverage, they could also potentially get a bonus payout which is a contractual dollar amount. paid over months or quarters. But it’s not performance based like box office bonuses are. Netflix often pays that pre-negotiated amount in eight quarterly installments after a title’s release, the lawyer said, while Apple tends to pay a bit faster over 12 months.
Because the space is changing so quickly, part of this lawyer’s role in contract negotiations now is to “read the tea leaves and plan where the business is going.”
The old way of negotiating talent gains has changed rapidly. According to Johansson’s complaint, the terms of his Black Widow The release was initially finalized in 2017 – early enough that Disney Plus wasn’t announced, and Johansson’s team obviously didn’t think there was a need to negotiate the terms of the streaming. His contract specified Black Widow would debut with a “wide theatrical release”, but that it would be exclusively the theater seems to have been only an understanding.
While actors now know they have to negotiate streaming terms, it’s harder to determine their value than just researching box office revenue. Streaming services keep their performance data extremely close to the chest, and they’re hesitant to share engagement and revenue details on specific titles. Data that is shared is often opaque, obscured, or without context as to how the success (or failure) of a title has been measured by the respective streamers.
“I don’t see Netflix wanting to share how its subscriber base is growing and what its audience is anytime soon,” the attorney said. “But we would like to see it.”
This is one of the reasons why industry analysts who spoke with The edge expressed the need for greater transparency not only from Disney but from all streamers on performance data for titles on their platforms. Without it, it is difficult for talent to defend itself in negotiations in a rapidly changing streaming landscape, argued Karie Bible, a media analyst at Exhibitor Relations Co. who spoke with The edge by telephone.
“Streamers are, for the most part, damn non-transparent about numbers, breakdowns, demographics,” Bible said, adding that this information is not only crucial for analysts, but also for agents, managers and lawyers. , which have traditionally traded based on box office performance. This lack of transparency from streamers can lead not only to mistrust, but perhaps even more to what the Bible has described as “creative accounting” by companies that are not forthright in contract negotiations. And that could potentially mean lost income for talent.
Another thing to consider is that the success metrics for each streamer are, on the whole, unclear. Box office numbers provide a clear picture of a film’s performance against its budget and expected ticket sales. But with streaming, none of us really know what a win looks like – huge viewership, new registrations, repeat views – unless the company tells us a movie was one.
“I think we need to understand this trial in the context of redefined success metrics for any film on the market today,” said Daniel Loria, senior vice president of content strategy and editorial director of Boxoffice Pro by phone. . “Sadly, we all don’t know what this success means in the streaming age – not just the COVID era – but streaming as a whole.”
Like Bible, Loria added that it was probably frustrating for people in the entertainment industry who could benefit from titles produced by streamers but who don’t get enough transparency on the data and apparently concocted metrics of success from. arbitrarily, which may vary by company and department. This could cause renowned talent to think twice before committing to these types of agreements, or at the very least to demand clauses protecting their income in the event that the launch of a film is modified by a studio adjacent to streaming.
“If the industry wants to redefine the parameters of a movie’s success, it has to be on the same page on that definition,” Loria said. “And it seems right now that every studio follows a different set of rules and different metrics on what is successful financially and what is not.”
From now on, the negotiations will not proceed in the same way for all the actors. Streaming services are willing to shell out more for talent if they believe the production is likely to generate subscriptions to the service, the Hollywood attorney said. The edge. That in itself presents plenty of opportunities for talent eager to join a production that can be a direct streaming release, as we’ve seen take place on services like Netflix and Apple TV Plus.
“I think in our business, high-end talent has always had leverage and will continue to have leverage,” said the lawyer. At the same time, the lawyer pointed to a “maelstrom” of two important influences, COVID-19 and a new era of streaming, which has complicated contracts negotiated before either.
Whether Johansson’s lawsuit is settled out of court is less important than what we’ve learned from Disney’s response: Streaming services are intentionally obtuse on how owning every piece of production, including releases. , and an insatiable appetite for the influence of streaming is impacting the entertainment industry. No one really knows what success looks like today, and it’s hard to know who wins and who loses. Unless streamers make this data more transparent and available, the people who make the things we watch are entering negotiations blindly. And ultimately, what’s bad for streaming is bad for viewers.
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