What does the Netflix-Warner deal mean for talent?
Last week, Netflix announced it was buying Warner Bros. in a massive $82.7 billion deal. The streaming giant’s acquisition will set Netflix, which already leads the streaming wars, even further apart from competitors, as it will also add HBO, a Warner subsidiary. But while the deal will further cement Netflix’s domination, questions are swirling around how it will impact viewers, as well as the talent platforms rely on.
Streaming platforms have recently undergone consolidation, creating three mega-platforms. According to a Forbes survey, Netflix is the most popular streaming service in America with 55% of Americans saying they use it, followed by Amazon Prime (51%), and Disney+ (49%). And, for talent, like actors and writers, the further consolidation of streaming platforms may escalate financial worries that have already been growing for some in the entertainment industry.
In recent years, a number of actors have openly raised concerns about fair pay, as streaming platforms began to change the game. While traditional broadcast series pay residuals for each re-airing, as a percentage of the actor’s salary, later agreements changed the way actors earned residuals entirely. The new formula was based around a predetermined licensing fee, rather than the number of re-runs. Netflix, which seemed to favor paying actors more upfront while rather than residuals may have been particularly guilty of underpaying talent. And there was no shortage of actors calling the streaming giant out.
A number of actors on some of Netflix’s most popular shows have spoken about their low-ball paychecks, having to keep their day jobs, or even pay for their own transportation to the set — a conversation which gained traction with the 2023 writer’s strike. Alysia Reiner, who played the warden Natalie (Fig) Figueroa, in Netflix’s hit series, Orange is the New Black, told New York Magazine in a 2023 interview, about the “risk” that actors took during the early days of streaming, saying that “the reward for Netflix does not seem in line with the reward for all of us who took that risk.”
Reiner continued, “I can go anywhere in the world and I’m recognized, and I’m so deeply grateful for that recognition. Many people say they’ve watched the series multiple times, and they quote me my lines. But was I paid in a commensurate way? I don’t think so.”
With the latest transaction under way, SAG-AFTRA addressed the reignited concerns around talent’s pay in a Dec. 5 statement, explaining that the consolidation “raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it.” The statement continued, “A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less. It must do so in an environment of respect for the talent involved.”
However, it seems like those things may not come without a fight, especially given how Netflix prefers to put big-budget films directly on its streaming service for subscribers, rather than opting for theatrical releases. That recent transaction has some groups, like the Directors Guild of America (DGA), already expressing “significant concerns ” over the development. In a Dec. 5 statement, the DGA said, “We believe that a vibrant, competitive industry — one that fosters creativity and encourages genuine competition for talent — is essential to safeguarding the careers and creative rights of directors and their teams.”
The DGA added that it will be meeting with the streaming giant “to outline our concerns and better understand their vision for the future of the company.”
Jon Shavitz, an independent filmmaker and writer living in Los Angeles, also addressed concerns around the deal in a recent blog post, writing that the experience of going to the movie theater is endangered as the giants take over, but it’s not because audiences don’t want theatrics, which, in his view, is utterly irreplaceable.
“Audiences still want the big screen,” Shavitz writes. “They still want the magic of the lights coming down and the quiet anticipation before the picture starts. They still want to gasp with a hundred people at the same time. You can’t algorithm that. You can’t stream your way out of that fundamental human appetite for an exciting theatrical-only event.”
Still, Shavitz tells Fast Company that the concern creators are feeling around financials, as well as potentially fewer jobs, is “fair.” He says that, simply, the streaming model “doesn’t work” as far as getting talent paid fairly. Still, the writer says he’s also hopeful that people within the industry “will fight to fix what’s broken,” noting that he believes the economics of deals such as this which don’t support talent, could ultimately “force a return to core business fundamentals.” By that he means an eventual return to the ever-evaporating exclusive theatrical windows.
As he writes in his blog, Netflix’s deal is an “overreach” that will force both those working within the industry, as well as audiences, to decide between “a streaming-only future for major release films, or working to restore the very thing that made cinema a cultural force in the first place…”.
Once the deal goes through, whatever happens next, Shavitz says, will be “up to us — industry and non-industry people alike — to fight for the theatrical experience.”
Fast Company reached out to Netflix for comment.