September 9, 2024 6:00am PT

Flaws in Guilds’ Success-Based Streaming Residual Already Clear

The resolution of 2023’s dual strikes gave Hollywood TV creatives a first-ever bonus calculated by a show’s viewership
The formula was simple: Titles must hit the equivalent of views from 20% of a platform’s domestic subscriber base
Despite the seeming victory, determining which H1 2024 SVOD hits qualified — and which didn’t — was murky at best

When the Writers Guild of America and SAG-AFTRA emerged from their contentious contract negotiations last year, they held in hand a first-of-its-kind success-based residual payment for hit streaming content.

The guilds’ new contracts with the studios mandate an extra payout for titles that reach the equivalent of views from 20% of their platform’s domestic subscriber base in the first 90 days of their availability. It’s a high bar for qualification, to be sure, but the mere existence of the success provision was seen as a major victory for the unions, as were the required data disclosures that came with it.

If the first six months’ worth of eligible shows are any indication, however, there’s still a long way to go to make the residual a dependable source of income for many creatives.

Using data from Luminate’s Streaming Viewership (M) product, Variety Intelligence Platform’s new special report “The Postwar Streaming Market” shines a light on which streaming hits from H1 2024 qualified for the residual payout — and which didn’t.

The findings paint a dispiriting picture of the streaming TV market, with even some of the biggest hits of the year falling short of the 20% threshold. While blockbuster series including Netflix’s “Bridgerton” and Amazon Prime Video’s “Fallout” had no trouble getting over the hump, successes from smaller streamers faced more difficulty.

Case in point: According to Luminate data, comedy series “Ted” — Peacock’s most-watched original to date — achieved only the equivalent of views from about 14% of the SVOD’s domestic subs (24 million as of July 1, 2023, the contractual figure used for titles released between that date and July 1, 2024).

Even summertime marquee release “The Bear” Season 3 took nearly two months to cross the 20% mark, something “Bridgerton” S3 achieved in under 30 days with just four episodes.

With such issues already apparent, it should be clear that the residual model in future guild contracts will need to evolve. Doing so is necessary to create more sustainable economic conditions for creatives — and the industry’s long-term health.

CORRECTION: A previous version of this story incorrectly described the performance bonus calculation process for weekly-release streaming series. The bonus is applied to the full season, not individual episodes. Variety regrets the error.

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