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The Coming Comp War at Netflix

dan lin
Netflix, like fellow streaming natives Apple TV+ and Amazon Prime Video, has been telegraphing for a while that big shifts are coming to its compensation system. Photo: Alberto Rodriguez/Variety/Getty Images
Matthew Belloni
May 10, 2024

If you ask me, the most interesting hire at Netflix in recent months hasn’t been Dan Lin, the much-heralded producer who now runs the film unit. It was an obscure yet well-regarded executive named Jun Oh, whose move from Skydance Media wasn’t even announced publicly. Oh ran business affairs and international for David Ellison’s company, and when he starts later this month, his title at Netflix will be head of business affairs, film. Pretty standard, but what makes Oh interesting is the mandate given to him, as well as to his B.A. counterparts in the television division: Change the way talent is paid by Netflix.

This shouldn’t be a big surprise. Netflix, like fellow streaming natives Apple TV+ and Amazon Prime Video, has been telegraphing for a while that big shifts are coming to its compensation system. Netflix currently “overpays” talent up front and buys out backend revenue. So stars get their quotes plus a hefty buyout to match what they might have made elsewhere in success. Producers are typically on a “cost-plus” model, meaning Netflix pays the cost of the movie or show plus a negotiated premium. I’ve written about this system a bunch, including its pros (cash money now) and cons (lots of singles and doubles… almost no home runs), and the fact that switching from contingent, incentive-based comp to a strictly fee-for-service economy shifts risk and can fundamentally change how creative people approach their work—potentially leading to less effort, and a worse product.