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Apple TV wants to pay actors and producers based on how their content performs

A hot potato: Apple TV is considering a new way to pay actors and others involved with making a movie or television series. The status quo in Holywood is to pay for a movie or show as if its success is guaranteed. An internal document reveals that Cupertino wants to shake things up by switching to a performance-based model.

Bloomberg notes that the memo stipulates that if a movie or show is successful, the production staff will receive bonuses. The idea is to use a points system to determine the amount of additional compensation. Apple suggests basing the bonuses on three factors – how many subscribers the show brings in, the amount of time viewers spend watching, and the cost of production in relation to the number of viewers. The crew of a top-ranking show could share a bonus as high as $10.5 million.

To address the elephant in the room: A plan like this does not just come as an added benefit to the production crew. Apple will undoubtedly ask actors and other staff to agree to a lower base pay with bonuses as an incentive to bring their A-game. Hollywood’s reaction to such a proposal is predictable, although the payment scheme would only apply to in-house Apple productions.

For now, the plan is in the early brainstorming stages. Apple has spoken with talent representatives and seeks feedback before developing anything solid. The Cupertino firm is not alone in its idea, either. Netflix and Amazon have reportedly worked on similar compensation terms for months, and Disney is already offering merit-based bonuses.

Show producers’ and actors’ knee-jerk reaction to such a payment scheme is rejection. They are used to being paid the same whether their work is a blockbuster or trash. However, not all in Tinseltown feel the same.

United Talent Agency chief Jeremy Zimmer and Producer Jason Blum have both made the same argument for merit-based pay: “When you get $10 million whether your show is good or bad, you have less incentive to do it well.”

“The good news is everyone is thinking about it and talking about it,” Zimmer told Bloomberg.

The idea makes sound business sense in most people’s opinion. Decrease production costs by paying a smaller upfront salary and offering bonuses proportional to sales. Almost every production-based business operates this way.

That said, Holywood is a different animal. There are a lot of risks involved with movie and television show production. Taking a gamble on a movie to release in a theater can be much more rewarding than working for Apple for a small cut.

However, for any of this to work, streaming networks must be less tight about their numbers. Most VOD networks don’t release meaningful statistics for people, especially producers, to compare. Industry professionals have to have access to these numbers, just as they have access to box office numbers, if platforms want the industry to accept their proposals.

“If we’re going to have a new system, they have to give us real numbers,” Zimmer said.

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