The tentative agreement reached between actors and Hollywood studios after a four-month strike includes a big nod to the streaming era.
As part of the contract, actors on hit streamed shows would get far bigger bonuses. Previously, these types of performance-based payments, which could be substantial for movies released in theaters and for traditional TV shows, were negligible for actors on even the most popular streaming programs.
This represents a significant step forward for actors, whose work is increasingly produced by or for streaming services. Early in the strike actors from popular streamed shows on the likes of Netflix shared on social media the small size of their streaming residuals. Many of those actors wondered how shows that were either critically acclaimed or hits with viewers (or sometimes both) could pay them so little. Kimiko Glenn, who had a supporting role on one of Netflix’s first original series, Orange is the New Black, was among the first to go viral when she shared a TikTok video showing a foreign residual check that amounted to $27.30. Breaking Bad star Aaron Paul said he hadn’t earned any money from Netflix carrying the show, for which he won three Emmy awards.
Streaming companies, which have quickly gained a major foothold in Hollywood, have closely guarded their viewership data. They have often reported metrics like subscribers, but they have rarely offered glimpses about which shows and movies are most popular on their services. In recent years, some streaming services like Netflix and Max, owned by Warner Bros. Discovery, have begun releasing top 10 lists, but even those are comparative and don’t show detailed viewer numbers. In the past, Hollywood relied on third-party measurement companies like Nielsen to provide ratings to gauge, among other things, how much actors and writers should earn in residual payments. However, with streaming, that money largely doesn’t reach actors.
Residual payments were established in 1960, the last time both the writers and actors went on strike simultaneously. During that strike the two unions negotiated a framework for contemporary residuals. Streamers technically pay residuals, but they are much smaller than an actor would earn for television reruns or DVD sales.
In the tentative agreement with the actors union, the studios agreed to a data transparency clause for evaluating residuals. Streamers would have to share data including the total number of hours users spent watching individual shows in the U.S. And abroad, and the running time of the program in question. That data will still be kept private and be subject to confidentiality agreement, according to a summary of the contract.
Actors would also be eligible for a $120 million streaming bonus fund that would provide $40 million annually to them during the three-year contract. In the current agreement. Actors on streamed shows would earn a bonus if the show was watched by more than 20% of the platform’s total viewers within the first 90 days of release. If a show meets the threshold, 75% of the payout would go directly to the actors. The remaining 25% would go into a fund jointly administered by the actors union and studios to be disbursed at a later date on whatever they decide. Fran Drescher, president of SAG-AFTRA, the actors union, acknowledged only “a thimble worth of shows” would benefit from the new arrangement.
Securing additional payments for even just the most popular streaming shows was a major change, Drescher said at a news conference last week. “It’s what we said in the beginning to them [the studios],” she said. “It didn’t matter the mechanism, it didn’t matter the amount. What mattered was that we got into another pocket—and we did.”
The tentative agreement will be voted on by the actors union’s full membership starting on Tuesday and ending Dec. 5.
While the contract represents significant gains for actors in terms of receiving payments from streaming services, the union did fall short of its initial stated goals. It had originally asked for a 2% of streaming service revenue, then dropped that number to 1%, then proposed a per subscriber fee that would have amounted to 57 cents per user. Netflix’s co-CEO Ted Sarandos called that “a bridge too far.” Included in the initial offer of a per subscriber payment to the union was the proposal of a jointly managed fund to administer payments, which ended up in the tentative deal, albeit under different terms.
During her news conference Drescher said she initially had doubts about whether SAG-AFTRA had made sufficient gains for its members. But when she considered that the union had established a new precedent for the industry she was reenergized. “Suddenly I started to get my mojo back,” she said, realizing the current deal opened the door for further gains in the future.