So, what’s a subscriber, anyway?
With the Writers Guild of America‘s interim settlement particulars revealed, the stakes are excessive on figuring that out. The guild’s take care of the Alliance of Movement Image and Tv Producers breaks new floor with regards to streaming residuals, with writers set to get wholesome bonuses if a specified success metric is hit.
“The success-based residual pays writers of streaming collection and flicks a bonus if the equal of 20 p.c or extra of a streaming service’s U.S. subscribers watch it inside three months of launch,” as The Hollywood Reporter’s Rick Porter defined it.
A “view” on this case means the entire viewing time divided by its working time, a metric that may be utilized pretty simply throughout streaming companies. Importantly, these success bonuses will rely not solely on the “view,” however on subscribers as properly. And that’s the place issues get difficult.
In some instances, the query of who counts as a subscriber is fairly simple. As of June 30, Netflix had 238.4 million world subscribers, and Disney+ had 46 million home subscribers. Their definitions of a subscriber is apparent and clear, and it’s probably that the majority of these subs use these companies frequently.
However some firms, maybe most notably Apple TV+, maintain their subscriber numbers near vest.
The actual complicating issue, nevertheless, is the bundle. Apple contains Apple TV+ in its Apple One bundle, which additionally contains cloud storage, Apple Music and different companies. Prime Video is included in an Amazon Prime subscription, even should you solely use Prime for the free transport.
These bundles elevate a thorny query: What number of of these subscribers are literally subscribers.
If each one who pays for Amazon Prime counts as a subscriber (together with 10s of thousands and thousands who in all probability by no means watch the video service), then these streaming success bonuses could also be close to unattainable to hit. Amazon hasn’t disclosed its present Prime subscriber depend in a couple of years, nevertheless it beforehand mentioned it had greater than 200 million.
With the WGA settlement seeing bonuses kick in at that 20 p.c threshold, the bundles result in conflicting incentives: A platform like Amazon or Apple might profit from the next quantity, which makes hitting the bonus threshold more durable. The guild advantages from a decrease quantity, making it simpler for its members to get their streaming success bonuses.
It’s an issue that the WGA is aware of, as web page 55 of the interim settlement notes. In a “Sideletter re: ‘Bundled’ Subscription Shopper Pay Platforms,” the WGA and AMPTP try and hash out the matter. Whereas within the 2020 settlement the WGA and AMPTP wrote that “in the end, the events reached settlement on the variety of home subscribers that sure of these platforms (e.g. Amazon Prime) will probably be thought of to have for the time period of the MBA,” that line was struck from the 2023 interim settlement.
That makes the next paragraphs (which specify that within the case of a dispute the WGA and AMPTP will have interaction in “good religion” discussions about subscribers and subscription tiers, and name for an arbitrator within the occasion that they can not agree) notably necessary.
Is everybody who subscribes to Apple One an Apple TV+ subscriber? Or ought to they solely depend people who have really used the service? Or that actively use the service? It’s an fascinating, however necessary query. (Apple, notably, doesn’t publicly disclose its subscribers for Apple TV+. And this deal gained’t change that however will give the WGA some perception into the service’s home subscriber base, even when its solely disclosed for functions of compensation for particular initiatives.)
And it’s a query that can turn out to be solely extra related over the course of the three-year deal. Many media firms are searching for to re-bundle video choices, both in a mega video bundle, or in a bundle with different companies (Spotify? The New York Instances?).
Warner Bros. Discovery CEO David Zaslav steered earlier in September that such bundles may launch sooner reasonably than later. “You realize, as we discuss to customers, they discover it troublesome, and so I feel one of many issues that we’re going to see as we glance into the longer term is bundling,” Zaslav famous. And after they do, the WGA and the studios should work out how depend these subscribers, now that there’s actual cash on the road.