The Sticky Question of Residuals: Could Netflix Have the Answer?

 Has there been any more contentious issue in the entertainment industry this year than that of residuals? One potential solution to this thorny issue lies in the success-based residual metrics already employed in parts of Europe- ironically, and most notably, by Netflix themselves. Brandon Blake, entertainment lawyer Los Angeles from Blake & Wang P.A, takes a look at this most unusual development.


The European Model

Where European copyright legislation and Netflix meet, there could be middle ground. Netflix has already established several collective streamer residual agreements in European countries, from France to Germany, and Scandinavia. These agreements offer additional compensation to creators for well-performing content. However, the level of transparency regarding compensation details remains a concern for both unions and streamers.

 

It’s no secret that European entertainment markets are more heavily regulated than others, with EU law mandating regional content quotas and financial support for local productions. While the sticky issue of residuals still looms on both sides of the Atlantic, undoubtedly more progress has been made in Europe in implementing success-based systems. Conversely, U.S. writers and actors receive fixed annual payments for their streaming content, a concept European guilds are (ironically) trying to incorporate into their contracts.

Imperfect Inspiration

In many of these territories, payments have only recently begun to be distributed, and the model is far from perfect, raising some uncertainty among agents and industry professionals. In a nutshell, once titles reach a specific viewership threshold, payments start.

 

Of particular note is France's unique remuneration system, based on clicks within specific regions. It focuses on views in France, Luxembourg, and French-speaking Belgium and operates independently of global metrics. Netflix, Prime Video, and Disney+ have all signed similar agreements in France.

Could similar success models be a way forward out of the deadlock? The battle for fair compensation continues in Europe and around the world, with each region seeking unique solutions to address the concerns of creatives and content creators. However, there’s one thing for certain- they’re working better than the sticky mess of the US landscape currently. Perhaps it’s worth taking another look at them for inspiration.

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