Netflix reduces payments for comic specials in some new offerings

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has become an important platform for comedians, funding a series of specials and offering them to its audience of over 220 million subscribers.

Now, the streaming giant is changing the way it offsets some of the comics it features, a move that could cut costs and pass some financial burden to artists, giving them more control over their work, people familiar with say. the situation.

In recent months, Netflix has started licensing new specials from some comedians for two years for around $ 200,000, instead of buying them outright, which is more expensive, people said. Previously, many comics received a lump sum payment, often up to $ 1 million, which helped pay for production costs.

The shift in approach to one corner of Netflix’s comedy stable reflects a broader move within the company to control spending as it faces new growth challenges. Netflix said it lost nearly a million subscribers in the June quarter, citing increased competition. The company told investors it plans to keep its content spending in the current $ 17 billion range over the next few years.

Netflix has invested heavily in comedy programming, becoming one of the leaders of the genre. His lineup includes special shows by the likes of “Fire Island” writer Joel Kim Booster, as well as Taylor Tomlinson, whose work includes “Quarter-Life Crisis” special and “Saturday Night Live” writer Sam Jay. .

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Many comics, such as Ali Wong and Hannah Gadsby, have received career increases from the success of their Netflix specials. Biggest Netflix comedy stars, like Chris Rock and Dave Chappelle, can get paid tens of millions of dollars for a special. Netflix continues to pursue some deals involving the creation and purchase of special stand-ups.

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Whitney Cummings, who co-created the sitcom “2 Broke Girls” and is currently on a cabaret tour, is among the comics that have entered into a two-year licensing deal with Netflix, according to people familiar with the comics. ‘agreement.

A spokesperson for Netflix declined to comment on the financial terms of the company’s deals with the comedians. He said Netflix continues to invest heavily in stand-up comedy. The new licensing approach is “another alternative path for comedians (at any point in their careers) to work with Netflix in response to the current market,” he said in a written statement.

The licensing agreements also offer more flexibility for artists who want the freedom to post clips of their content on social media, he said.

The new approach to comic deals is an example of how Netflix can tweak its financial terms with talent to save money while still pursuing new projects.

Comedy is a major genre for Netflix, and specials are relatively inexpensive to make, but typically aren’t as effective as blockbuster series in helping the company attract and retain viewers, people familiar with said. their performance.

Netflix co-CEO Ted Sarandos is a huge fan of the genre. Last spring, Netflix held its first in-person comedy festival, called “Netflix is ​​a Joke,” in Los Angeles, and in October the company will release a special footage at the event featuring comedian Gabriel Iglesias. Netflix claimed to have produced more than a dozen shows from the event, which included more than 300 comedians, and sold more than 260,000 tickets.

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Talented agents said Netflix has been willing to pay the highest dollar for comedy specials in recent years, even for those from lesser-known comics, which have prevented rival streaming services from capturing that content. The change in the structure of the agreements could open the door for other streaming services, such as Comcast Body

Peacock and Amazon Prime Video of Amazon.com Inc., to present offers to comedians.

Some stand-up comics have posted specials on YouTube, where fans can watch for free and comics can gain exposure and earn reduced ad revenue. Comedian Rosebud Baker, for example, posted her 2021 special “Whiskey Fists” directly on Comedy Central’s YouTube channel.

Netflix’s new deal structure presents pros and cons for artists. Under the licensing agreements, comedians will have to pay upfront for the production of their cabaret shows, people familiar with the terms said, which means they will bear the costs Netflix previously covered.

After a deal runs its course, however, those comedians will regain full control over their content and can use the material to promote future work.

Write Sarah Krouse at [email protected] and Jessica Toonkel at [email protected]

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