Over the past year, the movie theater industry took quite the hit, leaving room for the video streaming on-demand market to take over. In 2020, the video streaming on-demand market size was valued at 50.11 billion streamers! Platforms like Netflix, Hulu, Amazon Prime Video, Apple TV, Disney+, HBO Max are currently dominating the industry. Each of these platforms allows their users access to the platform through subscription services, yet it is the content that they license that keeps the users subscribed. Netflix holds the title yet again for the world’s largest subscription streaming service with roughly 183 million paid subscribers worldwide as of March 2020.
With technologies like smart TVs and expanded access to these streaming platforms, the market is expected to continue to grow with improvement to video quality at a 21% rate from 2021 to 2028. But are the people creating the content profiting enough off of this? Filmmakers, content creators, producers, writers– the people who create the content– might need to deviate from the industry dominators to receive the compensation that they rightfully deserve. The current state of the industry is littered with corporate greed.
A Plagued Industry
When a streaming platform signs a deal with a content creator, there are lots of licensing deals involved and a ton of promised money. Licensing deals are established between the content owners and the platform to obtain the rights of the content to stream it – usually exclusively. Most licensing deals have things like back-end film earnings for talent built into these deals with the production studios & streaming services. Agreements can be for set periods or in perpetuity, which means they own the work for an infinite amount of time. Sure that all sounds like normal business, however, there is a problem for the content creators…
Companies like Netflix, for instance, will pull down content before back-end licensing payouts need to be distributed, canceling shows regardless of popularity, strictly for monetary value. This saves companies like Netflix a ton of money, letting them profit off of the content and get away free and clear without paying creators what they are rightfully owed. After say, two seasons of a show, it’s more cost-effective for Netflix to cancel the show, skip out on payments and move on to a new show. This cycle keeps on repeating over and over, leaving content creators crippled with limitations.
Once the show is created and streaming, Netflix doesn’t release rating figures in the same way as linear television networks. It’s been reported that streaming services determine whether to renew or cancel their shows based on a viewership-versus-cost-of-renewal review. This determines whether the cost of producing another season of a show is proportionate to the number of viewers that the show receives. However, filmmakers, producers, writers, etc are left completely in the dark on these decisions. There’s no backend pay for dollars grossed. These streaming platforms withhold their content activity data to remain in total control of the content. This prevents the creators from understanding how their content performed, literally leaving them out to dry.
By providing the creator with all the necessary resources to launch their project, it is extremely easy to be persuaded by this type of manipulation. Let’s say Netflix pays five hundred thousand for a licensing deal that lasts three months. How does that compare to how much a filmmaker could make at the box office? These upfront streaming licenses ultimately eliminate the ability for a filmmaker to receive any back pay for dollars grossed. Streaming platforms have yet to figure out how to make these deals with content creators amicable and profitable for everyone involved, or they simply don’t care…
So, you’re probably wondering, why do filmmakers even partner with streaming platforms instead of big production companies like Paramount? Partially the hype surrounding streaming platforms like Netflix and Hulu, but primarily because of these licensing deals that they manipulate from the start and problems that come with corporate funding. By manipulating content creators and providing them the resources they need to carry out the productions, these streaming platforms can close on deal after deal, however, the creators aren’t benefiting like they would from a box office.
In corporate environments, however, trying to secure funding for films is no easy task either. If you are looking for a large budget, it’s a nightmare. Often when producers take on corporate funding, they have to adjust their project vision to appease their funding partners. Corporations need to work in their advertising angles and make sure they are driving a narrative to meet their brand vision. If video-on-demand streaming is the projected future of entertainment, there has to be a better solution to benefit the creators.
Is there a sustainable solution?
There are plenty of companies that are working on solutions to these problems that exist in the streaming world, but most in a very disconnected fashion.
One notable project that ties all of these loose ends together is Vabble. Vabble is an all-encompassing solution to the problems that are currently plaguing the film industry. With their production launchpad, the team aims to make it easier for filmmakers to secure funding, execute their project vision how they see fit, AND provide a platform where viewers can watch, enjoy, and share the film with friends and family across the globe.
Vabble Launchpad will allow production companies to receive funding directly from potential viewers on the funding front. This option can create a snowball effect: users who invest in the production are more eager to promote it to others, generating more views and revenue for production companies and creators. Introducing such a new monetary system can inject new lifeblood into the streaming and content production scene.
That solves one problem. What about the corporate greed issue with back-end earnings? Vabble has built its product utilizing blockchain technology. Smart contracts and the $VAB ecosystem will allow talent to continuously earn their fair share of the project in perpetuity. $VAB token can be used for everything from funding film projects on the launchpad to tipping their favorite actors or shows to ordering takeaways from their favorite restaurants. It truly is an all-encompassing solution.
With such a plagued industry, it is refreshing to see a few companies in the space aim to take action on the underlying state of streaming. A much-needed renaissance in the film and streaming world.