Homemade
Netflix began to chart a new course with the production of its own original content, sensing that its novel distribution method would only be an advantage for so long, and that content would ultimately remain king. Leveraging its data on subscriber preferences, the streamer premiered its first original series, "House of Cards," in 2013. Since then, Netflix Originals have clinched 135 Emmy Awards. But, movies and shows have a short shelf-life, and replenishing the content bank remains Netflix’s biggest cost, with ~$9 from every $15.49 subscription going on content production or distribution of some kind.
Re-runs and residuals
The streaming model that Netflix pioneered has upended production in Hollywood and elsewhere. Netflix has reached a scale in which it seems to be sustainably profitable. The striking unions, however, aren’t so happy with the modern power dynamic — arguing that the new world is a much worse deal for actors and writers.
One core part of the strike negotiations revolves around residuals — the money earned by writers and actors when their work is reused, essentially a form of royalty payment. A classic example is how the stars of the iconic TV show "Friends" continued to rake in a staggering $20 million in 2015, over a decade after the show's final episode. In the heyday of cable TV reruns, this was the norm. However, streaming services have upended the traditional residuals model. Now, these earnings are often tied to more nebulous measures, like the streamer's number of subscribers, making it less dependent on whether a show becomes a flop or a cash cow.
