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Translation: Hollywood was underpaying producers relative to the value they generated. Netflix saw an opportunity and signed deals with producers more in line

Translation: Hollywood was underpaying producers relative to the value they generated. Netflix saw an opportunity and signed deals with producers more in line with the value they generated. Because of this competition, Hollywood is now paying producers more. Sounds like an unequivocal good thing for film and television. Talented producers get paid more. More money is being invested in films and shows. Obviously, films and shows are making enough money to justify these deals.

Latteland 8y ago
It's a great thing for the real creative leader types. I've wondered if this would happen in software. Of course we are amazingly well off by the standards of most fields. I still feel based on the value we give companies that there is room for compensation to greatly increase. In the movie and tv biz, I think everything is basically unionized for regular crew and actors, so they have basic decent pay. Is there any down side to this?
- true_religion 8y ago
  Producers aren't really regular crew anymore than headline actors are regular cast, even if both pay union dues.
  - creaghpatr 8y ago
    Depends on whether or not they are above/below the line https://www.quora.com/What-does-above-below-the-line-mean-in-a-film-budget https://www.quora.com/What-does-above-below-the-line-mean-in...
- xiphias2 8y ago
  With the low interest rates cheap capital is accessible to selected companies. The cheap capital is used to acquire monopoly position instead of just competing for talent. I don't think the biggest problem is that software engineers are under-compensated. It's more like assets are overpriced, so we're not able to buy houses.
  - IMTDb 8y ago
    > It's more like assets are overpriced, so we're not able to buy houses. Do you realise that you can buy assets, and houses, outside of California ? I promise you that it's really really easy to buy a house as a software engineer.
  - colek42 8y ago
    I live in a 2000 sq ft house that cost less than my annual salary. Both Texas and North Carolina come to mind as areas that have pretty good opportunities for tech and very low housing costs.
  - thrower123 8y ago
    If you get out of your bubble, assets are very much not overpriced. If remote work wasn't such a dirty word, one could live in places where nice houses sell for under 100k and taxes are negligible.
- ummonk 8y ago
  >In the movie and tv biz, I think everything is basically unionized for regular crew and actors, so they have basic decent pay. Is there any down side to this? Well it seems like for average rank and file actors, directors have a lot of power of choice, which is how you end up with all the sexual harassment scandals that keep getting reported.
matt-attack 8y ago
Actually no. It’s a switch in the compensation model. Networks have traditionally paid producers using sizable backend deals. If the show does well they do well. Example: Larry David. Netflix in contrast never does backend deals that way. It’s all laid up front. It actually means that Netflix shoulders the risk upfront. So Networks are now simply switching to the upfront higher risk model where you eliminate backends and pay all upfront. You can’t say producers are “making more”, it’s just a different way to pay out. And again it’s a shift in risk management.
- kevin_b_er 8y ago
  We know that Hollywood cheats on the backend deals anyways in a philosophy known as "Hollywood accounting", so good on Netflix for offering straight deals not subject to the lying and cheating that Hollywood is known for via their accounting.
  - gruez 8y ago
    >We know that Hollywood cheats on the backend deals anyways in a philosophy known as "Hollywood accounting" is this still a thing? if the studio is promising $50k + 5% of "profits", but you know that's going to be $0 because of hollywood accounting (which everyone does), why would you assign that "5% of profits" any value? as a rational actor, you would see the compensation as $50k, nothing more.
    - sethammons 8y ago
      Last popular one I recall was Lord of the Rings, but I admittedly do not follow this stuff even remotely. Just recall a post, prolly on here, about it.
      - xenadu02 8y ago
        Point on the net are points on nothing. Everyone has known this for 20 years now, so all points are on the gross. As a result, Hollywood has started manipulating the gross numbers to hide money. The Lord of the Rings lawsuit was over the right to audit the books to detect such fraud. No studio will ever actually let you look at the books. Period. If you sue they’ll drag it out then settle.
natalyarostova 8y ago
Translation using basic microeconomics: Hollywood was paying the equilibrium clearing market price. Increased demand from Netflix raised the equilibrium clearing market price through innovation that requires production talent.

Latteland 8y ago

It's a great thing for the real creative leader types. I've wondered if this would happen in software. Of course we are amazingly well off by the standards of most fields. I still feel based on the value we give companies that there is room for compensation to greatly increase. In the movie and tv biz, I think everything is basically unionized for regular crew and actors, so they have basic decent pay. Is there any down side to this?

true_religion 8y ago
Producers aren't really regular crew anymore than headline actors are regular cast, even if both pay union dues.
- creaghpatr 8y ago
  Depends on whether or not they are above/below the line https://www.quora.com/What-does-above-below-the-line-mean-in-a-film-budget https://www.quora.com/What-does-above-below-the-line-mean-in...
xiphias2 8y ago
With the low interest rates cheap capital is accessible to selected companies. The cheap capital is used to acquire monopoly position instead of just competing for talent. I don't think the biggest problem is that software engineers are under-compensated. It's more like assets are overpriced, so we're not able to buy houses.
- IMTDb 8y ago
  > It's more like assets are overpriced, so we're not able to buy houses. Do you realise that you can buy assets, and houses, outside of California ? I promise you that it's really really easy to buy a house as a software engineer.
- colek42 8y ago
  I live in a 2000 sq ft house that cost less than my annual salary. Both Texas and North Carolina come to mind as areas that have pretty good opportunities for tech and very low housing costs.
- thrower123 8y ago
  If you get out of your bubble, assets are very much not overpriced. If remote work wasn't such a dirty word, one could live in places where nice houses sell for under 100k and taxes are negligible.
ummonk 8y ago
>In the movie and tv biz, I think everything is basically unionized for regular crew and actors, so they have basic decent pay. Is there any down side to this? Well it seems like for average rank and file actors, directors have a lot of power of choice, which is how you end up with all the sexual harassment scandals that keep getting reported.

matt-attack 8y ago

Actually no. It’s a switch in the compensation model. Networks have traditionally paid producers using sizable backend deals. If the show does well they do well. Example: Larry David. Netflix in contrast never does backend deals that way. It’s all laid up front. It actually means that Netflix shoulders the risk upfront. So Networks are now simply switching to the upfront higher risk model where you eliminate backends and pay all upfront. You can’t say producers are “making more”, it’s just a different way to pay out. And again it’s a shift in risk management.

kevin_b_er 8y ago
We know that Hollywood cheats on the backend deals anyways in a philosophy known as "Hollywood accounting", so good on Netflix for offering straight deals not subject to the lying and cheating that Hollywood is known for via their accounting.
- gruez 8y ago
  >We know that Hollywood cheats on the backend deals anyways in a philosophy known as "Hollywood accounting" is this still a thing? if the studio is promising $50k + 5% of "profits", but you know that's going to be $0 because of hollywood accounting (which everyone does), why would you assign that "5% of profits" any value? as a rational actor, you would see the compensation as $50k, nothing more.
  - sethammons 8y ago
    Last popular one I recall was Lord of the Rings, but I admittedly do not follow this stuff even remotely. Just recall a post, prolly on here, about it.
    - xenadu02 8y ago
      Point on the net are points on nothing. Everyone has known this for 20 years now, so all points are on the gross. As a result, Hollywood has started manipulating the gross numbers to hide money. The Lord of the Rings lawsuit was over the right to audit the books to detect such fraud. No studio will ever actually let you look at the books. Period. If you sue they’ll drag it out then settle.

natalyarostova 8y ago

Translation using basic microeconomics: Hollywood was paying the equilibrium clearing market price. Increased demand from Netflix raised the equilibrium clearing market price through innovation that requires production talent.