The streaming industry once considered itself a disruptive challenger to the ancient entertainment business practices. But now that the industry is mature, a rebel is taking on financial responsibility. Latest examples yes Apple TV+, which is moving to a new performance-based compensation model. Anker's report. Not surprisingly, Apple TV++'s model sounds awful, like the way Hollywood uses it to run, with some modernization.
Apple Studios will now use a score and ranking system to rate the new season on three key criteria: subscriber acquisition, engagement, and cost efficiency. If, if Ted Lasso It is the first title to watch over 30 seconds in the first week of registration, and it helps with the acquisition. Engagement depends on the total number of minutes during the season run, which has become the industry standard for “views”. Cost efficiency depends on budget divided by participation. According to Ankler, these three metrics will rate performance in a calendar year and prioritize subscribers’ acquisition online.
Essentially, Apple TV+ will now reward successful talent. This is evident from the “cost majority” model of the streaming era, which became popular in the 2010s. This motivates people to pay a lot of money after purchasing the show in exchange for buying the backend of talent. In other words, the floors that are compensated for are improved, but the ceilings are lowered. As a result, a breakthrough hit won't attract Friends– Producers and actors break even, but missing out won't let them hold their schoolbags. This new transition reflects not only Apple’s growing financial pragmatism, but also a wider industry recalibration.
Apple's services include Apple TV+, Apple Music, Apple Arcade, Apple Fitness+ and Icloud+, which brought nearly $100 billion in sales last year. Apple TV+ is still a small piece (Apple Music and iCloud+ drive a lot of service revenue), but “you hope this will increase the overall brand experience, but there isn’t going to be more and more, but there isn’t a huge gap in resources and investment, either.” explain Recently in a research report.
Challenge: Apple TV+ It is said that Losing more than $1 billion per year is also a need to justify its position in Apple's large-scale service strategy. Misleading observers like to hit back, for Apple, money is not a market capitalization of over $3 trillion, and Apple TV+ doesn't need to make money. But no company, no matter how wealthy and successful, will burn billions of dollars a year without generating returns. Good companies generate value. That's the driving force behind this compensation change – cost management and strategic consistency. No longer efficient.
Return to traditional Hollywood economics
Talent and studios have traditionally aligned their interests to share risks and rewards. Believe it or not, but it is rare to dump a truck into some creative bank account Produce the best results.
Apple's Three Meter System – Acquisition, Engagement and Cost-Efficiency – creates consistent incentives. Everyone involved is motivated to provide the best product, especially on the stream reward system previously negotiated by the Association of Writers Associations. This model attracts certain talent segments that prefer rising participation and guarantee a minimum of stakes. For some people, the difference between wealth and wealth.
“Perform better, the higher the season, the higher the salary per point – in the top three performances in Season 5 or beyond, the highest performance per point is $350,000,” “There is a 35-point cap, and $12 million in the north.”
Such a conversion could help strengthen Apple's competitive position in talent acquisition, especially when the bidding war breaks out. A key question is whether Apple has slightly moved away from its insistence on quality programming for brand safety and has shifted more to the wide range of attractive content in the middle. Ribbons have delivered commercially successful broadcast styles, e.g. Ted Lasso and hijack, But it turns out that there is no desire to fully accept sitcoms and programs that drive engagement.
“The content of Apple TV+ is good, but content without a real distribution model is like closure of the best wine in a cellar,” Jarie Bolander, general manager and managing partner at marketing agency decision advisor, told Observer. “While competitors like Netflix and Prime are expanding with flexible pricing, ad-supported tiers and global bundling, Apple is still seeing streaming as a prestigious product (limited to Apple’s ecosystem only). This may be consistent with their brand, but not with their brand, but it’s not with how people work with the media today.”
What is the whole industry
Netflix It is said that Last year it was considered a similar backend deal, although there were no specific changes publicly. The industry usually follows Netflix's lead, although Apple's proactive moves show that streaming executives have finally done the bottom line that suits them best. Imitating competition is not a successful sustainable long-term strategy.
More importantly, this is another example of streaming’s ever subversive practices increasingly being discarded in more traditional ways. Streaming once promised to release through a rave release while avoiding professional sports and being completely isolated. Now, nearly every major streamer offers weekly programming within the creative scope, pursuing sports rights, promoting advertising support layers, and often bundled on other platforms and services. A new wave of change will surely be on the horizon, which will reshape the streaming business again.
The industry has gone from maturing results to sustainable profitability. Apple urgently needs to develop its video subscription service, both as a corporate and cultural destination. For every major streamer, doing so integratively means increasingly borrowing traditional media practices. Apple TV+ shows the ability to change strategies, which is a great first step.
