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this post was submitted on 03 Dec 2023
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Piracy
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First, contracts in perpetuity rarely hold up. They always have an end, or at least regular off ramps that parties can take with no particular (legal) reason.
Second, contracts are complicated, and depend on countless other contracts that are in place. Netflix wants to stream a show? They have to negotiate a contract with the production companies (however many were involved). Each of those has contracts with the actors, writers, set designers, etc. They also negotiated some licensing from Sony records for the song used in S03E05, Paramount for the movie they imitated in season 2, Apple for all of the product placement (fun fact: the "bad guys" are never allowed to use Apple products), etc. Each of these had extensive terms and expiration dates, and have to be renegotiated when circumstances change. This is especially needed because....
Third - every contract is written in an attempt to screw the other parties out of as much income as possible. They say the most creative people in Hollywood aren't the actors or the writers, but the accountants. For instance, have you ever noticed how actors always get a percentage of gross instead of net? It's because on paper, nearly everything loses money to avoid paying on these contracts. Once the interest is established (i.e. the show is created and people like it, and we can say with confidence how much they're willing to pay for it), everyone now wants a bigger piece of the pie. You often see shows where the soundtrack changes in certain versions, because the record label wanted too much for the new license.
Yes, it's absolutely insane. But I don't really see any solutions that treat everyone fairly.
Your third point isn't as sound as the other two. Paying out on gross instead of net is more commonly done with movies. In fact, many tv series die around the season 3 mark because that's when conditions usually kick in on the regular casts contracts and they start making bank and the studios simply don't want to pay that much.
It actually sounds like you're agreeing with me- they cancel the show to avoid paying out. The contracts are written in a way that it can be used to screw them.
Season 6 is more common, since that's when contracts typically come up for renegotiation. Friends famously almost ended because the actors demanded what they were worth. The studios launched a smear campaign by "leaking" how overpaid the actors were.
TV shows do have a fundamental difference from most movies in that it's an ongoing operation. With movies, nearly everything has to be completed before release. There is more of an element of risk, since you don't know how popular it will actually be. Once it's been released, or you're 6 seasons into a show, that's pretty well known. Everyone wants their cut, and they know exactly the pie is.
Same end result, the money doesn't come from the gross though. Well, it does indirectly cos the studio has to get the money from somewhere, but their contracts usually aren't written in such a manner as they directly get the gross percentage straight to their bank account like a movie actor would (if movies ever actually made any money on the books). Which is all rather simplified, but I think it illustrates what I mean.
As for the contract length, yes the standard sign on time is 5yrs, but those contracts are renegotiated at the end of every season. There is a term for the conditions kicking in I referred to earlier but I've forgotten it and my google fu is failing me. Not every actors contract has them, but many do. To follow the friends example, kinda a moo point though, the point is that they get screwed if the studio can get away with it.