Netflix has agreed to pay creatives in Germany additional royalties based on the success of its local series productions.
The performance-based royalties will be paid to talent working in front and behind the camera on German Netflix series. The payments will be in addition to wages covered by production companies and based on the number of streams made by the series on the platform.
The streaming giant signed the joint remuneration agreement with United Services Union (Verdi), Germany’s leading service sector union, and the German Federal Actors’ Assn. (BFFS).
It’s the first time that a streaming service in Germany has concluded an encompassing collective agreement, but Verdi is aiming to ink similar agreements with other streaming platforms in Germany.
The agreement is in line with the EU’s Directive on Copyright in the Digital Single Market, which aims to reduce the value gap between the profits made by internet platforms and content creators and guarantee that filmmakers, writers, composers, musicians and other creators are acknowledged, compensated and protected for their work.
The creatives involved in German Netflix original series that qualify for the royalties include directors, cinematographers, actors, editors, and make-up artists, as well as set, costume, and sound designers.
Describing it as “a milestone for the film and television industry,” Netflix said the deal ensured that creators and performers benefit financially from their collaboration with the streaming platform “by guaranteeing a fair and appropriate performance-based remuneration for the creatives.”
The agreement provides for success-based additional remuneration for each individual season of a series and a share of Netflix’s secondary exploitation revenues, which are paid as a total amount and then distributed to all entitled parties. The amount of the additional remuneration to be paid is based on the worldwide number of so-called “completers,” or households that have watched 90% of a series’ season.
More specifically, the fixed remuneration will be paid when the threshold of 10 million global completers is reached. If the threshold is reached several times, the amount is paid out just as often.
A payment is due even if the threshold is not reached within a specified period of time. In this case, a proportional share of the fixed amount corresponding to the number of completers reached is paid.
“Ensuring fair and appropriate remuneration is of central importance to us,” said Rachel C. Schumacher, Netflix’s senior counsel for international labor relations. “We believe it is a cornerstone of our relationship with artists and of a sustainable and trusting partnership with the German creative scene.”
Schumacher described success-based participation for artists as “groundbreaking” for the market.
“We are thrilled to be building partnerships with these associations and unions, as well as others in the community, as we work toward a future built on continued respect and trust,” Schumacher added. “We look forward to other creative associations joining the joint remuneration or concluding ongoing negotiations with us.”
Verdi national board member Christoph Schmitz said the deal represented “a clear and non-bureaucratic settlement of claims for significant additional remuneration for film creatives. The agreement with Netflix shows how creative people in cooperation with commercial streaming services can benefit from a well functioning copyright law. It is a lighthouse agreement with appropriate remuneration regulations for all film authors.”
Netflix has collaborated with some of Germany’s leading production companies on its German originals, including Wiedemann & Berg Television on “Dark”; Syrreal Entertainment on “Dogs of Berlin”; Komplizen Film on “Skylines”; and BTF on “How to Sell Drugs Online (Fast).”
The joint remuneration agreement adopted by Netflix in Germany is sure to have a positive impact in other EU countries, according to Verdi official Matthias von Fintel.
Similar agreements are expected to be signed in other EU member states as the Directive on Copyright in the Digital Single Market is implemented across the bloc.
Netflix recently signed a similar agreement in Sweden.
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