Apple Losing Over $1 Billion a Year on Streaming Service

[u/MarvelsGrantMan136]

https://www.reuters.com/technology/apple-losing-over-1-billion-year-streaming-service-information-reports-2025-03-20/

[u/aidanpryde98]

They didnt want to pay royalties.

[u/flux8 → u/aidanpryde98]

Did they not own the show? This TV show ownership thing gets confusing for lay people.

[u/ksj → u/flux8]

They did, but they still have to pay royalties to the creators. The producers and directors and main actors all get residuals when people watch the show. If nobody can watch the show, they don’t have to pay those residuals.

[u/gambalore → u/ksj]

Streaming residuals under the old union contracts (before the most recent strikes) were structured in a way where the payouts were based on the size of the streaming service, not on the actual viewership. That had the unfortunate effect of incentivizing the streamers to take low-viewership shows off of their platforms, even if the residual payouts were pretty paltry. WB also pivoted to licensing some of the less popular series out to other services, like Tubi, to raise more money.

[u/CliffordMoreau → u/flux8]

There are like a dozen different types of residuals people in the industry can qualify for (syndication, cable, ads, discs, streaming, etc).

For the really popular shows, like Friends, which still has strong DVD sales to this day, can net each Friends main cast actor a solid mil yearly.

Streaming is more cutthroat, the residuals are worse and the method used to calculate payments is faulty on purpose.

When a show is riskier to make, the studio may forgo large up front payments to cast and crew in exchange for points (residuals).

Westworld was a gamble, and probably earns the cast and writers/directors/producers a pretty penny, which is only going to become a bigger number since the recent strike ensured that streaming residuals give bonuses to 'popular' shows.

[u/Cedric_T → u/aidanpryde98]

Are royalties paid per view or per period of time on streaming advice?

[u/Director_Squirtle → u/Cedric_T]

In the old days, royalties was based off a set payment, ie a writer could get like $1 for a rerun of an episode, now a with streaming, it’s changed so much, and since a lot of companies don’t disclose their numbers, except in cases of going massively viral, it’s hard to know.

[u/mvsr990 → u/Cedric_T]

For subscription services there's a complicated formula that no one understands.

I believe that's why so many companies are dumping content on ad supported services (like Tubi) instead - then they're only responsible for royalties as a percentage of what they're actually getting paid rather than a cut of the subscription service.