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Netflix is ​​making the switch in an increasingly competitive market

According to a Friday report in The Wall Street Journal, Netflix is ​​changing the way some stand-up comics get paid. Instead of buying a comedy special outright with a large flat fee, the streaming service basically leases it for a few years and then returns it to the comedian. A Netflix spokesperson told Marketplace this was just an “additional, alternative way for comedians to partner with Netflix in response to the current market.”

Back when it was rapidly growing its subscriber base, Netflix was lavishly spending on comics like Dave Chappelle and Ali Wong. Not to mention nine-figure deals for showrunners like Shonda Rhimes and Ryan Murphy. So does this model still work now that it’s losing subscribers?

When Netflix lured Rhimes out of the television world in 2017, the strategy wasn’t just about acquiring new hit dramas like Bridgerton.

It was about tricking you into thinking Netflix was synonymous with hit new dramas like Bridgerton.

“What Netflix did was really clever in terms of paying a bunch of showrunners and a bunch of talent to create original Netflix programming, which then built Netflix’s brand,” said Michael Smith, professor of marketing at Carnegie Melon.

Wall Street agreed. Netflix kept inking big-name talent, subscriptions kept coming in, you kept watching Stranger Things. Everyone was happy.

But if Netflix did a nine-figure Shonda Rhimes-type deal now, Wall Street would have some questions, said Nat Schindler, an analyst at Bank of America.

“I think Wall Street would be very skeptical about that. People are looking for them to actually lower their spending.”

For a while, Netflix cornered the prestige streaming TV market and was closely associated with the talent that created it.

But now it has stiff competition like Amazon Prime, Disney+, and Apple.

New York University’s Charles Schreger said serial dramas really are the be-all and end-all of streaming.

That means we’ll still see news of nine-figure deals for the people creating the popular ones.

“There is a lack, there is a lack,” he said. “They don’t make these people.”

Hmmm… wondering if this is a good time to dust off my spec script.

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