The financial relationship between content creators and Netflix is primarily governed by licensing agreements. Netflix generally pays a fee for the right to stream a show for a defined period. This model differs significantly from traditional television, where revenue is derived from advertising or syndication.
This approach offers content creators upfront financial security and eliminates the risks associated with viewership fluctuations. However, it also means foregoing potential long-term profits from syndication or advertising revenue that the shows might have generated on other platforms. The historical context involves a shift from content acquisition to original content production, impacting how these deals are structured and valued.
