In “The Rip,” a movie making its debut on Netflix next Friday, Ben Affleck and Matt Damon lead an ensemble cast playing police officers dealing with a dead captain and some possible internal corruption. Loyalties are questioned. Guns are drawn. It’s not clear who’s on what side.
Mr. Affleck and Mr. Damon’s loyalties have been much more clear behind the scenes.
The pair and their company, Artists Equity, successfully pushed for a deal with Netflix that could have implications for an industry going through major changes.
Nearly all Netflix shows and movies pay the cast and crew only a set fee determined upfront, a sharp departure from how the industry used to do business. Traditional studios preferred to pay most members of their production teams an upfront salary, but some people were also eligible to collect back-end payments if a show or movie performed well. Other companies have followed in Netflix’s footsteps in ending any payments after a production’s release.
But under the contract Artists Equity reached with Netflix, all 1,200 people involved in the nearly $100 million production, whether Mr. Affleck or a production assistant, will get a one-time bonus if the show performs well on the streaming service.
“We wanted to institute fairness and address some of the real issues that are present and urgent for our business,” Mr. Affleck said in an interview. He said he and Mr. Damon formed Artists Equity in late 2022 with an investment from RedBird Capital for this very reason. “This deal is fundamental, philosophically, to the ideas we had in starting this company.”
The film lands on Netflix just a little over a month after the streaming giant shocked Hollywood with an $83 billion deal to buy the film and television assets of Warner Bros., one of the industry’s most venerated studios. The deal has left many in the entertainment business to wonder whether Netflix will demand contracts with all payments upfront or will somehow adapt to more conventional ways.
“The Rip” could provide some clues, said Josh Sloss, chief executive of Cinetic, an entertainment management and corporate advising firm.
“Maybe this deal,” he said, “is a precursor to the questions Netflix is going to have to answer and perhaps is a good-faith attempt to figure out the upside sharing model with the filmmakers.”
Netflix has long said it had no intention of changing how it pays talent. Bela Bajaria, the company’s chief content officer, said in an interview that Netflix’s model of paying more upfront for films than the industry usually had — essentially baking in some of a back-end bonus before filming even started — worked for the talent and the streaming giant.
“A lot of talent likes that a company takes the financial risk and supports their vision and makes a movie,” Ms. Bajaria said. “That’s why we’re not changing our model.”
Yet she added: “We are not dogmatic. We wanted to be in business with Matt and Ben. They are very entrepreneurial and always progressive and forward thinking about the business, and I think it’s really cool and interesting that they’ve created this company this way.”
For “The Rip,” according to Mr. Affleck, no member of the cast or crew received the upfront bonus. Instead the bonuses will be judged on the film’s performance over 90 days on Netflix and will be rated against other films on the service. The idea is that there could be a bigger potential payout for the whole crew.
“Everybody who’s in this movie, from top to bottom, or worked on the crew, will be bonused according to metrics which we’ve already defined and they’ve shared with us,” he said. Mr. Affleck declined to share what those performance metrics were, but said a movie could reach different levels. The top one, he said — the “grand slam” — would require viewership similar to that of “KPop Demon Hunters,” which, with 325 million views by August, is the most watched movie on the service. (He said he had no expectation that “The Rip” would hit that.)
Mr. Affleck said he and Ted Sarandos, Netflix’s co-chief executive, first got to know each other during the writers’ and actors’ strikes of 2023. Artists Equity was just a few months old, and Mr. Affleck was pitching his model around town. He said Mr. Sarandos had seemed more amenable to it than his competitors.
“I thought this is clearly somebody who cares about this business, wants it to work, is doing very well and understands the value of filmmakers and performers and artists,” Mr. Affleck said.
The two companies first made a deal for “Animals,” an upcoming movie that Mr. Affleck both directed and starred in under Netflix’s traditional pay structure. Once Artists Equity and Netflix established a working relationship, Mr. Affleck said, he was able to persuade Netflix to look at the back-end bonus model for “The Rip.”
Mr. Affleck said he thought that the back-end bonuses could lead to better movies. As his calculus goes, you can motivate an entire set with a rousing speech, but motivating with the idea of future profits goes a lot further.
“It really came from my own experience, not just acting, but directing and producing movies and wanting to get everybody on the set on the same page,” he said.
“You’ve got to create a great environment, you’ve got to empower people, you’ve got to connect people to the process,” he said. “What I want to add to that is a comp structure that also reflects that, because the idea that you could expect other people not to care about their paycheck is crazy.”
Artists Equity is not the first to espouse smaller payments upfront and bigger payouts based on performance. Others have argued that it would produce higher-quality films.
“When the financial incentives of the people paying for the movies and TV shows are aligned with those of the creators, the overall system is much more cost-effective — and often the movies and TV shows are better,” the producer Jason Blum wrote in The New York Times in 2022.
Ms. Bajaria said she was not averse to making another movie this way, though she added that the company hadn’t done so since this deal was struck some years ago. That’s more a factor of what the town wants rather than what Netflix wants.
“We pay people in success or not,” Ms. Bajaria said. “People like the model we have.”
Mr. Affleck said he believed Artists Equity’s payment model was the way forward, because it could both reduce the cost of making movies and be more sustainable.
“I want it to work, because then I’m going to be able to make the argument in the future,” Mr. Affleck said. “Call the P.A. on the movie, call the gaffer, call the woman who was a project designer, and all of them will tell you, ‘I saw a meaningful amount of bonus money.’”
Nicole Sperling covers Hollywood and the streaming industry. She has been a reporter for more than two decades.
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