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Four years ago, when Shonda Rhimes left her longtime home at ABC and transformed the TV industry with a nine-figure overall deal with Netflix, the move was considered an effort by the streaming giant to own more of its pricey original content.
Now, after delivering blockbuster Bridgerton, Netflix’s second pact with Rhimes is seen as an effort to create new revenue streams from the Grey’s Anatomy creator’s New Regency franchise and whatever other hits may be emerge in the prolific producer’s content pipeline at the streamer.
The July 8 deal extension will keep Rhimes at the streamer for five more years. Sources say Rhimes scored a “significant” up-front raise from the $100 million to $150 million initial pact she inked in 2017. Rhimes again has multiple bonuses built in that, in success, could elevate its value to the $300 million to $400 million territory of fellow uber-producers Ryan Murphy and Greg Berlanti, per sources.
Although she had a year remaining on her initial deal and had no plans of making Netflix a pitstop in her career, sources say Rhimes and her camp at ICM Partners (as well as attorney Michael Gendler) began negotiating earlier this year after Bridgerton quickly became Netflix’s most watched original series ever. The streamer, which does not reveal traditional viewership data, says more than 82 million member accounts watched at least two minutes of the series starring Regé-Jean Page. The romance drama based on the books by Julia Quinn launched last Christmas and, in a sign of its value to Netflix, has already been renewed through its fourth season. A Rhimes-penned spinoff is also in the works.
The deals for Rhimes, Berlanti (with Warner Bros. TV) and Murphy (also at Netflix) are all structured differently. Rhimes, as she did four years ago, bet on herself with bonuses built in that further compensate her for the number of shows she gets on the air, how long they each run and more. Berlanti’s 2018 deal extension saw the studio buy out the backend of The CW’s DC Comics shows like Arrow to net him a $400 million up-front payday, meaning he no longer has ownership points on specific shows. That deal also is loaded with incentives that see Berlanti — with a record 17 scripted shows on the air — score additional cash clauses when he hits a specific number of series. (Berlanti, who will be with Warners through 2024, also recently inked a separate film deal with Netflix.) It’s worth pointing out that Kenya Barris’ recent ViacomCBS deal gives him a seat at the table with a 33 percent equity stake in BET Studios after the Black-ish creator wasn’t interested in doing broadly commercial fare for Netflix, where he had a few years remaining on his own nine-figure deal.
While Berlanti has separate film and TV pacts, Rhimes’ new deal includes film, games, VR, branding and merchandising, live events and experiences. Although Rhimes started her career in features, sources close to the Scandal creator note it’s the merchandising and live events and experiences that are of particular interest to Netflix as the streamer plots other revenue opportunities to help offset its slowed subscriber growth. Netflix reported 208 million subscribers in the first quarter, missing its own expectations of 210 million.
The plan, sources say, is for Netflix to build on its hit franchises — like the immersive Stranger Things: The Experience in L.A and New York — with additional live events including the upcoming London-set Bridgerton ball scheduled to launch in November. Such events are done in participation with Netflix and the series creators, who help deliver the authenticity that can justify the pricey ticket fees. A Bridgerton video game and, after Netflix’s virtual Witcher Con on July 9, a Bridgerton fan convention could be on the table, too. Such events will also help keep fans engaged in the long stretches between seasons of the streamer’s hit shows. (Stranger Things, for example, last aired in July 2019 with the drive-through event providing diehard fans and franchise newcomers a fun opportunity during the height of the pandemic stateside.)
“Netflix is nascently exploring all this stuff and they understand that growing in areas that are non-competitive but additive on multiple levels — there’s revenue in marketing and creating shows/movies and events — is good for everybody,” notes one source familiar with the streamer’s strategy. “They’re going to spend time and money figuring that out. And they want to do that in partnership with great creators who have an acute understanding of these worlds.”
Meanwhile, all eyes now turn to Murphy, who while delivering a steady stream of content for Netflix, has yet to create the Bridgerton-like breakout under his $300 million deal. “Netflix wishes that Ryan did stuff that felt more special,” says one agency source. “He makes noise but none of the shows are sticky.” Meanwhile, industry insiders are already speculating if Netflix and Murphy will extend their relationship or if the Glee creator will reunite with Disney and his longtime friend and collaborator, Dana Walden — for whom he still has sticky successes in American Crime Story and American Horror Story. “He’s got a plan,” says another top lit source. “He’s shrewd.”
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