Do streaming services pay royalties to actors?
Exploring how the modern entertainment economy impacts actor compensation
(By Carmichael Phillip)
(Photo: Cottonbro Studio | Pexels)
Understanding Traditional Royalties in Film and Television
Before the rise of streaming services like Netflix, Amazon Prime Video, and Hulu, actors traditionally received residual payments—commonly referred to as royalties—whenever a television show or movie they appeared in was re-aired or sold in another format (like DVD). These residuals were calculated based on union agreements, most notably those negotiated by SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists). The longer a show ran in syndication or the more times a movie aired on cable, the more an actor could potentially earn.
Take, for instance, the cast of the hit TV show Friends. Even years after the show ended, the main actors reportedly earned around $20 million annually in residuals due to syndication and DVD sales. Similarly, Jerry Seinfeld and Larry David have made hundreds of millions from reruns of Seinfeld. These examples illustrate how lucrative traditional royalties could be.
The Rise of Streaming and the Paradigm Shift
Streaming changed everything. Services like Netflix and Amazon Prime typically operate on a buyout model. Rather than paying ongoing royalties or residuals based on viewership or syndication, they pay a one-time licensing fee upfront. This means actors may receive a flat fee for their work, but they might not benefit financially from the continued success or long-term popularity of a show or movie.
One widely discussed example is the cast of Orange Is the New Black, one of Netflix’s early original hits. Despite the show’s popularity and massive viewership, several actors publicly stated that they received minimal compensation beyond their initial contracts. In a 2023 New Yorker exposé, actors described working second jobs despite being part of a globally popular show.
While some streaming platforms have begun to renegotiate terms to include residual payments, the amounts are often significantly lower than what would have been paid under traditional network contracts.
SAG-AFTRA’s Battle for Fair Compensation
In recent years, SAG-AFTRA has made considerable efforts to update residuals structures in the age of streaming. The union’s negotiations have resulted in “streaming residuals” for certain projects, particularly when they involve major platforms and high budgets.
Under current agreements, actors may receive residuals based on the number of subscribers a streaming service has or the number of years a project stays on the platform. While this is a step forward, many actors and industry professionals argue that these payments are far from equitable. For example, an actor in a hit streaming show might receive only a few hundred dollars annually in residuals, compared to the thousands they would have received under a traditional TV model.
The 2023 WGA (Writers Guild of America) and SAG-AFTRA strikes also spotlighted this issue. One of the major sticking points was the lack of transparency in streaming metrics. Without access to accurate viewership numbers, actors and writers cannot fairly negotiate compensation.
High-Profile Examples and Testimonies
Several big-name actors have spoken out about the streaming pay gap. In a now-famous tweet from 2020, actress Gabrielle Carteris (then president of SAG-AFTRA) stated: “An actor on a hit network show can buy a house with their residuals. An actor on a hit streaming show might be able to buy dinner.”
David Cross, who starred in Arrested Development—a show that transitioned from network television to Netflix—has discussed how his residual payments decreased dramatically once the show moved to a streaming platform.
The disparity is also evident in animated content. Voice actors for streaming shows often report lower compensation and limited residuals, despite shows achieving significant success on platforms like Disney+ or Netflix.
International Considerations and Global Markets
The royalty issue isn’t confined to the U.S. In markets like the U.K. and Canada, actors also face challenges when it comes to receiving fair compensation for streaming work. In some countries, local unions and regulatory bodies have stricter requirements for ongoing payments, but these rules often don’t apply to globally streamed content.
For example, in France, actors are entitled to “droit à rémunération proportionnelle,” or proportional remuneration rights. This means they must receive ongoing compensation based on usage. However, enforcing this across international platforms proves difficult.
Streaming platforms often license content globally, making it tricky to track viewership and calculate fair residuals in every region. This has led to calls for a more standardized international model for royalties in the digital age.
Streaming vs. Syndication: A Financial Comparison
Syndicated shows typically bring in more long-term income for actors. For example, The Office was originally broadcast on NBC but became a streaming juggernaut on platforms like Netflix and later Peacock. While actors initially received healthy residuals from syndication and DVD sales, their streaming residuals paled in comparison.
Steve Carell, who starred as Michael Scott, reportedly earned millions during the show’s syndication era. But newer cast members and guest stars on streaming-focused content often don’t have similar opportunities.
In contrast, newer shows made exclusively for streaming—such as Stranger Things or Bridgerton—may pay well upfront but provide minimal future earnings unless contracts specifically include negotiated residuals.
A Look to the Future: Are Things Changing?
There is hope for change. The growing transparency movement—pushed by both unions and outspoken actors—has led to increased pressure on streaming giants. New contracts being signed in 2024 and beyond are expected to feature stronger residual frameworks.
Moreover, as the competition among streaming services heats up, there’s a push to attract top talent by offering better long-term compensation packages. Some services are even experimenting with hybrid models that combine upfront payments with performance-based bonuses or tiered residual structures.
An encouraging development came in early 2025 when Apple TV+ agreed to a new SAG-AFTRA contract that includes subscriber-based residuals and annual performance bonuses for actors involved in its top 10 most-streamed shows.
Conclusion: Yes, But Not Equally
So, do streaming services pay royalties to actors? The answer is: yes—but not in the way traditional media did, and often not in a way that many consider fair. While residuals do exist in the streaming world, they are usually smaller, less consistent, and lack the transparency and longevity of those tied to traditional TV and film.
As the industry continues to evolve, ongoing negotiations and activism are vital to ensure that actors—especially those not in leading roles—receive equitable compensation for their work. Without such changes, the promise of streaming as a sustainable source of income for actors may remain unfulfilled.
Acting Magazine Newsletters
Never miss out on the best from Acting Magazine.