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Netflix and Amazon are now so big that they’re changing the way global TV shows are financed

The Crown
Kiss the ring.
By Ashley Rodriguez
Published Last updated This article is more than 2 years old.

Streaming services like Netflix and Amazon have already changed the rules for TV and film in Hollywood—they’ve boosted production, revived the market for older and out-of-production shows, and taken a different approach to deals than traditional TV networks.

Now that those services have expanded globally, they’re changing things around the world, too—including how TV shows are financed.

Barclays, one of the UK’s largest banks, announced yesterday that it’s launching a £100 million ($125 million) fund specifically to support TV companies in the UK that produce shows for subscription video services like Netflix and Amazon Video. It caters to the staggered way streaming services pay producers by allowing TV companies to borrow money over a longer periods of time.

According to Barclays, streaming services like Netflix spread out their payments to TV producers over months, or even years, to balance the high cost of content with the monthly revenue they earn from their subscribers. Traditional TV networks, on the other hand, usually pay producers and lenders as soon as the content is delivered.

The payment structure has made it difficult for smaller and medium-sized production companies to deal with rise of streaming, Barclays said. They can’t always find cash to pursue other projects while they wait to get paid. Instead of taking out loans against their overall assets, producers could sell their receivables for specific projects to the bank through the new fund. Other, private lenders already do this, according to the Telegraph.

The independent production company Roughcut Television, behind British sitcoms like Trollied and Cuckoo, was one of the first to take advantage of the new Barclays offering, the company said. The bank will buy out the receivable for what Netflix would pay Roughcut over time, as part of its multi-year streaming deal for Cuckoo, and give the production company access to upfront cash that it can put toward other projects.

“Another side benefit,” said Tim Sealey, Roughcut’s commercial director, in the Barclays statement, “is that it improves our relationship with the writers and artists as they get their royalties quicker, too.”

Netflix, which has found success with British shows like Happy Valley, Peaky Blinders, and River, has been ramping up production on British series. (The company plans to spend $6 billion on content and produce 1,000 hours of original programming overall this year.)

One of Netflix’s most high-profile and pricey original TV shows to date was the 2016 drama The Crown, produced the UK’s Left Bank Pictures. The service also picked up Channel 4’s Black Mirror for a third season, and revived the Channel 4 sitcom Lovesick as Scrotal Recall. It has agreements to co-produce shows with three major UK broadcasters including ITV, Channel 4, and BBC, Television Business International reported.

Amazon has also shown an interest in British TV. Its first global series, called The Grand Tour, stars the former presenters of BBC’s Top Gear. And the company has reportedly commissioned at least eight series in the UK. It also recruited a head of program commissioning based in London to boost production there.

Netflix and Amazon did not immediately respond to Quartz’s request for comment on the new fund.

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