This Is How Netflix Could Lose High-Profile Comics From Releasing Their New Specials With Them

Netflix Inc NFLX has turned into more than just a streaming service for TV shows and movies. It has also been airing numerous comedy and other types of specials for its 220 million subscribers.

What Happened: The streaming giant is planning to change how it compensates comedians who have their shows on the channel.

In certain scenarios, Netflix will license new comedy specials for two years for roughly $200,000 instead of buying them outright, which Netflix has previously done for up to $1 million, per the Wall Street Journal.

Comedian Whitney Cummings, who released her newest special this summer with Netflix called "Jokes," reportedly struck a two-year deal with Netflix, the news outlet cited sources familiar with the agreement.

Also Read: Netflix Analyst Sees Advertising Opportunity, Streaming Dominance Driving Stock To $325

Why It Matters: Comedians will now have to pay for their own production costs under this new deal, as Netflix looks to keep its content spending in the range of $17 billion over the coming years.

As the agreement comes to an end, the artist will be able to receive full control of the rights to their material and be able to use it for future work, according to the Wall Street Journal.

With Netflix becoming more conscientious of its capital spending, comics such as Bryan Callen are going to Alphabet Inc.'s GOOGGOOGL subsidiary YouTube to avoid losing the rights to their specials, as well as leaving money off the table. "Flagrant" podcast host Andrew Schulz has turned to a company such as Moment House to privately release specials without having to cut out jokes, which streaming services may find too offensive.

Since Netflix is offering less for specials, comics may find it more difficult to cover production costs, causing high-profile comics to venture out and release specials on their own.

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