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Apple’s multimillion-dollar Christmas Carol deal is bad for the future of streaming

Apple is getting into the holiday spirit, but the deal it made for a star-studded Christmas Carol musical to premiere on its streaming service, Apple TV+, could leave other streaming services saying, “Bah, humbug!”

The tech company reportedly won an intense bidding war for a musical version of Charles Dickens’ holiday classic A Christmas Carol that will feature Will Ferrell and Ryan Reynolds as both stars and producers, topping the offers made by industry-leading streaming competitor Netflix, as well as traditional studios Warner Bros. Pictures and Paramount Pictures. The feature will be written and directed by Sean Anders and John Morris, who served the same roles on Ferrell’s Daddy’s Home films.

While the project itself is big news given all of the names involved, it’s the terms of the deal that could have lasting effects on the streaming video marketplace.

A numbers game

According to Variety, the price Apple paid for for the two actors’ services will be well above $60 million, a figure that dwarfed the numbers Netflix and other competitors were discussing and topped the offers on the table involving nearly every other facet of the project. The offer they made to Anders and Morris was reportedly of a similar can’t-refuse scale.

Will Ferrell
John Phillips/Getty Images

While the numbers involved in the deal are massive by industry standards and hint at the financial advantage Apple has — and is willing to wield — over other streaming services, it’s not entirely unheard of for streaming content creators to earn big paydays. Most creators involved with films earn a significant portion of revenue based on the movie’s performance in theaters, so contracts for streaming projects need to account for those profits upfront.

Still, the previously unheard-of numbers involved in the deal certainly up the ante when it comes to bringing premium projects to streaming services.

It’s in the details

What might be more troubling than the financial bar raised by Apple, however, are the arrangements that were also reported to be on the table in the deal for Ferrell and Reynolds’ Christmas Carol.

The report — which has not been confirmed by Apple, Ferrell, or Reynolds at this point — indicates that the pair also wanted to retain the rights to the original music created for the film, and for the rights to the film to revert back to the filmmakers after a set number of years. Both provisions are relatively unusual (to put it mildly) in Hollywood, and offer an indication of how the streaming wars are changing the very nature of dealmaking when it comes to movie and television projects.

Ryan Reynolds
Steven Ferdman/Getty Images

At this point, Netflix and Apple TV+ are seemingly locked in a competition to determine which streaming service can throw more money at filmmakers, with Amazon — which has made massive expenditures on projects such as the upcoming Lord of the Rings series — right there in the mix, too. Although Apple reportedly ended up retaining the music rights to the Christmas Carol musical, the fact that this was even on the table suggests that we’ll be seeing a lot more of this kind of provision — and the aforementioned shift in the film’s copyrights — when high-profile filmmakers negotiate with streaming studios.

That copyright provision, for example — which would have the rights to a project revert to the filmmakers after a period of time — could effectively mean that today’s Apple-exclusive film or show could be tomorrow’s Netflix-exclusive acquisition. That could mean trouble for audiences who subscribe to one service based on its exclusive, original content, only to see that content go to a competing service at some later point.

Follow the money

Of course, that’s not to say the financial numbers alone aren’t cause for concern.

With Apple, Netflix, and Amazon, as well as Hulu, pushing each other to invest more and more in exclusive content, the cost of that competition is likely to be passed on to subscribers. The more money that streaming services throw at projects like the Christmas Carol musical, the more those streaming subscription costs will need to increase to offset those expenses.

Given how early it is in Apple’s tenure as a streaming video provider — the Apple TV+ service doesn’t launch until November — it’s clear that the company wants to make a big splash. But with each deal setting a precedent for the next one, going all-in on a holiday comedy seems ill-advised at best.

Apple has deep pockets, certainly, but there’s reason to believe that it won’t be Apple’s pockets that get hit the hardest if the streaming war continues to escalate at this pace.

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