Netflix transformed the entertainment landscape when it began releasing original content in 2013. Household names like Stranger Things, Ozark, and Squid Game catapulted the streaming platform to over 220 million subscribers globally.
Netflix now spends upwards of $17 billion annually developing top-tier films and series. That includes massive investments just for the initial script purchases. But exactly how much does Netflix pay to obtain those original scripts before greenlighting full production?
We’ll analyze the typical price range Netflix pays for scripts across different content types and formats. You’ll also learn what specific factors determine the final sale price and backend royalties.
Understanding the entertainment giant’s content budgets provides valuable insight for screenwriters and producers selling their work.
What Types of Content Does Netflix Buy?
Unlike traditional studios tied to theatrical releases, Netflix develops a vast range of scripted content across every genre imaginable. That includes documentaries, comedy specials, stand-up sets, and even reality shows.
But Netflix focuses predominantly on procuring full-length feature films, limited mini-series, and ongoing television shows. Those programs better attract new subscribers and keep them streaming more content.
Netflix divides its originals into three overarching categories:
- Netflix Productions – Content produced by Netflix’s internal teams and partners, funded completely by Netflix.
- Netflix Originals – Externally-produced content licensed exclusively by Netflix in its first release.
- Netflix Exclusives – Content aired elsewhere first but exclusive to Netflix in a particular region.
That wide range means the streaming platform buys everything from micro-budget indie scripts to massive blockbuster tentpoles. Established screenwriters can more easily command seven-figure script sales. But less seasoned scribes still see worthwhile five and six-figure purchases regularly.
What’s the Typical Range for Netflix Script Purchases?
Most major studios pay between $500,000 to $1 million for spec scripts with strong commercial prospects. Netflix blows those numbers out of the water in many cases.
The streaming network purchased an undisclosed record-setting amount for Knives Out 2 & 3, likely over $400 million. Netflix also paid $30 million just for the rights to sequels of Rian Johnson’s original 2019 film. That’s before spending over $200 million financing the actual Star Wars director’s production budget.
Reports indicated Netflix spent $205 million to acquire and produce The Gray Man. That included around $40 million upfront before former Marvel directors Anthony and Joe Russo began shooting the spy thriller.
Zack Snyder’s Rebel Moon is another spectacle tipped to have a $100+ million budget. The streaming service famously allowed Martin Scorsese over $175 million to make The Irishman. Hence why most industry estimates place Netflix’s average original film budget between $65-$200 million.
On the TV side, Netflix committed $450 million for two seasons of decline-of-civilization saga Station Eleven. The company also signed Shonda Rhimes to an overall $150 million multi-year development deal. Individual episodes for Rhimes’ flagship series Bridgerton reportedly cost around $13 million each.
At the other end of the scale, Netflix does purchase smaller indie films and niche programs overlooked by risk-averse studios. Horror sensation Hush only cost $1 million and became one of 2016’s most profitable releases. Netflix acquired worldwide rights for just $10 million.
More modest TV series like Heartstopper bring joy to dedicated fanbases despite smaller budgets. Netflix understands not every scripted show requires or deserves blockbuster financing.
What Factors Determine Netflix’s Script Purchase Prices?
Netflix evaluates dozens of elements when assessing script purchases and negotiating term deals. Most negotiations come down to the interplay of these four critical factors:
Screenwriter & Producer Reputation
Having an established writer, director, or producer attached instantly adds more zeroes to any script’s valuation. A-list talent brings built-in fanbases, award recognition, and elevated product expectations.
Netflix purchased multiple Chris Hemsworth vehicles, including Extraction and Spiderhead, attracted by his star power alone. The Russo Brothers earned tremendous trust after Captain America and Avengers to sell big-budget scripts to Netflix.
Even rising talents like the Duffer Brothers score multi-million contracts after Stranger Things’ global resonance. Netflix understands that talent drives subscribers, especially overseas lacking affinity for unknown American filmmakers.
Viewership & Profit Potential
Netflix employs extensive data analytics to predict potential viewership for greenlit projects. Scripts earning the production greenlight need to demonstrate suitable appeal for the platform’s 220+ million worldwide subscribers.
The streamer passed on expensive awards bait like The Trial of the Chicago 7 given limited international interest. Instead, Netflix focuses on stories with demonstrated global commercial viability to maximize subscriber watches.
Buying scripts with proven intellectual property (IP) or sequel potential also offers more residual value. Netflix eagerly outbid rivals for Knives Out 2 & 3 given the 2019 original’s $315 million box office. The streamer will recoup the $450 million+ investment over years as a franchise.
Production Costs
Escalating above-the-line salaries compels studios to slash script purchases and other development expenditures. Netflix also monitors soaring marketing, digital effects, and other BTL production costs when acquiring scripts.
Small-scale genre films like It Follows and Hush entail minimal budgets under $5 million. Netflix can purchase those scripts cheaply and yield substantial returns from modest streaming viewership.
But the company rightfully hesitates to pay $80 million for a mid-budget drama script requiring $100+ million to produce properly nowadays. Elevated production expenses force Netflix to be prudent when acquiring anything beyond proven IP blockbusters.
Streaming Competition
The intensifying streaming wars also drive up script prices as Netflix battles new rivals. Disney, Prime Video, HBO Max, and others bid aggressively against Netflix for projects boasting franchisability.
Netflix went all-in on Knives Out 2 & 3 to keep the property away from competitors, especially after Apple’s Greyhound success with the original’s director Rian Johnson. Quirky smash hits like Wednesday get shopped everywhere for maximum profit.
The streaming giant tries limiting costs where possible but understands expensive deals are essential to sustain market leadership. Letting rivals grab buzzworthy scripts could have devastating long-term effects on subscriber numbers.
Do Screenwriters Also Get Additional Royalties?
One lesser-known aspect of Netflix script deals is substantial bonus and royalty payments tied to certain performance metrics. Creators receive additional payouts beyond base sales prices as their content succeeds in the Netflix ecosystem:
Bonuses
Filmmakers often negotiate lucrative production bonuses once filming formally begins. Some agreements pay another 10-20% above initial script purchase prices upon delivering final cuts.
Bonuses also kick in upon reaching pre-agreed viewership thresholds, like $1 million more for 20 million streams globally. Hitting those targets indicates strong audience reactions that merit further investment.
Performance Royalties
Talent agents also secure their writer and director clients backend royalty percentages based on defined profit calculations. Royalties typically range between 20%-30% of net streaming revenues from Netflix originals.
Calculations account for deducting overall production budgets prior to disbursing designated profits. Writers might not see any royalties if projects dramatically underperform.
But showrunners and directors get hefty passive income from global smashes covering costs quickly. The Duffer Brothers likely receive 8-figure annual checks as Stranger Things remains a top Netflix original.
Why Does Netflix Invest So Heavily in Content?
Netflix allocating billions annually to acquire scripts and bankroll projects bewilders critics accustomed to Hollywood frugality. But the streamer embraces an entirely different business model centered around subscriber growth and retention.
Offering the best variety of prestige original content keeps current customers paying $15-20 per month. Global subscribers choosing between competing platforms go where the most quality programming exists.
Netflix willingly overpays to have Oscar-winning talents like Martin Scorsese and Guillermo Del Toro produce films for them exclusively. Viewers join specifically to watch acclaimed director’s epic crime sagas and fantasy spectacles now absent in theaters.
Taking ownership of long-running franchises with sequel potential also provides tremendous residual value. Netflix recoups large script investments over the years as subscriber royalties and additional seasons accumulate. Buying the IP rights to beloved shows removes them from rival platforms too.
Tips for Selling Your Scripts to Netflix
Not every screenwriter can command eight-figure paydays out of the gate like Rian Johnson or Chris Hemsworth. But Netflix (and other streamers) eagerly pay five to six figures for specs and pitches offering breakout potential.
Use these tips to make your work irresistible for a lucrative Netflix script deal:
Tailor Stories For Global Appeal
The best Netflix originals contain universal themes and multi-cultural appeal traversing borders. Consider how an American high school vampire series like First Kill finds equal acclaim in Africa, India, and South America.
Attach Notable Producers
Partnering with producers boasting previous Netflix credits bolsters sales odds tremendously. Their industry relationships and positive track records signal your project’s legitimacy to buyers.
Highlight Film Festival Prospects
Tout any award recognition or acceptance into prestigious film festivals like Sundance or Cannes. Netflix seeks the most decorated indie talent to enhance its critical reputation.
The Continuing Streaming Content Arms Race
Netflix reshaped Hollywood by offering talent and opportunities the major studios wouldn’t. Creators earn life-changing wealth from passion projects resonating globally on Netflix.
And with competitors like Prime Video and Apple TV+ now joining the fray, demand for original scripts will continue rising exponentially. Screenwriters can expect increasing competition and record sales from syndicators battling for exclusive content.
Just be sure to optimize scripts for international subcultures crucial to Netflix’s core strategy. Attaching recognizable producers and talent helps immensely too. Follow these tips to maximize your chances of catching Netflix’s attention – and securing that long-sought big break.
Frequently Asked Questions
How much does Netflix buy a script for?
Netflix typically pays between $500,000 to $3 million for scripts. Big franchise deals have exceeded $40 million just for sequel rights. The average Netflix original film budget is $65-$200 million.
Can I sell my script to Netflix?
Yes, Netflix does accept script submissions to their creative executives through online mechanisms. Having a reputable lit agent to submit greatly helps. Scripts need very strong commercial appeal and global potential to sell.
Does Netflix pay their writers well?
Yes, Netflix pays their top showrunners and screenwriters very well with lucrative 8-figure deals. Successful writers also earn backend royalties equating to tens of millions over time from hit shows.
How much does Netflix pay for content?
In 2021 alone Netflix spent over $17 billion on content, projecting to spend $18 billion in 2022. The average original Netflix film costs $65-$200 million. For TV, budgets range from under $1 million per episode to over $13 million for flagship shows.
How much does Netflix pay for African movies?
Netflix is actively looking for more African content, though pays modest five to six-figure amounts to acquire festival titles or commission micro-budget productions. Larger-scale African co-productions may secure 8-figure Netflix budgets.
How much can I sell my movie script for?
An amateur script might sell to streaming services for around $30,000 as a starting point. More commercial genre scripts tend to get low to mid-six-figure sales. Highly in-demand scripts from top screenwriters can be sold to Netflix from high figures into seven figures.
How do I become a Netflix script writer?
Becoming a Netflix writer involves building writing credits on reputable indie films or smaller shows first. Partnering with managers/agents who have existing Netflix relationships is key. Once established, you can pitch show ideas directly to Netflix creative execs.
How do I submit content to Netflix?
Netflix accepts script submissions online via third-party services like InkTip and Stage 32 that connect writers directly to key decision-makers. Going through a talent manager or entertainment lawyer is best for properly packaging pitches.
Where can I sell my movie script?
Scripts can potentially sell directly to Netflix, Amazon Studios, Hulu, Apple TV+ and other streamers actively seeking content. Filmmaking grants, indie producers, management companies, and film market events also provide sales avenues at certain budget levels.
