How the Loss of Back-end Revenue Shattered Hollywood—And the Untapped Goldmines You're Missing
When the elevator to my studio opened some years back, two producers stepped off: Sarah Ball and Don Toht. They had a show and were looking for music. I’ll get into Chuggington on another episode, but I’m talking about the backend. This story is about what happened to an artist’s backend. Chuggington had a backend, and I did a backend deal. I didn’t know then that it was the end of deals like that. I was lucky to catch one, but everything was going to change.
I signed the contract to produce the soundtracks for the kids’ show Chuggington, but the entire entertainment industry was about to undergo a disruption that would destroy the rights of artists we had worked so hard to achieve. Why artists became the low-hanging fruit for Silicon Raiders is unknown to me. I guess, as always, artists were vulnerable, easy pickings.
Many people tell me to move on, surrender, and get used to it. And I’ve had many people tell me it’s opened the world of creativity to all, like high-end creative work was some elite group hidden behind walls that the masses can now breach. It’s positively Karl Marx, the way some apologists sound.
But it’s simpler than all that. It’s just about stuffing massive amounts of cash into a few pockets and using our work, and by our, I mean every citizen on the planet, to charge a gusher of wealth into a fabled gated community on top of the mountain. The fantasy the walls can now be breached is the opposite of the truth—the walls are higher than ever.
It’s free for all of content created for free and used to make money by the anointed ones.
The question is now: How do artists make money? If the landscape has changed, one thing has not. Great art is rare and valuable, and it belongs to the artist. Great art is not a training tool. It is not a commodity.
AI feeds on the past, but art feeds the future. And without new art, AI is just a snake-eating its tail.
In the entertainment industry, back-end revenue—the residual earnings from syndication, DVD sales, and international distribution—once provided a reliable source of income for creators, actors, and production teams alike. However, the streaming era has fundamentally altered this landscape. Platforms like Netflix, Hulu, and Disney+ have shifted business models from traditional back-end deals to flat, upfront payments, leaving many creatives wondering where future earnings will come from.
It leaves us wondering why: because they can? Because they can’t afford to pay for the content that drives their profit? Is it because global accounting is too complex? Nobody is watching Netflix because a bunch of executives work there. I think it’s simply #1—because they can.
Contracts like Chuggington have gone the way of the dinosaurs, but the entertainment industry is overlooking one critical perspective. With another decade of squeezed back-end, all the creatives will follow the dinosaurs into the tar pit.
This seismic shift has made pursuing back-end revenue more elusive than ever. While the model of getting paid once and hoping for residuals over the years has faded, you must ask—are there new opportunities and strategies to create a “back-end” in the new entertainment market? Here's a look at the forces driving the change and how content creators can innovate to regain financial sustainability.
What’s Causing the Entertainment Shift?
1. Streaming Over Syndication:
Traditional syndication models where shows were sold to networks globally, generating long-term revenue, have largely been replaced by streaming deals. These are often structured as flat rates with no ongoing financial benefit as content gets more views or is licensed internationally. A lot of the rich entertainment folks still hanging out in mansions (and a couple hanging out in prison) made their bones this way.
2. Shorter Lifespans of Content:
Our global ADD doesn’t help. Content cycles are shorter than they used to be. In the past, a hit TV show might have enjoyed years in syndication or DVD sales, but today, content has a faster turnover on streaming platforms.
3. Globalization:
With streaming services distributing content internationally from the get-go, the traditional "after-market" revenue from foreign distribution has diminished.
4. Algorithm-Driven Discoverability:
Streaming platforms rely on algorithms to push new content to viewers, meaning older content doesn't benefit from reruns or resurgence in popularity like it once did.
Finding New Back-End Opportunities
Writers, actors, and musicians—don’t jump off the cliff yet. While the old model of back-end revenue may be disappearing, there are creative ways to develop new streams of income in today's market:
1. Ownership of Intellectual Property:
Creators who own their content (TV series, film, or music) have more control over licensing deals and distribution. Negotiating to retain IP rights can lead to long-term earnings through merchandising, adaptations, or future distribution deals. Don’t sell the farm. Buy more feed, build a barn, and seed the field. Set up shop. Don’t sell, grow.
2. Diversifying Platforms:
It used to be you did a deal with Disney because Disney delivered the eyeballs. No more. It’s the audience that drives the market now more than ever. They are like a horde wanderin’ the digital mediascape and deciding what to watch. It’s as likely to be TikTok as NBC. Rather than depending solely on one distributor, creators can distribute content across multiple platforms—Netflix, Hulu, Disney+, Amazon Prime Video, HBO Max, Apple iTunes, Google Play, Vimeo, YouTube, Apple Podcast, Spotify, Quibi, Crckle Shudder. You get the idea that I’ve got a list that’s a mile long.
3. Direct Fan Engagement:
Oh, I love this one. One of the biggest shifts in modern entertainment is the ability for creators to engage directly with fans. I called it the line-out-the-door theory, and it’s as old as the hills, but in 2024, it’s on steroids.
The goal used to be to get a line of people to want to get into your event. You could judge where you were in the media by checking out the door. The longer the line, the better you were doing. It was a direct and meaningful milestone.
Now, platforms like Patreon, Substack, and social channels, even live exclusives, allow artists to engage with people directly. The line is in your living room. Please take off your shoes.
4. Sponsorships and Brand Partnerships:
Another oldie but goldie. This artist-brand relationship used to be verboten. It used to be a curse on your art if you were seen shaking hands with a brand—no more. Opportunities to partner with brands are stronger than ever.
Sponsorships, branded content, and product placements can fill the gap. You can work successfully outside traditional models by creating opportunities for brands to connect with your audience. But be careful. You can’t compromise your work, and you can’t tie chains around your spirit.
I spent time in the video game industry, so I was introduced to much of what I will talk about next. It’s a cursed idea right now and wholly misrepresented and misunderstood. The value is still undetermined, but as an artist and someone who signed an old-school contract that still pays my rent, I found a lot of what I will talk about next intriguing.
5. NFTs and Web3:
Evil-sounding stuff. Bandits and pirates. Gold-rush fever. All that. But at the heart of it is a hint of how artists might protect their work in a den of thieves.
The rise of blockchain technology presents a new frontier for back-end earnings.
As a producer, I might attach smart contracts to my work to offer solid returns to the creatives who work on my projects. The contracts are attached to the digital assets. I say digital assets, but what I mean in plain English is the music, the voices, the actors, performers, and singers have a new digital contract, which is a living contract, in that as the creative grows, as the show grows, the contract goes with it, use is tracked in perpetuity, accurately, precisely, and paid directly to the artist. I know it’s a little complicated to follow, but how cool would that be? Most working artists work under the assumption they do not receive 100% of the royalty they’re owed. It’s always been that way, but technology offers a different approach. I mean, the vision is there, but it’s still the Wild West. Who can trust it?
This is where it gets crazy, so I say not to sell your IP. Iconic imagery, quotes, or characters from your content can be turned into products. Lunch box bonanza, right? Only you make the lunch boxes yourself and pocket the change. License the IP. Hoist that motto on your front lawn. Do you know that guy, Mr. Wonderful, who always makes videos with a suit top and shorts? Well, he’s always saying that in Shark Tank. And he’s right. Elements for games, apps, and virtual environments—the metaverse!— can help sustain the creative work long after its initial release. Element licensing is the new syndication.
I wish I had more of those Chuggington trains in my back pocket. That show’s a gold mine of untapped IP. Just the music alone. Call me.
7. Crowdfunding!
Kind of another part of the line-out-the-door, right? Platforms like Patreon, Kickstarter and GoFundMe allow artists to engage with fans before completing their projects. This can provide upfront funding and establish a loyal fanbase invested in the project’s success. Form your tribe!
8. Audio!
Podcasts and audiobooks are growing in popularity, they provide creators with another way to recycle and monetize existing IP. Spinoff podcasts, audio adaptations of films or TV shows, or even deep dives into the creative process can attract new listeners and generate advertising or subscription revenue.
As of 2023, the global audiobook market is valued at approximately $8.26 billion. We’re looking at a 25% growth rate—not crazy, but healthy.
People like audio—they always have. I grew up with i. I didn’t own a TV until I was in my thirties. I have a passion for audio content, except I call it radio. Radio is a magic word.
The podcasting industry is reaching $6.78 billion in revenue by 2027. Chump change, but I’m with the chumps! Studio Jijiji is behind the chumps 100%. We live and breathe the spoken word, the singer reshaping the air, the guitar squealing into the dark night.
A New Reality
The entertainment industry constantly evolves, and the flattening of the backend revenue streams has forced artists to rethink their business models. Our corporate overlords are either clueless or unscrupulous—your choice. The new reality favors the hustler, and honestly, it’s a pain in the ass. The world was much simpler when you only had to get a pencil and paper and send the result to the wind.
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