🎬 Apple changes how Hollywood pays talent

PLUS: Google is transforming modern filmmaking; Apple & Meta clashing in the hardware market

Today’s market performance 🏆️ 

S&P 500: +1.17% 📈
Nasdaq: +1.40% 📈
Dow 30: +0.88% 📈
Russell 2000: +1.14% 📈

TOP STORY
🎬 Apple might change how Hollywood pays talent

📸 Getty Images

Over the past few months, Apple has been cooking up a new way to compensate actors and filmmakers based on how well their films perform, rather than paying them all upfront before knowing whether the project is a hit.

Here are their proposed plans…

The talent for the Apple-produced shows would receive bonuses based on a points system.

The size of the bonuses will be based on three things:

  • 📈 The number of people who signed up for Apple TV+ to watch.

  • ⌛️ The amount of time people spend watching.

  • 🫰 The cost of the program relative to the size of its audience.

People with one of the top three shows could share up to $10.5 million for a season.

And… it makes a ton of sense for the streaming services. By encouraging filmmakers and actors to have skin in the game, they can ensure that they’ll be giving their best efforts and also rein in costs.

💬 Netflix and Amazon have also been developing a similar payment model based on performance.

So what’s the downside? 

For established actors and filmmakers, it's not such a sweet deal.

For example, with the traditional model that's currently in place, legendary director Christopher Nolan will reportedly earn more than $100M from directing "Oppenheimer.”

📸 Getty Images

Here’s how this works:

  • Nolan did a studio film (a different pay model than Apple), which means his upfront pay is guaranteed, PLUS he gets backend box office bonuses.

  • Streamers (e.g., Netflix, Prime Video, Disney), on the other hand, typically pay upfront with no backend—they essentially buy you and your film out.

  • A performance-based model, like the ones Netflix and Apple are considering, gives minimal upfront pay but offers the potential to make a ton off of bonuses if you get a ton of viewership.

But for someone like Nolan, whose films are already expected to perform well, the traditional model with guaranteed large upfront payments PLUS a cut of the box office is way more beneficial.

So, while up-and-coming filmmakers have a ton of upside with this new potential model, the greats are definitely not so happy.

I'm sure Nolan and others all have the same thing in mind: if it ain't broke, don’t fix it.

📈 Apple ($AAPL) is up 12.01% in the past month.

CREATOR ECONOMY
📹️ Google is transforming modern-day video creation

📸 Pocket-Lint

A day after OpenAI revealed a game-changing host of AI tools, Google, led by the fever dream that is founder Sergey Brin, revealed its own plans to change the world.

From a new-and-improved version of its own Siri to custom GPT-like chatbots, Google is making it known that it won’t just lie down and let Sam Altman rule the robot world.

💬 If you want the full list of Google Announcements, we wrote about it here.

While these new tools seem awesome, OpenAI is still firmly in the lead in terms of AI innovation… that everyone can agree on at this point.

But, there was one tool we think could be a game changer for Google: Veo.

  • Veo is Google's new AI video model, similar to OpenAI's “Sora.”

  • It can create extremely high-quality videos from text, images, and video prompts.

  • It will be able to create 1080p videos, understand terms like "timelapse" and "aerial shots," and offer various visual and cinematic styles for more precise video creation.

Now, it would definitely be interesting to see a film made with this technology, but the play we see here for Google is YouTube.

Google, which owns YouTube (if you didn’t know), can offer Veo directly to over 60 million YouTube creators to help them make better videos and has already announced plans to integrate some of Veo’s capabilities into YouTube Shorts.

With Veo, Google can tap into the $250 billion creator economy—yes, billion—giving creators essential tools to improve their videos and potentially propel the industry even further.

Now that would really be thinking 10 steps ahead.

📈 Google ($GOOG) is up 24.59% this year.

HARDWARE
⚔️ Apple and Meta clashing in the hardware market

📸 Road to VR

Ever since the Apple Vision Pro was released, it’s been a rollercoaster ride for the company.

A very embarrassing moment for the Cupertino giant, and it got worse.

Soon after the returns, Apple reluctantly realized that the device they’d been promoting and developing for years might not be the uber success they had originally thought it’d be.

So, Apple slashed its sales estimates for the device in half. 

Gosh, I wonder what Steve Jobs would've said to the Vision Pro team, wouldn’t wanna be in that room.

But then, an odd thing happened this week:

  • Reports emerged that Apple is gearing up to sell the Vision Pro outside the U.S. for the first time ever, starting next month. 

  • Staff from Germany, France, Australia, Japan, South Korea, Singapore, and China are already trained to effectively demonstrate the Vision Pro headset to customers.

Cause, as you can probably guess, it’s not such an intuitive device.

However, the reason for this expansion is pretty obvious: Apple wants to boost Vision Pro sales before they worsen.

Fingers crossed that this plan works for Apple.

💬 Some U.S. stores currently only sell a few Vision Pro units per week and resellers in places like Hong Kong are listing the gadget below its retail price.

And speaking of large gambles on hardware…

Meta is reportedly developing its own line of AI-powered earphones,  "Camerabuds,” which sound like their own version of Apple’s AirPods.

The earbuds will have built-in cameras capable of mapping a user's surroundings, identifying objects, and—because everyone seems to be doing this now—translating foreign languages.

It seems like a great complement to Meta’s Ray-Ban glasses, but they need to make sure people buy it first. 

  • As we mentioned, hardware is a very volatile market with no clear leader at this point.

  • Price, functionality, and practicality are major issues every company has had to try and overcome when trying to sell VR (virtual reality) and AR (augmented reality) products.

But despite the market’s cold reaction to wearable AI, Mark Zuckerberg and Tim Cook believe it’s still the future of tech.

I guess we’ll have to wait and see if they’re right.

📈 Apple ($APPL) is up 301.52% in the past 5 years, Meta ($META) is up 159.87%.