For all its quirks, the basic dealmaking infrastructure of the television industry worked so well for so long because it did some important things very right.
First, it aligned the incentives of the talent who made the shows with the studios that financed and produced them and the networks that aired them. The greater the success of a hit show like Friends or Lost for the network that first aired it, the more money its studio made both from that initial license and myriad other revenue sources, the more the creators and stars would share in that success via “backend” compensation and residuals.
