Laughs don’t pay as much as they used to at Netflix

Checks for comedy specials at Netflix are shrinking.

Why it matters: The streaming giant is in the midst of a transformation to make itself both leaner and more reliant on ad dollars when it eventually rolls out ad-supported options.

Details: Compared to previous lump-sum payments that often reached as much as $1 million, Netflix has started licensing specials for about $100,000 a year, WSJ reports.

• Under the new payout structure, comedians have to front the costs for production, but after deals expire they can regain full control over their content, sources tell the WSJ.

Of note: Netflix isn’t totally abandoning deals that involve both creating and buying specials, and the biggest stars such as Chris Rock and Dave Chapelle can be paid tens of millions of dollars for a special.

The big picture: This new approach enables Netflix to continue to produce relatively inexpensive, straightforward content that is popular on its platform while reducing its overall content costs.