The Duke and Duchess’ lucrative deal with the streaming giant is based on the production budget meaning the couple would pocket far less, according to the insider.
In 2020, the royal couple signed the deal worth a rumoured $100million (£83million).
They were asked to create original content including documentaries, movies, series and children’s programming.
But much of the money will go towards financing and paying for the production of the content.
The source told OK: “The deal is about production budgets. They were handed a few million dollars as an upfront development deal to build show concepts, pilots and pitches.
“The large-money deal only comes should the project get green-lit for a full run.
“Even then, the cut Harry and Meghan get from that deal personally as writers or executive producers could be less than 20 percent.”
It comes after Meghan’s animated series, Pearl, was quietly dropped by Netflix earlier this year.
Dropping several projects, including Markle’s, was part of strategic decisions on the production of animated series, the company said in a statement, without providing further details on its decision.
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The couple set up their production company Archewell Productions after stepping down from their working royal roles in 2020.
After stepping back from the Firm and moving to the US, the couple said in a statement: “Our lives, both independent of each other and as a couple, have allowed us to understand the power of the human spirit, of courage, resilience and the need for connection.
“Through our work with diverse communities and their environments, to shining a light on people and causes around the world, our focus will be on creating content that informs but also gives hope.
“As new parents, making inspirational family programming is also important to us, as is powerful storytelling through a truthful and relatable lens.”
But the couple’s profitable deals with the streaming giant have again been called into question after Netflix faces significant financial losses.
In April, Netflix revealed the company had lost hundreds of thousands of subscribers for the first drop in numbers in 10 years.
Daniela Elser, a royal expert, said: “The revelations immediately set off something of an earthquake from Wall Street to Los Angeles, with $75billion (£62.9) in value being wiped off the company’s value in 24 hours.
“In the course of that one earnings one call, not only did the streaming giant’s once-unassailable hold on the entertainment industry come unstuck but so too did the supposedly cashed-up future of Harry and Meghan, Duke and Duchess of Sussex, start to look much less certain.”