Streaming content spending exceeds $ 220 billion | C21Media | New
The gross amount of cash spent to produce and license new content for streaming platforms rose 16.4% in 2020 to $ 220.2 billion, according to a report by London-based fintech firm Purely.
The report, titled An Industry Transformed, was produced by Purely’s new research and analysis department, Streamonomics. He predicts the figure, which excludes sports content, will rise further in 2021 to $ 250 billion.
âAudience demand, content spending and TV budgets have all reached historic highs. [in 2020]. But that’s just the start of what’s to come, âPurely said.
âEven more spending growth is on the near-term horizon as a new wave of ad-supported platforms begins to take a stronger foothold in the world, alongside the subscription-funded services that have been driving the buzz. the streaming market so far. “
By region, production spending of North American-based companies grew 16.1% in 2020, while smaller markets in Africa and the Middle East, Latin America and Oceania saw a decline. growth of 46.3%, 32.9% and 32.5% respectively. This was fueled by fast growing local streamers like Shahid VIP in the Middle East.
European production spending has not kept pace, rising 11.8%, but that figure is expected to increase as local streaming platforms like Viaplay in the Nordic countries and Movistar + in Spain expand their offering.
The world’s largest consumer of content remains The Walt Disney Company, with a gross total of US $ 28.6 billion in 2020 on original series such as The Mandalorian. This figure is higher than spending in Asia as a whole, which stood at $ 27.7 billion last year.
The recent announcement of the merger between WarnerMedia and Discovery, whose combined content spending totaled US $ 20.8 billion in 2020, means that Netflix has now been propelled to third place on Hollywood’s spending charts with its spending of US $ 15.1 billion last year.
Once Amazon completes the MGM acquisition, the combined entity will rank fourth among North American production forces, with content spend of $ 11.8 billion.
The combined spending of US $ 76.3 billion by these four companies is almost equivalent to all global spending outside of North America at US $ 77.3 billion.
Elsewhere, twice as much money that Netflix and major Hollywood studios spend on original content is spent worldwide to co-finance and acquire the rights to independently produced feature films and television programs. According to the report, independent content spending jumped 25.3% year-over-year in 2020 and now accounts for 65.5% of global film and television production activity.
Research has also shown that in the United States, the average budgets for all new series in the scripted, unscripted, daytime, and children’s genres increased by 16.5% in 2020. Budget inflation was created. by streamers and producers fighting for exclusivity of talent, and a rise in production costs to deliver subscription pilots to shows that stand out.
The cost of setting up and monitoring Covid-19 protocols in 2020 also added 20-30% to production budgets. These costs look set to stick around for some time, the report says, but even if they do decrease, industry discussions about introducing “green production initiatives” could see an additional 5% to 10% over time. time.
Purely Founder and CEO Wayne Marc Godfrey said, âThis is the part of our research that maybe surprised me the most, because every producer I talk to tells me it’s constantly difficult. finance and commission shows and budgets are always under pressure. I think now is the time for them to ‘follow the money’ and take their biggest and best ideas – whether scripted or not – to the streamers.
âNow that the roles are well and truly reversed, a national public service broadcaster or local linear network should no longer be the primary focus of an ambitious production company.
âStreamers are also co-producing and acquiring more out-of-the-box content than ever before – so it’s not just about producing an ‘original’ for them anymore. This gives independents and distributors a range of options for their content and as those options evolve so do conversations about rights, with streamers more willing to make regional-only deals, for example.
âWhat’s remarkable about these record numbers is that industry spending has yet to hit a natural peak. Every year there is talk of the industry on the cusp of the ‘peak TV’ and yet it is clear from our own business relationships that the streaming of movies and TV shows is only now starting to reach a peak. escape speed.
âStreaming is not only displacing traditional sources of entertainment revenue such as pay TV and linear broadcasting, it is actually expanding the global video market. The big question then is whether there are enough good stories and talent to tell them, to continue to fuel this transformation.
A separate report by UK distributor Drive found that the number of VoD services launched in UK, US and EU territories increased by 32%, from 2,270 in 2017 to 3,015 in 2020 , with 745 new service launches in four years.
The Drive New Buyers report also found that the international revenue growth of UK production companies far exceeded that of domestic sources. In 2013, international sales were around 17% of total revenue at Â£ 500million (US $ 696.24million), while by the end of 2019 they had grown to 39% to 1. Â£ 6 billion, a total increase of 229% over six years. In the same period, domestic revenue rose from Â£ 2.2bn to Â£ 2.5bn, a growth of just 16%.
In numbers obtained at the start of the pandemic, factual and factual entertainment programming briefly accounted for 40% of all new streamer orders, while script production halted in the second quarter of 2020.
âUnsurprisingly, we have seen a steady increase in VoD growth over the past three years and to date this shows no signs of slowing down as our 2021 VoD revenue is already 50% above our numbers. 2020, and therefore on track to double by the end of the year, âDrive CEOs Lilla Hurst and Ben Barrett said in a statement.
‘Domestic growth has largely stagnated for the UK production sector and it is clear that many new buyers, many more of whom were able to get started during the pandemic itself, are offering UK producers, particularly in the factual space , more opportunities than ever to create vital international income. streams. “