11 months ago • 2 mins
Analysts predicted this week that the era of speedy growth in TV content spending has already had its finale.
What does this mean?
So long, holiday binge-watching: it looks like your favorite streaming platforms and channels could start paring back the cash they’re splashing on lavish TV spectacles. That move would dramatically reverse the trend of the last ten years, when spending on original content almost doubled. But streaming companies are feeling the burn of economic slowdowns, especially in the form of slowing subscriber growth and towering losses. That’s why research group Ampere Analysis thinks that spending will grow just 8% across platforms like Netflix, Disney, and HBO – a whopper climbdown from 2022’s colossal 25% growth. And things are even worse in the already flailing world of traditional TV: there, rising costs and an advertising downturn could see old-school broadcasters cut spending by 3%.
Why should I care?
Zooming in: Netflix’s thrifty and thriving.
Make no mistake, Netflix is still the top dog in the streaming space. The colossus is keeping a closer eye on its wallet this year, sure, but the firm’s already getting more bang for its buck than its rivals. In fact, Morgan Stanley reckons that media companies like Disney and Paramount will spend twice as much on content per subscriber than young buck Netflix this year, with lower revenue from each subscriber to boot. Stats like that suggest that 2023 could be about to bring legacy media companies yet another bruising.
The bigger picture: Go big or go home.
Streaming platforms are doing everything in their power to stem the bleeding right now, hiking prices and slashing costs like there’s no tomorrow. But stunts like that only work for so long, and if the firms fail to turn a profit sooner or later, they’ll either have to quit altogether or – more likely – seek strength in numbers, even if that means teaming up with rivals.
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