The Show Might Not Go On

The Show Might Not Go On

about 1 year ago2 mins

Mentioned in story

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%.

Original content spending

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.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG