(Image credit: FreePik)
By Daniel Frankel
Source: www.nexttv.com, January 2023

Spending growth will be a third of the 6% it registered last year, according to Ampere Analysis

The steady, decade-long annual spending increases on original shows by the major streaming companies around the world is coming to an end.

According to London’s Ampere Analysis, spending on original programming will increase by only 2% in 2023 vs. the 6% year-over-year spike to $238 billion in 2022.

Spending growth has been driven by the still-emerging subscription streaming sector, which collectively spent $26 billon on content in 2022. But as these platforms moderate ambitious loss-leader strategies emphasizing quick subscriber/scale expansion, their spending will plateau, too.

Notably, Netflix — which accounts for a quarter of all SVOD content spending — said last year that it would plateau a content budget that reached $17 billion in 2022.

“SVOD services will still see an increase in total content investment in 2023, but a lesser 8% year-on-year growth compared to 25% in 2022,” said Hannah Walsh, research manager at Ampere Analysis. “Services will continue to focus on original content to compete in a crowded, cost-sensitive market, but we are already seeing a shift in content commissioning to incorporate a greater volume of cheaper unscripted formats.”

The ‘Tipping Point’

Beyond Netflix, all of the major U.S. subscription streaming services continue to experience heavy losses. Morgan Stanley predicts 2023 will be a “tipping point year” for at least some of them, during which spending will reach unsustainable levels.

“Streamers are raising prices and cutting costs,” Morgan Stanley analysts wrote in a note to clients. “If these moves do not deliver meaningful streaming profits, we see two options (not mutually exclusive): give up and/or consolidate.”

The pain, of course, is being felt even more acutely among linear program suppliers and distributors.

Broadcasters, for example, will collectively see a 3% cutback in original content spending in 2023, Ampere noted.

Two weeks ago, Ampere said that scripted series orders among U.S. programming suppliers were down 24% in the back half of 2022.

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!