TDG: Netflix, Hulu & Amazon to Triple Original Content Spending

The “big three” SVOD players—Netflix, Hulu and Amazon Prime Video—are expected to shift an increasing percentage of their content budgets from licensed programming to originals, according to a new report published by The Diffusion Group (TDG).

“The big three SVOD players own 60 percent of TV streaming time,” said Brad Schlachter, TDG’s senior advisor and author of the new report. “And they are looking to maintain if not grow this share by creating compelling originals that serve both to attract new users and retain existing subscribers even as subscription rates increase.”

The firm predicts that by 2022, the amount invested in originals will triple to $10 billion annually. According to TDG’s original research, originals are “extremely important” in retaining subscribers. Among Netflix subs, 21 percent rank originals as “absolutely critical” in their decision to keep using Netflix, while 41 percent rank them as “very important.”

“The data is unequivocal,” commented Schlachter, “though it varies among the big three SVOD providers.”

“Of course, not all originals find an audience or generate a huge buzz,” added Schlachter. “But when they do, it can change the fortunes of a company. Just look at what The Handmaid’s Tale did for Hulu or what House of Cards did for Netflix.”