Streaming Content Spend Tops $220 Billion

Streamers spent $220.2 billion on producing and licensing content (excluding sports) last year, according to a new report from Purely Streamonomics, a 16.4 percent gain on 2019 numbers.

That expenditure is expected to top $250 billion this year, Purely projects. “Even more spending growth is on the short-term horizon as a new wave of ad-supported platforms start gaining a stronger foothold around the world, alongside the subscription-funded services that have been driving the streaming marketplace until now,” the research and analytical service from Purely continues.

Spending in North America was up 16.1 percent in 2020 to $149.3 billion. Spending in Europe was $32.6 billion, an 11.8 percent increase. Asian expenditure rose by 19.8 percent to $27.7 billion. In LatAm, spending grew by 32.9 percent to $4.2 billion. Spending in MEA was up 46.3 percent to $2.8 billion.

Purely says that Disney is the biggest spender on content, with a total of $28.6 billion in 2020—outpacing the streaming spend in all of Asia. Netflix’s spend was $15.1 billion and Amazon’s $11.8 billion. Purely also found that indie content spending jumped by 25.3 percent year-on-year in 2020 and now accounts for 65.5 percent of the world’s film and TV production activity.

Budgets for new shows in 2020 rose by 16.5 percent. The most expensive new shows included Disney+’s WandaVision and The Falcon and the Winter Soldier, costing about $25 million each.

“In TV and film, this budget inflation has largely been created by two main factors: streamers and producers fighting for talent exclusivity, especially with regard to contracting top names and locking them in for future seasons of a show, and the necessary hike in production costs in order to deliver lavish, glossy and impactful shows that really stand-out in the marketplace and act as subscription drivers to a platform.” Covid-19 safety protocols also contributed to increased costs, adding 20 percent to 30 percent to production budgets. Over time, green production initiatives could see an additional 5 percent to 10 percent added to budgets.

“This is the element of our research that perhaps surprised me the most as every producer I talk to tells me that it’s constantly challenging to get shows financed and commissioned and that budgets are always under pressure,” said Wayne Marc Godfrey, Purely’s founder and CEO. “I think the time has come for them to ‘follow the money’ and take their biggest and best ideas—whether scripted or unscripted—to the streamers. Now that the tables have well and truly turned, a domestic public service broadcaster or local linear network should no longer be the main goal for an ambitious production business.”

He continued, “The streamers are also co-producing and acquiring more ready-made content than ever before too—so it’s no longer just about producing an ‘original’ for them. This provides indies and distributors with a range of options for their content and as these options evolve, so are conversations around rights, with streamers more willing to enter into regional-only deals for example.”

Godfrey went on to note that there doesn’t appear to be a “natural ceiling” for content spend by the streamers. “Every year there is talk of the industry being on the cusp of ‘peak television’ and yet it is clear from our own business dealings that the streaming of films and TV shows is only now starting to reach escape velocity. Streaming is not just displacing traditional sources of entertainment revenue such as pay-TV and linear broadcasting, it is actually expanding the global marketplace for video. The big question then becomes whether there are enough good stories out there, and talents to tell them, to keep fueling this transformation.”