U.S. Poised for “Content Deficit” Amid Commissioning Downturn

Ampere Analysis is reporting that the rate of TV commissioning in the U.S. dropped significantly in the second half of last year and continues to remain low in 2023, with effects to be felt in early 2024.

The downturn is most significant for scripted content, the findings show, with scripted TV commissions in the last three quarters down by 24 percent year-on-year—with overall volumes even lower than during the Covid pandemic. However, Ampere believes that the resulting content deficit has created opportunities for those in a position to invest.

Low commissioning now will create a future content deficit, the firm explains, with the slowdown likely to show its effects in Q3 2023 and beyond.

Ampere outlines two possible scenarios: one is if commissioning rates recover soon, audiences will see between 5 percent and 7 percent fewer scripted releases each quarter between now and Q2 2024, when the effects will ease. In the second scenario, if commissioning continues at current levels, audiences will start to feel a much greater impact towards the end of this year, with 16 percent fewer releases expected in Q4 2023 and 20 percent fewer from Q2 2024 onward.

Fred Black, research manager at Ampere Analysis, commented: “Scripted commissions at flagship SVOD services are definitely feeling the impact of budget cuts—and the studios aren’t only cutting back at their streaming platforms, with pay-TV networks like TBS, FX, OWN, Freeform, Nickelodeon, Comedy Central, BET and AMC all reducing Scripted commissions by over 50 percent when comparing the past nine months with the previous period. There’s one big exception, however: Amazon, which is capitalizing on cutbacks made by rivals by increasing commissions of comedy and sci-fi and fantasy shows. Investing in scripted commissions now can pay off doubly for those willing to gamble, as the extra commissions will hit the market just as the output of original content from rivals drops to its lowest levels early next year.”

The decline of unscripted commissions was severe across SVOD and pay TV; however, SVOD services have been the biggest loser, with commissions down 33 percent over the last nine months versus the same period in the previous year, with 151 fewer titles commissioned. AVOD and FAST commissioners have provided a bright spot, with 83 unscripted commissions over the period, 6 percent of all unscripted activity in the U.S. in that time.

Black added: “While the commissioning cutbacks in unscripted content at the dominant pay-TV and SVOD platforms have been severe, there is a sense of balance being restored after a significant pandemic peak. Covid-19 saw unscripted commissions soar out of necessity due to production complications and then continue at a high level due to a surprisingly enthusiastic audience. What we’re seeing now is a course correction. Unscripted commissions in the U.S. were down 16 percent over the last three quarters compared to the previous year, but compare it to the same period in 2019 and early 2020, and the drop is only 1 percent. There’s also optimism in the growing number of commissions from AVOD and FAST platforms, showing that while some SVOD services may have over-leveraged on unscripted content, there are plenty of nascent players still investing.”