New Delhi: Despite a year of uncertainty and production hiatuses due to the global pandemic, streaming platforms have set the global film and TV industry on a trajectory of accelerated growth with no imminent ceiling in sight. According to a latest assessment by London-based fin-tech platform, Purely Streamonomics, audience demand, production spending, and TV budgets reached all-time highs during the pandemic.
While the actual number of films that went into production dropped last year, and TV series experienced shooting delays, more cash than ever was committed to content, reflecting continually rising production budgets and greater rights-buying activity.
Production spending to top $250 billion by year-end
Based on current trend lines, Purely expects production spending to top $250 billion by year-end, and then keep rising beyond that, especially as media mergers: Warner Bros Discovery, Amazon-MGM and Televisa-Univision start to flex their combined muscles around the planet.
“What is remarkable about these record numbers is that the industry’s spending has yet to bump up against any natural ceiling. 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,” said Purely, founder and CEO, Wayne Marc Godfrey, “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 research shows that gross cash amount spent producing and licensing new entertainment content (excluding sports) soared by 16.4 per cent in 2020 to reach $220.2 billion, setting yet another milestone that is on track to be surpassed again this year. “But this is only the start of what’s to come. 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,” says the report by the London-based fin-tech platform.
Four emerging trends:
Deluge of new streaming platforms:
Since 2019, the number of global customers subscribing to streaming video platforms (has grown from 642 million to more than 1.1 billion, a 71 per cent leap that has been turbo-charged by months of enforced lockdowns at home. The pandemic not only drove rampant growth on existing platforms, it also accelerated the acceptance of powerful new global competitors including Disney Plus, Apple TV Plus, HBO Max, Peacock, Discovery Plus, Paramount Plus and Star. Joining these global platforms in the hunt for monthly customers are several regional Champions. Total number of subscribers is expected to reach at least 1.6 billion by 2025—representing about a fifth of the planet’s total projected population by then.
Content Spending Reaches a New High
As more platforms entered the streaming market and audience demand reached all-time highs in 2020, overall Film & TV production spending increased worldwide.
According to the research, The Walt Disney Co remains the biggest single spender on content, with a grossed-up total of $28.6 billion for 2020 – which is more than spend across the whole of Asia ($27.7 billion) last year, followed by recently formed Warner Bros. Discovery and Netflix. Once Amazon completes its own acquisition of MGM, that combined entity would rank as the fourth largest North American production. On that basis these top four companies alone, with combined spending of $75.3 billion, almost equates to the entire worldwide spending outside of North America ($77.3)
Spending On Indie Content Surges
As much as Netflix and the five major Hollywood studios spend producing their own content, independently made and acquired content accounts for twice as much money globally. According to Purely Streamonomics’ global research, indie content spending jumped by 25.3 per cent year-on-year in 2020 and now accounts for 65.5 per cent of the world’s film and TV production activity.
Budgets Are Soaring for TV shows
As audiences continue to grow, and more competition enters the market, the stakes keep getting higher. In order to stay competitive, producers face pressure to up their production spending. As a result, budgets have risen in recent years, especially for TV shows. According to the research, average budgets across all new series in the US– scripted, unscripted, daytime and kids – was on the rise, up 16.5 per cent in 2020. The cost of introducing and monitoring COVID protocols in 2020 also added 20-30 per cent to production budgets.
The findings of the research were presented in the form of infographics by Purely Streamonomics and created by digital publisher Visual Capitalist. The data is based on SEC filings by U.S. media conglomerates and tech giants, as well as reports published by national film and TV data-gathering organisations around the world.