An examination of the annual Netflix programming budget reveals it spent more on developing TV content in 2015 than CBS, HBO and Turner, as well as most nations, including Australia and South Korea, IHS Technology highlights in new market research. The same can be said for Amazon.
The market data provides a clear indication of just how significant OTT film and TV service providers have become amidst rapid evolution in the respective television and film industry and market landscapes.
Amazon, Netflix Programming Budget
Netflix and Amazon more than doubled the capital they invested in developing original TV programming annually between 2013 and 2015, according to IHS Technology’s forthcoming ¨World TV Production Report 2016.¨ Amazon’s jumped from $1.22 billion to $2.67 billion, while Netflix’s rose from $2.38 billion to $4.91 billion.
“The levels of investment we are seeing from Netflix and Amazon are only topped by Disney ($11.84 billion) and NBC ($10.27 billion),” IHS Technology Senior Principal Analyst Jim Westcott was quoted in a press release.
Other OTT Internet TV service providers are doing likewise. That includes Hulu in the U.S., as well as China’s Youku Toudu, iQifi and Tencent, the market research company points out.
The number of OTT video platform providers has been soaring amidst market segment growth and the ongoing shift to Internet-delivered services, a trend that was illustrated during Telecompetitor’s broadbandTV event this past June.
“In what Netflix calls the era of internet TV, more and more consumers are watching content online, shaking the foundations of the traditional TV industry,” Westcott said. “However, it’s premature to declare that the era of linear TV is already over, and Netflix and Amazon have come hard on the heels of a boom in production of original drama and comedy by the likes of AMC and FX in the US.”
U.S. Market for TV
Basic cable TV networks released 148 new shows in 2015, up from 138 in 2014 and 96 in 2013, according to IHS Technology’s count. Cable TV networks have released 113 new basic, 78 network, 31 premium and 57 online programs so far this year. That’s way up from just three online scripted US TV shows in 2012, 20 in 2014 and 41 last year.
The U.S. market for TV programming remains the largest and most vital worldwide, IHS Technology continues. Contributing to this, U.S.-based OTT TV service providers are commissioning new programs in multiple countries.
“The primacy of the US in the worldwide programming market is clear,” Westcott said. “We estimate that in 2015, the US represented 33 percent of worldwide expenditure on TV programming, with $43 billion invested across free-to-air, pay TV and online.”