Disney and Warner Bros. Discovery are expected to lead the content spending race in 2023, even though the streaming industry at large is expected to cut back due to economic pressures, according to analysts.
The research firm anticipates Disney will reach $10.5 billion in original content spend this year, while WBD’s content investment will exceed $9.5 billion. But even with those companies making investments, analysts anticipates global content expenditure to increase by just 2% year-on-year in 2023 – compared to a 6% growth rate last year.
Meaning this year will likely see the slowest content spend growth in a decade – excluding the pandemic-driven content slump in 2020, said analysts. The firm added global economic headwinds will curb household spending and advertising investment, which in turn will lead media companies to implement more cost-saving measures.
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Both Disney and WBD are in the midst of refreshing their streaming strategy. Disney+ in December launched its first ad-supported tier, which comes with the same content catalog that’s offered on the premium plan. Content ranges from Disney classic movies to series franchises like “Star Wars” and “Marvel Cinematic Universe,” and Disney scored another content acquisition win in October with BBC’s “Doctor Who” series.
Whereas WBD is gearing up to combine its HBO Max and Discovery+ streaming services into one app, expected to launch this spring. In anticipation of the combined service, the company has been trimming down premium content on HBO Max. Last year, WBD halted production of some European-produced originals and subsequently cancelled a number of domestic HBO shows, such as “The Nevers” and “Westworld.”
Within spend on SVOD content alone, Ampere predicts Netflix will make up over a quarter of subscription-based original content worldwide in 2023. Netflix is particularly leaning into more international content to gain a wider distribution of viewers. For instance, the streamer is currently developing a reality game show based on its hit Korean drama “Squid Game.”
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Research analysts predicted SVOD services will see an 8% year-on-year increase in total content investment, but it will lag the 25% growth rate seen in 2022.
“Services will continue to focus on original content to compete in a crowded, cost-sensitive market, but we are already seeing a shift in content commissioning to incorporate a greater volume of cheaper unscripted formats,” Walsh stated.
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