The gross cash spend on the global production and licensing of new content for streaming platforms reached a new high last year, rising by 16.4% in 2020 to reach $220.2bn, according to new research from UK-based firm Purely.
Amid this boom, The Walt Disney Company emerged as the biggest single global spender on content in 2020, with a gross total of $28.6bn last year, which is more than the $27.7bn spent across the whole of Asia in the same period.
The data comes from a new report titled An Industry Transformed from Purely Streamonomics, a new research and analytical service from Purely, which further suggests that this new milestone will likely be surpassed this year as well, with Purely anticipating a total spend of more than $250bn in 2021.
“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,” said Purely.
Hey, big spenders
The recent shock announcement that WarnerMedia and Discovery are to merge into one media giant puts the newly dubbed Warner Bros. Discovery hot on the heels of Disney, with a combined spending of $20.8bn that means Netflix has been pushed into third place on the Hollywood spending charts, with just $15.1bn last year.
Once Amazon completes its acquisition of MGM the resulting combined company is expected to hop into fourth place with a content spend of $11.8bn.
The report notes: “On that basis these top four companies alone, with combined spending of $76.3 billion, almost equates to the entire worldwide spending outside of North America ($77.3 billion).”
MENA booms, while Europe lags
Breaking down the growth down by region, the report says that production spend from companies based in North America, notably those above, has risen by 16.1%, which is in line with the overall figure, while there have also been dramatic uplifts from regional business.
For instance, spend in the smaller markets of Africa and the Middle East has climbed 46.3%, while Latin America is up 32.9% and Oceania spend has risen 32.5%. The report suggests that this is fuelled by rapidly growing local streamers such as Shahid VIP in the Middle East, which has recently committed to spending an additional $100m per year on original content.
European company spend, meanwhile, is currently less than a quarter of that in the US and Canada, rising by 11.8%. “As local streamers such as Viaplay in the Nordics and Movistar+ in Spain expand their offering, this figure would be expected to rise in Europe,” notes the report.
Indie spend sky-rockets
While the big figures seem tied to Netflix and the major Hollywood studios, the report adds that this “only tells part of the story.”
Purely reveals that twice as much money is spent around the globe co-financing and acquiring the rights to independently made feature films and television programming, with the research finding that indie content spending jumped by 25.3% year-on-year in 2020 and now accounts for 65.5% of the world’s film and TV production activity.
The research also showed that, in the US, average budgets across all new series – scripted, unscripted, daytime and kids – was on the rise, up 16.5% in 2020.
Purely suggests that the budget inflation has been caused by streamers and producers fighting for talent exclusivity and the hike in production costs required to deliver “lavish, glossy and impactful shows that really stand-out in the marketplace and act as subscription drivers to a platform” such as Disney+’s The Mandalorian or Wandavision.
“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,” commented Purely founder and CEO Wayne Marc Godfrey.
“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.”