Content investment growth set for slump
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Editor
| 04 January 2023
The content arms race that has held sway among major service providers over the recent past looks like coming to an abrupt end says a study from Ampere Analysis which predicts 2023 will see the slowest growth in content spend in a decade apart from 2020.
Ampere Content spenders 2023
The analyst calculates 2023 global content expenditure will increase by just 2% year-on-year, a figure in stark contrast to 2022 during which global content spend is projected to have grown by 6% to $238 billion, driven primarily by subscription video-on-demand (SVOD) platforms. this said Ampere was more impressive given that despite some degree of caution in the second half of the year, SVOD services collectively spent over $26 billion on original content in 2022.

Overall, Ampere believes that economic headwinds across the globe will put pressure on household spending and advertising investment, leading companies to implement cost-saving measures and reduce content expenditure. It noted that following Netflix’s first global decline in subscribers, the service announced it would plateau its investment in content during 2023.

Content investment by commercial and public broadcasters continues is expected to stay below pre-pandemic levels, driven by declines in broadcast TV advertising revenue stemming from wider economic weakness and the ongoing shift of audiences to streaming platforms. In 2023, commercial broadcasters are expected to face a 3% decline in content investment.

Yet such downward pressures would not be universal with some players actually continuing to drive investment through 2023, while others cut back. For example, Warner Bros. Discovery is projected to overtake Comcast to become the leading investors in original content. This will likely comprise Disney spending $10.5 billion and Warner Bros. Discovery exceeding $9.5 billion. Netflix will continue to lead dedicated SVOD spend, contributing over 25% of global SVOD original content investment.

“SVOD services will still see an increase in total content investment in 2023 but a lesser 8% year-on-year growth compared to 25% in 2022,” said Ampere Analysis research manager Hannah Walsh. “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.”