New report suggests Netflix, Hulu, and Amazon Prime Video will shift an increasing percentage of their content budgets from licensed content to originals.
Netflix, Hulu, and Amazon Prime Video will shift an increasing percentage of their content budgets from licensed content to originals. By 2022, the amount invested in originals will triple to $10 billion annually this according to a new report published by The Diffusion Group (TDG).
The Big-3 SVOD players own 60% of TV streaming time, noted Brad Schlachter, TDG senior advisor and author of the new report. And they are looking to maintain if not grow this share by creating compelling originals that serve both to attract new users and retain existing subscribers even as subscription rates increase.
Originals are extremely important to retaining subscribers, according to TDGs research.
Among Netflix subscribers, 21% rank originals as absolutely critical in their decision to keep using Netflix, while 41% rank them as very important.
Much like HBO decades ago, the Big-3 now have a much better understanding of the limits of licensed content and the benefits of a viable slate of originals. Among the success stories for originals are Hulu’s The Handmaids Tale and Netflix’s House of Cards.
The study showed that companies as diverse as Facebook and Apple are investing in original TV-quality programming to distribute directly to consumers. Disneys initiatives to launch its own D2C channels will make it a potent competitor in this space, the authors of the study stated.
‘Big-3 SVOD and the Original Content Arms Race Analysis & Forecasts’ features TDGs analysis of the forces driving both current and future content budgets among Netflix, Hulu, and Amazon Prime Video and breaks out licensed versus original content through 2022. It also examines the conditions that gave rise to the current arms race, as well as evaluates the growing slate of competitors entering (or soon to enter) this marketplace.
