January 17, 2022
Streaming video aims to grow its subscriber bases in 2022 by focusing on markets beyond North America and Western Europe and diversifying content offering, according to new data from Ampere Analysis.
The London-based research firm contends that post-pandemic, with content production back up to full speed, a large quantity of new scripted shows and movies is expected in the next months and platforms seek to broaden their subscriber markets globally with localized content.
With services such as Paramount+, HBO Max, Peacock and Disney+ expanding international rollouts this year, Netflix at the end of 2021 was present in more than 33% of all Western European homes, and Amazon Prime in more than 20%. Hollywood studio streaming services are rushing to enter new markets to carve out market share. Disney+ is set to expand its presence in Europe, Middle East and Africa this summer, while HBO Max is eyeing Eastern Europe. Similarly, Paramount+ and Peacock via Comcast-owned Sky are working together to enter the Eastern European market.
Ampere’s consumer data shows that, particularly in large emerging markets, such as India, there is a high engagement with local TV shows and films. As a result, companies like Netflix and Amazon Prime are beginning to tap into local content production hubs to create content capable of attracting new customers and also maintaining their current subscriber bases. As SVOD platforms continue to diversify their content offerings, targeting different markets, Ampere expects more partnerships with local independent production companies.
Despite the growth in the number of these partnerships, the competition within the market has intensified, particularly between the platforms, whose need for exclusive original content has led to an increase in the volume of brand-new scripted shows being commissioned.
After the slowing of releasing over the last 18 months due to the pandemic, consumers can expect a large quantity of high-quality scripted shows landing in market over the course of the next 12 to 18 months, according to Ampere. There is already evidence of this in the U.S., where the volume of scripted shows released reached pre-pandemic levels for the first time in October 2021, crowding the weekly release schedules.
“Back in 2019, around two thirds of Netflix releases occurred on a Friday, ahead of weekend viewing,” Richard Cooper, research director at Ampere, said in a statement. “In 2021, the proportion of shows releasing on a Friday dropped to around 50%, with Wednesdays and Thursdays gaining in popularity. Now, with an average of three scripted shows releasing every week, Netflix will be increasingly dominant across the weekly schedule.”
As companies grow their original slates, Ampere expects content spend to continue the upward trajectory it has shown over the past few years, with global spending on acquired, original and sport content set to hit roughly $240 billion by the end of 2022, a 6% uplift compared to 2021.
Ampere suggests that streamers will be responsible for more than 20% of global content spending this year. Content investment from AVOD services, which are growing rapidly in reach across many markets, still remains relatively low as much of the content available on these platforms is licensed non-exclusively with linear channels or other streaming services. However, some AVOD services like The Roku Channel are investing in original content.
Sports has been a strong contributor to content spending growth in the past decade and Ampere expects that this industry will represent an important part of content spend expansion over the next five years. Although sports rights remain a local market, with some downward pressure on top-tier rights, as competitions become more visible overseas, there are more chances for international commercial growth, especially for European soccer.
Ampere expects that in 2022 the English Premier League will become the first major national competition that will generate more revenue from international TV deals than its domestic pacts.
The Premier League’s international revenue has more than tripled in the last decade and now represents around 47% of the total broadcast revenue. Domestic deals are expected to stay the same for another cycle until 2025, at just over $2 billion per season, whereas new international deals — such as the recent deal with NBCUniversal (Peacock) in the U.S., for a reported $450 million per season — are set to take the international TV revenue up to around $2.4 billion from 2022, according to Ampere, thus making up 54% of the total revenue generated from broadcasting fees this year.
In the video games sector, Ampere expects that Sony will outsell Microsoft 2-to-1 in 2022, with 18 million unit sales of PlayStation 5 consoles and 9 million unit sales of Xbox Series consoles, although the best-selling console in the market will be the Nintendo Switch family of devices, at 21 million units, driven by demand for the new Nintendo Switch OLED.
In addition, games content subscription services are increasingly important not just to console players, but also the wider gaming sector. These services, which offer a catalog of games for a monthly fee, will grow by 27% across North America and Europe in 2022 to reach $4.7 billion in consumer spending.