December 10, 2018
Netflix currently tops global spending on original and licensed content with more than $12 billion in 2018. Following the mergers of Comcast/Sky and Disney/Fox, two of every five dollars spent on content in the United States will be spent by these four companies alone, according to new data from Ampere Analysis.
On a global basis, the companies will account for one-in-five (20%) content dollars spent, with overall spending on content almost even between the two merged companies. By Ampere’s estimates, the combined projected content spend between the two is set reach $43 billion – with Disney/Fox spending $22 billion per year on originated and acquired content and Comcast/Sky spending $21 billion by the end of 2018. This is more than the combined outlay of the next ten largest content spenders in the U.S., including Netflix and Amazon Prime Video.
London-based Ampere attributed the recent media mergers – including AT&T and Time Warner – as a reaction to the increasing power of online video platforms.
“[Netflix] has repeatedly stated it will continue to increase its content budget,” Ampere said in a statement. “Prior to the mergers, Netflix was on course to catch and overtake the top Hollywood studios in terms of content spend. However, in light of the two new combined entities, Netflix would now be required to nearly triple its spend to achieve this.”
Ampere said Comcast/Sky and Disney/Fox help strengthen the pay-TV and studio groups’ positions in the global market, as well as adding protection against the rising strength of online video.
Indeed, each company controls an increasingly vast library of original content that can be exploited through proprietary and third-party direct-to-consumer offers. Disney has already indicated it will stop licensing content to Netflix in favor of its own direct to consumer offer.