Ampere: Delays of Scripted Content to Last Well Into 2021

Producers of new scripted content — which typically spends an average of 11 months in production — will be battling against COVID-related delays well into 2021, far longer than their unscripted counterparts, according to a study from Ampere Analysis.

While producers of new unscripted content — which spends an average of just two months in production — have been able to adapt production to the new circumstances, already overcoming the worst period of delays, the same is not true for their scripted counterparts, according to the analysis.

Compensating for the lack of new high-quality scripted content, unscripted commissions increased from 66% in Q2 2019 to 72% in Q2 2020. Reality shows benefitted the most from this trend with 24% more titles commissioned in Q2 2020 than in Q2 2019.

The temporary stop in production also forced programmers to air older and less popular content to fill gaps, and some have turned to unscripted material to pad their schedules, according to Ampere.

While the proportion of new content aired dropped steadily over Q1 and Q2 2020, unscripted content has already made a rapid recovery, with new titles representing a higher proportion of primetime series than before COVID-19. However, the proportion of new scripted primetime shows has yet to return to pre-COVID levels.

Meanwhile, linear viewers in the U.S. and U.K. rated comedy, crime and thriller, sport, drama, and sci-fi and fantasy as their top five genres in Q1 and Q2 2020 — the same period that saw a considerable decrease in the proportion of new titles aired for all five genres.

“At the time of writing, almost half of all scripted commissions from the first half of 2019 had yet to be released, highlighting the long production periods for scripted shows and the impact of exposure to the COVID-linked production hiatus,” Ampere stated. “As a consequence, delays for scripted titles ordered in the same period in 2020 — also exposed to the production shutdown — will run well into 2021.”

The firm noted BBC’s “Staged,” one of the few scripted drama titles to be produced during lockdown, has already been licensed in multiple markets, illustrating demand for fresh new scripted shows. The series, starring David Tennant and Michael Sheen, follows actors whose play has been put on hold due to COVID-19, but whose director has persuaded them to continue rehearsing online.

While the production of some scripted genres such as drama and romance can often be expedited, the ability to shorten the often lengthy post-production process for genres such as action and adventure, sci-fi and fantasy, and horror — while maintaining output quality — will be key to limiting the onward impact of the pandemic, the research firm stated. Programmers that can air the highest volume of new scripted content, through commissions or acquisitions, in the next 12 months will win over consumers, the firm concluded.

“COVID-19 has hit the production of high-quality, scripted content most severely, and producers will be fighting delays well into 2021,” said Ampere analyst Olivia Deane. “Linear programmers know that viewers won’t accept poor quality content and repeats indefinitely, and they will lose consumers to both broadcast and on-demand competitors if they don’t address the situation fast.

“This is particularly problematic for channels that offer a high proportion of original scripted content. To maintain a competitive edge, they will need to adjust their acquisition models to compete in the race to broadcast new, high-quality content. This suggests a time to shine for independent studios with scripted projects already in the pipeline. However, with indies facing their own delays, it’s likely that supply will be outweighed by demand for the foreseeable future.”

Ampere Research: Pandemic Breaks Down Value of Theatrical Window

The pandemic has opened a door to breaking the theatrical window.

Research firm Ampere modeled various fictional scenarios of windowing during the pandemic, comparing the income post-COVID 19 to the income a title would have expected to have generated pre-2020.

“In a pre-COVID world, many of the scenarios would have offered only marginal gains (with significant risks) compared to a traditional release strategy,” according to Ampere. “However, in post-COVID markets, these options have started to look like viable opportunities.”

To assess the viability of a selection of alternative approaches, Ampere created a fictional mid-tier movie and modeled a series of windowing scenarios based on market trends, designing four scenarios of new windowing practices studios may adopt:

  • Scenario 1: Replace the first window theatrical distribution with premium video-on-demand (PVOD).
  • Scenario 2: Adopt strategies of using PVOD and theatrical windows sequentially, similar to Universal’s recent deal with AMC.
  • Scenario 3: Replace traditional windowing with a pure direct-to-consumer offering.
  • Scenario 4: Release films theatrically before making titles available exclusively on their own direct-to-consumer services.

The firm found the Universal deal with AMC (Scenario 2) was the most viable model for mid-tier releases. In Scenario 2, Ampere found that an accelerated PVOD window, such as the deal between Universal and AMC, is the most stable for exhibitors and studio groups, offering comparable returns for cinemas and increased revenue for the studio on mid- and lower-tier releases. However, top-tier titles are likely to be better monetized via traditional windowing models. The presence of theatrical releases still offers consumers the opportunity to view the movie with a cinema experience, meaning that this model doesn’t risk ‘lost’ transactions — unlike some of the other scenarios Ampere explored. The success of the model depends on negotiations with exhibitors and retailers, Ampere noted. Before agreeing to an earlier window, exhibitors will want to ensure that the mid-term future of the theatrical business is not being eroded to the extent that it will sideline them in future periods. Studios will need to work with digital retailers to ensure that films are adequately signposted as premium releases and are not unfavorably compared to catalogues of cheaper rentals, according to Ampere.

There is a significant appetite for home rental and purchase, with the domestic U.S. transactional video market at roughly 40% of theatrical’s size, according to Ampere. In principle, some titles could earn comparable amounts from PVOD as from theatrical distribution. However, for high-end blockbuster titles, which are typically able to obtain greater cuts of box office revenue, and international releases (in markets where the digital rental and retail market is less well developed), a pure PVOD approach would be far more risky. To account for this, split models would be more appropriate, with strategies tailored according to local importance of a title and the appetite for home rental and retail, according to Ampere.

Ampere’s research revealed that a theatrical to direct-to-consumer model is likely to be more feasible than a pure D2C model (bypassing theatrical entirely). However, both approaches are dependent on numerous influencing factors. Whether the model suits any given title is contingent on the retention of any new subscribers who signed up to watch the movie, and therefore the strategy is reliant on keeping both wider catalogue costs, and subscriber churn rates, down, according to Ampere.

“Looking forward, Ampere believes some of the major studios will adopt split strategies that can utilize PVOD while maintaining the benefits of theatrical distribution,” said Ampere analyst Peter Ingram in a statement. “Most of the studios have been experimenting with strategies during lockdown that completely eschew the theatrical window. However, despite the change we are expecting to the cinema market, theatrical remains one of the best revenue streams for titles throughout their life cycle. Not only do most people see the film in its theatrical window, but tickets are charged on an individual basis. By comparison, when a film is bought via PVOD, or watched via an SVOD service, it can be shared with friends and family under a single transaction.”

COVID-19 Hangover: 60% of Scripted Releases at Risk of Delay

Audiences and the industry can expect disruption to the supply and release of new content for more than a year as a result of production delays caused by COVID-19, according to a new report by Ampere Analysis.

The report finds 60% of scripted releases at risk of delay and a further 5% to 10% that may be lost entirely.

“Our analysis indicates that the unscripted market will more easily weather the current pandemic thanks to the production of non-location-based, and COVID-related, content,” according to Ampere. “However, the delay of summer ‘blockbusters’ like ‘The Bachelorette’ and ‘Love Island’ will have a negative impact on even the unscripted sector. We predict the scripted sector will take a far bigger hit: even if production is able to restart in June, underlying effects of the shutdown will be felt in the scripted TV market for the remainder of 2020, and well into 2021.”

In the second half of 2020, Ampere expects that the world’s top TV commissioners will release between 5% to 10% fewer new scripted titles on a monthly basis than previously predicted. The effect will last into the first half of 2021, and potentially longer.

Over half of scripted titles which would normally have released in the second half of 2020 are at risk of delays in release schedules due to the current production hiatus. Titles scheduled for release from June to August are likely to largely be in post-production, and Ampere expects delays will be more limited for this period.

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The number of scripted TV titles at risk of delay remains high for a year, with impact particularly intense at the traditional start of the broadcast season in the autumn. At this point, between 50% and 60% of scripted titles that would normally have been released in the period are at risk of delay by Ampere’s estimates. A further 5% to 10% of scripted titles expected to have been released during the autumn months are likely be lost entirely due to the current production shutdown, Ampere predicts. The proportion of scripted releases unaffected by the shutdown only rises above 40% in March 2021.

Compared to 2019, only 51% of scripted projects ordered during March through May 2019 have been released to date. With commissioning of scripted content down by 40% in the equivalent period of 2020, Ampere predicts the current lack of commissions will impact the supply of content well into 2021.

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“There is one certainty among the current uncertainty — that the COVID-19 pandemic will change the TV production industry far beyond the end of the lockdown,” Ampere senior analyst Fred Black said in a statement. “Initially, we expect delays to cause gaps in scripted TV release schedules, which broadcasters and streaming players will have to fill with other content. However, as delayed productions begin to fill out content gaps in later months, these gaps will begin to close. But this has further ramifications. The knock-on effect of delayed releases is a likely depression of the number of new commissions for some time after the shutdown ends, as commissioners look to fill schedules with delayed projects they have already invested in before signing off new ones.”

Unscripted content is set to bounce back quicker, according to Ampere. While a number of unscripted commissions expected over Q2 and Q3 2020 will be delayed, Ampere predicts release schedules will begin to return to normal by the autumn, with the percentage of titles unaffected rising to 71% by October. The biggest misses in the unscripted space are likely to be returning summer series that cannot go into production, such as reality stalwarts ‘Love Island’ and ‘The Bachelorette.’ Unscripted commissions have actually increased in comparison to the same period last year, partly to fill schedule gaps left by delayed or cancelled scripted series. However, a large proportion of these titles have been COVID-19-specific commissions. If this content is excluded, unscripted commissions have been down 27% since the beginning of March. Unlike scripted content, commissioners can typically order enough adapted unscripted content during lockdown to cover normal numbers of new unscripted releases, as well as help cover schedule gaps from delayed or cancelled scripted content.

Commissioners are currently creating a large number of extra unscripted projects which can be used to cover gaps in the schedule left by delayed titles or the missed scripted commissions,” said Black in a statement. “This number of extra commissions will begin to wane as the shutdown ends, with audience appetite for COVID-19-specific content already showing signs of falling.”

Research: SVOD Wakes Up to Reality

Reality was the second-most commissioned genre for linear services and third-most commissioned genre for video on-demand (VOD) services, according to research from Ampere Analysis on commissions, renewals and cancellations in 2019.

Data from Ampere indicates that Netflix has ramped up production of reality content compared with previous years. While in January 2018 Netflix had four original reality TV shows available, by year-end 2019, the number had grown eightfold to 32 original reality titles, with dating show “Love Is Blind” among its top-performing shows in Q1 2020.

Other findings include:

  • The most commissioned genre in the United Kingdom and the United States in 2019 was documentary, with one-off commissions a frequent occurrence. Documentary represented 31% of all first-run series ordered in 2019.
  • The second most commissioned and renewed genre was reality — at 14% of all commissions in 2019.
  • In total, 337 reality shows were commissioned in the United Kingdom and the United States.
  • Comedy closely followed reality and was the third-most commissioned and renewed genre. Almost one quarter (23%) of shows are yet to begin series production, reflecting the longer production period required for scripted series. First-run commissions accounted for 67% of all series announced in 2019 — this means shows being ordered for a first season, including limited series.
  • Most renewals were reality (24%), with comedy (17%) and documentary (17%) following closely behind.

Linear versus VOD findings include:

  • Renewals in 2019 are skewed towards linear commissions, with linear series representing 85% of all U.K. and U.S. renewals in 2019.
  • High-profile unscripted linear renewals included 19th and 20th season order for MTV’s U.K. Reality series “Geordie Shore,” and a 17th season order for NBC’s music competition show “The Voice.”
  • In 2019, linear channels cancelled 515 shows while VOD services cancelled 151. However, this is slightly skewed by the cancellations of series with a predetermined limit on the number of episodes. Once these shows are removed from the analysis, data shows that linear channels cancelled 178 shows, while VOD services cancelled 66.
  • 65% of linear renewals were unscripted series, in comparison with just 25% of all VOD renewals, with streamers preferring to focus on higher-budget, scripted fare.
  • Reality was relatively safe from cancellation on both linear and VOD platforms — only 8% of all cancellations were reality.

“While reality has been a staple for linear TV due to lower per-hour production costs and continued popularity among consumers, VOD services have been increasingly investing in the genre,” said Ampere analyst Olivia Deane in a statement. “With Netflix already commissioning two more seasons of top performing title ‘Love is Blind,’ reality looks like it will be the next battleground for linear and VOD services.”

Research: Half of U.S. Families Already Subscribe to Disney+

Half of U.S. Internet users with children under 10 in their household have already subscribed to Disney+ since its launch in the United States in November 2019, according to research from Ampere Analysis.

The service has also been successful in converting those ages 18 to 24, with more than four in 10 (41%) indicating that they had access to the service. For this group, the Marvel films and “The Mandalorian” were key.

Internet households with children currently make up 55% of all Disney+ subscribers in the United States, according to Ampere. One in five Disney+ subscribers are aged 18-24.

The latest research from Q1 2020 shows that Disney+ has been successful in converting consumers in both target groups, with 42% of all U.S. respondents with children under 18 and 41% of all those aged 18-24 already taking the service.

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The analysis shows that of individuals with access to Disney+ in the household, roughly half are currently using the service on a monthly basis.

“The latest figures from our Consumer media tracker indicate a very promising start for Disney+, with success in converting its two most important target audiences,” said Minal Modha, consumer research lead at Ampere Analysis, in a statement. “It will now be key for Disney to ensure it retains these customers with a mix of new Disney+ originals and new release movie titles. Furthermore, while there is still room for growth among both the two core demographic groups, it will be imperative for Disney+ in the longer term to broaden out its content offering to appeal to a wider audience.”

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Of the 56 new titles Disney+ currently has in production, the biggest volume at 19 are documentary, followed by children and family at 15.

Ampere Analysis’ consumer tracker polls Internet users in 22 markets worldwide every six months. The U.S. sample size in Q1 2020 is 4,000 consumers.

 

Ahead of Nov. 1 Launch, Studies Show High Awareness, Demand for Apple TV+ SVOD Service and Shows

Leading up to the highly anticipated debut of Apple TV+ Nov. 1, research firms are tracking high awareness for the SVOD service and original shows.

Parrot Analytics is tracking pre-release demand for the new streamer’s original series, including “See,” “For All Mankind,” “Dickinson” and “The Morning Show.” According to pre-release demand data captured leading Oct. 21-27, the company found that the upcoming Apple TV+ shows are well ahead of the audience demand average across all TV shows in the United States over the same time period.

“See” and “For All Mankind” were already attracting 11.7 and 11.1 times more demand than the average TV show in the United States ahead of launch, respectively, according to Parrot. “Dickinson” registered 3.3 times the demand average while “The Morning Show” managed 1.8 times the average in the United States during that time period.

Parrot also compared the pre-release U.S. and global demand for Apple TV+’s four top series to that of other hit streaming shows. For example, U.S. pre-release demand for the Apple TV+ series tracked well ahead of that of Hulu’s first season of “The Handmaid’s Tale” in the week leading up to their respective premieres. In its analysis, the company compared the average U.S. demand over the period Oct. 21-27, 2019, for the Apple TV+ series to “The Handmaid’s Tale” season one demand over its seven-day pre-premiere period April 17-23, 2017.

Findings include:

  • “See” was 897% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “For All Mankind” was 842% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “Dickinson” was 184% ahead of “The Handmaid’s Tale” in the lead-up to its premiere.
  • “The Morning Show” was 54% ahead of “The Handmaid’s Tale”in the lead-up to its premiere.

 

Internationally, the Apple TV+ shows don’t fare as well, according to Parrot research. Pre-release demand for “The Handmaid’s Tale” in most international markets pre-launch was well ahead of the pre-release demand for the Apple TV+ series on a per capita basis.

“Based on the demand that we are seeing, Apple TV+ promotion of the series in the U.S. has put them in a position to succeed domestically,” said Courtney Williams, head of partnerships, Parrot Analytics, in a statement. “However, they have to rapidly accelerate their international marketing if they hope to be a key player in the global streaming wars. The advantage of active and ongoing hardware penetration will be key domestically and should provide the necessary foundation to drive demand globally.”

Parrot also compared the pre-release demand for Apple TV+ originals over the seven-day period Oct. 21-27, 2019, with the pre-release demand for Netflix’s “The Umbrella Academy” (Feb. 5-11, 2019). Parrot found that “For All Mankind’s” pre-release demand is 54% ahead of the pre-release demand for “The Umbrella Academy” for the comparable lead-up period.

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Meanwhile, another study from Ampere Analysis found more than one in three (38%) U.S. respondents said they were aware of the Apple TV+ product, already higher than some peer group services — such as HBO Max — at 30%. Awareness among Apple device owners was 51% versus 25% for non-Apple device owners, and skewed towards a younger demographic. While younger Apple owners said they were the most likely to subscribe, their lack of interest in Apple TV+ original content presents a potential barrier to sign-ups, according to Ampere.

“The core target group for Apple TV+, in the short term at least, will be existing device owners aged 18-34,” said Minal Modha, consumer research lead at Ampere, in a statement. “Given the popularity of Apple devices in households, there’s already a large potential customer pool in the U.S. To sustain subscriber growth for TV+ in the longer term, Apple will want to move beyond its own device universe, and ensure it appeals to those outside its brand ecosystem.”

Apple’s decision to include the TV+ service with new device purchases appeals particularly to the younger consumer. Ampere found that 21% of Apple device owners are likely or highly likely to subscribe (compared to 13% of non-Apple owners). This rose to 29% of the 18-24 age group, and dropped to 14% of those 55-64, and 9% of those over 65.

Indicating a potential boost to Apple’s hardware business, 9% of respondents said they would buy a new Apple device to get a year’s free access to Apple TV+ and a further 9% said it would encourage them to replace their existing Apple device sooner. Ampere estimates that there are 81 million Apple device-owning households and if 10% were to replace their device six months earlier than planned because of TV+, it would generate an additional $400 million in net device margin for Apple. The same analysis for non-Apple customers suggests potential net device margin of nearly $120 million. Even under conservative device purchase and replacement assumptions, Apple will be able to offset significant sums of its U.S. content expenditure, according to Ampere.

The survey found that “The Morning Show,” a comedy drama series starring Jennifer Aniston, Reese Witherspoon and Steve Carell, would appeal to 35% of Apple customers (versus 25% of non-Apple device owners). “See,” a futuristic sci-fi drama starring Jason Mamoa, has a similar and strong appeal.

The survey highlighted lack of interest in Apple TV+ content as the biggest barrier to subscribing, alongside households saying that they already have enough SVOD services to keep them happy. Apple’s competitive price point of $4.99 was not a seen as a barrier.

“Apple has a different business model from the other new platform launches in that it is able to use Apple TV+ to incentivise and accelerate device replacement — and therefore generate larger cash flow through those sales to fund content spend,” Modha said in a statement. “While the research found that the main barrier to uptake of the service is a lack of interest in the content on offer, this is mainly due to Apple being new to the original content space and consumers not knowing what to expect. As Apple TV+ begins to roll, we expect this barrier will be overcome.”

Local SVOD Players Challenging Netflix in Nordic Markets

The Nordic markets have among the highest uptake of streaming SVOD services in Europe, but local players are giving Netflix a run for its money, according to new research from Ampere Analysis.

Despite strong demand in the Nordic markets for streaming content, the average market share of Netflix in the region is just 49%. That compares to an average of 71% in the rest of Western Europe.

While smaller individually, local players such as Viaplay, TV2 Play, C More and the regional version of HBO account for the majority of streaming service contracts in the region. In every other Western European market except Germany, Italy and Spain, Netflix claims the majority of SVOD subscriptions.

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Nordic Noir (crime content originating in the Scandinavian countries) is a key export for local content producers, but there are early signs that local streaming players are starting to move beyond the genre, according to Ampere. Analysis of content currently in production or development (but not yet completed or aired) in the region, shows that 47% of all shows are crime or thriller, but streaming players are less focused on the genre than linear channel players. Although the local linear channels and broadcasters have far more shows in development than local streaming players (59 different shows versus 23 from streaming players), an even greater proportion are crime. More than half (52%) of all shows in production for linear channels are crime compared to just 39% for streaming players.

Of shows currently in production or development locally, the next biggest genre for streaming players is comedy (22% of shows in development). Linear players, however, are looking to historical drama for their next big hits (10% of shows in development).

“The Nordic countries are home to the most dynamic streaming TV markets in Europe and local players have had to deal with a rapid transition of TV viewers to streaming services,” said Ampere analyst Elinor Clark in a statement. “Content is now the key battleground and, while Nordic Noir has served the region well, there is indication that local players will now look to develop comedy and period drama as the next big push.”