Social media platforms such as Facebook, YouTube, Instagram and Snapchat are increasing forays into original video content to better compete against Netflix, Amazon Prime Video, Hulu and Disney+.
Since the middle of 2018, YouTube, Facebook and Snapchat have commissioned more than 200 digital originals, according to new data from Ampere Analysis. Short-form video platform Quibi is launching in 2020 with 80 scripted and unscripted titles in development.
With 58 shows in production, Ampere says Facebook Watch is the second largest commissioner of unscripted content globally after the BBC. Snapchat rivals HBO and National Geographic with 22 commissioned unscripted shows currently in production.
Despite the number of commissions, there still aren’t enough to offset the challenging economics of digital-first production, according to Ampere. Timing and the unpredictability of commissioning activity is a major concern for smaller digital studios, impacting cash flow and investment opportunity.
As a result, the London-based research firm says social media platforms have adopted hybrid business strategies, which include branded video, secondary rights sales influencer marketing, and direct control of ad sales against content distributed by via their own social media channels.
“Fast-paced technological developments and shifting consumer trends mean that diversification of business models and revenue streams is key to ensuring stability in a volatile marketplace,” analyst Henry Beckwith said in a statement.
Ampere’s analysis indicates that of current shows commissioned in the first half of 2019 for Facebook, YouTube, Snapchat and Quibi, less than 10% were being made in Europe. But the tide may be turning. Facebook has more recently begun to diversify. Its latest commissions are Western European-focused, with the U.K. and Germany emerging hubs for the social media group.
“Digital studios that have greater control over their IP can maximize income and margins, which can then be used to drive growth in other areas of the business,” Beckwith said.