In 2023, Ampere Analysis expects global content expenditure to increase by just 2% year-on-year – the lowest growth in over a decade (excluding the Covid-driven slump of 2020). This is in stark contrast to 2022, during which global content spend is projected to have grown by 6% to US$238 billion, driven primarily by subscription video on-demand platforms. Despite some degree of caution in the second half of last year, SVOD services collectively spent over US$26 billion on original content in 2022.
Economic headwinds across the globe will put pressure on household spending and advertising investment, leading to companies implementing cost-saving measures and reducing content expenditure. For instance, following Netflix’s first global decline in subscribers, the service announced it would plateau its investment in content during 2023.
However, according to Ampere Analysis, the story is not uniform across media groups – some will continue to drive investment through 2023, while others will cut back. For example, Disney and newly formed Warner Bros. Discovery will overtake Comcast and its subsidiaries to become the leading investors in original content, with Disney reaching US$10.5 billion and Warner Bros. Discovery exceeding US$9.5 billion. Netflix will continue to lead dedicated SVOD spend, contributing over 25% of global SVOD original content investment.
Meanwhile, content investment by commercial and public broadcasters continues to linger below pre-pandemic levels, driven by declines in broadcast TV advertising revenue stemming from wider economic weakness and the ongoing shift of audiences to streaming platforms. In 2023, commercial broadcasters are expected to face a 3% decline in content investment.
“SVOD services will still see an increase in total content investment in 2023 but a lesser 8% year-on-year growth compared to 25% in 2022. Services will continue to focus on original content to compete in a crowded, cost-sensitive market, but we are already seeing a shift in content commissioning to incorporate a greater volume of cheaper unscripted formats,” said Hannah Walsh, Research Manager at Ampere Analysis and the author of the report.
SVOD services will still see an increase in total content investment in 2023 but a lesser 8% year-on-year growth compared to 25% in 2022.” Hannah Walsh Research Manager at Ampere Analysis