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BBC, Netflix & Amazon Content Spend
Whilst we all know the US streaming giants have deep pockets, it’s still pretty striking when you chart the huge increase in Netflix & Amazon’s content spend over the past 7 years relative to the BBC.
As well as highlighting the absurdity of the UK’s Culture Secretary trumpeting a freeze in the licence fee (which in real terms is a decrease), it prompts some interesting comparisons between two of the three leading SVOD services (Disney’s content spend is a bit harder to unpick).
Whilst now quite similar in their eye-watering levels of spend on content, Netflix and Amazon are in very different positions.
With a single string to its bow, Netflix is hoping it can grow its way to long-term profitability (whilst it is now finally on the brink of being cash-flow positive, its apparent historical profitability is misleading as it has amortised only a portion of its content each year).
With $33bn in annual profits, Amazon, meanwhile, can afford to continue treating streaming as a loss leader for Prime subscriptions.
Although it isn’t yet spending as big on content (*just* the $7bn pa), Apple is in a similar situation, with its content investment not urgently needing to wash its face ($200bn in the bank does help take the pressure off).
Whilst I don’t believe global content spend can continue to accelerate at the rate it has been over the last seven years, I do believe we’ve got another few years of growth whilst the major players duke it out. This means even more content vying for our attention and more pressure on publicity-funded players like the BBC.
Growth In content spend was one of my Media Trends for 2022 - read about all 10 trends.