Streaming hosts rewarded for spending on original content
Netflix’s seemingly unsustainable plan to spend big on original content is a trend among streaming giants. Research suggests it’s the best place to invest.
The risk of long-term losses may be lessening to reward customers. A study from PwC showed 76% of subscribers are satisfied with their current streaming services (h/t Cord Cutters News). Among those, 73% were satisfied with original content offerings.
Even before this study surfaced, it seemed all the fledgling Netflix competitors were keen to follow suit. Most significantly, though, is the breakdown of the new streaming hosts’ intended subscribers.
Apple TV+, Peacock & HBO Max follow Netflix’s lead
Per a Variety report on Monday, Peacock, NBC’s new streaming service launching in April, projects to spend $2 billion in the first two years. Much of that will be allocated to original programming.
Similar to HBO Max, which launches in May, Peacock doesn’t believe it’ll profit for five years. HBO Max has a target profit date of 2025, thanks to its own ambitious spending of $4 billion over three years.
Exclusive streaming deals for preexisting IPs has eaten into the wallets in a streaming bidding war. However, none of the streaming market’s newcomers are shy of spending a pretty penny on original content.
Disney+ banking on back catalog – for now
One notable exception to the streaming original content spending trend is Disney+. However, the Mouse House owns so many prestigious properties and had to spend a ton just to get them back after siphoning them off to other streamers before theirs went live.
However, one of Disney+’s few original series, Star Wars’ The Mandalorian. it’s the most in-demand TV show in the world right now, and has on its own delivered so many subscribers.
Back to the study: among those surveyed, 56% of prospective HBO Max subscribers, 48% of Apple TV+ subscribers and 59% of Disney+ subscribers cited original programming as a top motivating factor for their respective allegiances.
In other words, the demand for original content is extremely high. Netflix pioneered this movement. Amazon Prime Video followed suit and has the benefit of an overarching Prime membership to back it.
Disney as a whole spends the most money on content per year. ALthough Disney+ has Marvel movies, Pixar and its original studio animations to bank on now, expect their production of new projects to massively increase.
When will streaming scale back original content?
This seems almost like the housing bubble prior to 2008 — it’s going to pop eventually, right?
Disney+ is the only major streaming service limiting original program spending. With so many of the other hosts throwing so much new content at consumers, there’s the threat of oversaturation.
That’s where Disney can really set itself apart. Its innate name-brand recognition certainly helps the streamer’s future outlook, not to mention a purchasing power Netflix can’t rival.
Difficult as it is to predict the Streaming Wars’ outcome, though, what’s certain, at least from a subscriber satisfaction standpoint, is that original content spending is fully worth the cost.
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