IHS: Netflix, Amazon Outspend CBS, HBO and Turner on TV Programming

17 Oct, 2016 By: Erik Gruenwedel

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SVOD heavyweights spent $7.5 billion on licensing and original content

Netflix and Amazon Prime Video have well more than 100 million combined monthly subscribers. To satiate that viewing audience, the two subscription-streaming video pioneers spent $7.5 billion in 2015 licensing and creating TV programing — more than CBS, HBO and Turner Networks, according to new data from IHS Markit. 

Between 2013 and 2015, Netflix and Amazon more than doubled their annual expenditure on programming. In 2013, Amazon spent $1.22 billion; that jumped to $2.67 billion in 2015. In the same time, Netflix spending rose from $2.38 billion to $4.91 billion.

“The levels of investment we are seeing from Netflix and Amazon are only topped by Disney ($11.84 billion) and NBC ($10.27 billion),” Tim Westcott, senior principal analyst at IHS Technology, said in a statement.

Westcott said other SVOD players, including Hulu in the United States and China’s Youku Toudu, iQifyi and Tencent have exponentially increased investment in original programming and acquisitions.

There were 148 new scripted shows aired by basic cable networks in the U.S., up from 138 the year before and 96 in 2013, according to the IHS. Year-to-date, there have been 113 scripted basic cable shows, compared with 78 on the networks, 31 on premium cable and 57 online. To set these numbers in context: In 2012, there were three online scripted U.S. TV shows, which climbed to 20 in 2014, 41 in 2015.

“In what Netflix calls the era of internet TV, more and more consumers are watching content online, shaking the foundations of the traditional TV industry,” Westcott said. “However, it’s premature to declare that the era of linear TV is already over, and Netflix and Amazon have come hard on the heels of a boom in production of original drama and comedy by the likes of AMC and FX in the U.S."

U.S. dominates TV show production investment

In 2015, the U.S. represented 33% of worldwide expenditure on TV programming, with $43 billion invested across free-to-air, pay-TV and online, according to IHS. Western Europe invested $38.6 billion, or just under one third of the total. Notable regions included the United Kingdom with $10.7 billion, Germany ($7.3 billion), France ($6.6 billion) and Italy ($4.6 billion).

“China is now the second-largest market in the Asia Pacific region, with $8.4 billion invested last year,” Westcott said.

Japan is the largest with $9.8 billion, followed by South Korea ($2.6 billion), Australia and India — both on $2.4 billion. Leading Latin American markets are Mexico ($1.5 billion) and Brazil ($1.4 million). Canada invested $3.4 billion last year. Russia and Turkey were both around the $900 million mark.

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