Streaming television might attract the most creative and visionary new talent in the industry, but even in the streaming world, big budgets make a big difference. Netflix and Amazon are already among the biggest spenders in the streaming industry in terms of original content, and now a new analysis forecasts that the two streaming leaders’ original budgets will likely double within the next five years. What does this mean for the streaming industry overall?
For one, it means that subscribers will have a lot more reasons to allow those rarely-used monthly subscriptions to keep rolling along in the hopes that the next Stranger Things or The Man in the High Castle will be released. An analysis by television industry analyst group Ampere Analysis reports that Netflix and Amazon together will spend $20 billion a year on original content by 2023. A large portion of those massive budgets will likely be spent on creating new properties to lure in new customers and retain current ones.
Those budgets also mean that the streaming market will continue to draw top talent away from Hollywood and traditional broadcast or cable programming. In 2017, Amazon spent around $5 billion on original content while Netflix spent $6 billion. Next year, Netflix plans to bump that up to around $8 billion. Among major broadcasters and platforms, Netflix and Amazon trail in spending behind only CBS, NBC Universal, and Disney. Disney, meanwhile, spent $12 billion last year, and plans to launch its own potentially Netflix-killing streaming service soon.
As the streaming space continues to get more and more crowded, providers will have to keep ramping up their spending in order to keep new content flowing. While skeptics and Wall Street analysts have consistently doubted Netflix’s business model, the undisputed streaming leader continues to pick up subscribers even if not quite as quickly as predicted. Will Netflix and Amazon be able to keep spending to stay at the top of the streaming world?