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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 timeframe, Netflix spending rose from $2.38 billion to $4.91 billion, according to the findings from World TV Production Report 2016, a forthcoming study by critical information, analytics and solutions source IHS Markit, which examines how TV programme producers are adapting to the era of internet TV.
“The levels of investment we are seeing from Netflix and Amazon are only topped by Disney ($11.84 billion) and NBC ($10.27 billion),” said Tim Westcott, senior principal analyst at IHS Technology.
Other online platforms such as Hulu in the US and China’s Youku Toudu, iQifyi and Tencent have also increased their investment in original programming and acquisitions.
“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 US.”
There were 148 new scripted shows aired by basic cable networks in the US, up from 138 the year before and 96 in 2013, according to the IHS Technology report. In 2016 so far, there have been 113 scripted basic cable shows, compared to 78 on the networks, 31 on premium cable, and 57 online. To set these numbers in context: in 2012, there were three online scripted US TV shows, that number rose to 20 in 2014, 41 in 2015.
“The primacy of the US in the worldwide programming market is clear,” Westcott said. “We estimate that in 2015, the US represented 33 per cent of worldwide expenditure on TV programming, with $43 billion invested across free-to-air, pay TV and online.”
“Amazon and Netflix, though they are US companies, are now commissioning for multiple territories, so we have treated them as global platforms.”
After the US, the mature Western European region is the next most important, investing $38.6 billion, or just under one third of the total. The biggest markets in Western Europe were the UK with $10.7 billion, Germany ($7.3 billion), France ($6.6 billion) and Italy ($4.6 billion).
“Notably, 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 in the region 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.