Forecast: Content investment growth slumps in 2023
January 3, 2023
By Colin Mann
Ampere Analysis expects global content expenditure to increase by just 2 per cent year-on-year – the lowest growth in over a decade (excluding the pandemic slump of 2020). This is in stark contrast to 2022 during which global content spend is projected to have grown by 6 per cent to $238 billion (€230bn), driven primarily by SVoD platforms. Despite some degree of caution in the second half of 2022, SVoD services collectively spent over $26 billion on original content in 2022.
Economic headwinds across the globe will put pressure on household spending and advertising investment, leading companies to implement cost-saving measures and reduce content expenditure. For instance, following Netflix’s first global decline in subscribers, the service announced it would plateau its investment in content during 2023.
But the story isn’t uniform across media groups – some will continue to drive investment through 2023, while others will cut back.
In 2023, Disney and newly-formed Warner Bros Discovery will overtake Comcast and its subsidiaries to become the leading investors in original content – Disney reaching $10.5 billion and Warner Bros Discovery exceeding $9.5 billion. Netflix will continue to lead dedicated SVoD spend, contributing over 25 per cent of global SVoD original content investment.
Content investment by commercial and public broadcasters continues to linger below pre-pandemic levels, driven by declines in broadcast TV advertising revenue stemming from wider economic weakness and the ongoing shift of audiences to streaming platforms. In 2023, commercial broadcasters are expected to face a 3 per cent decline in content investment.
“SVoD services will still see an increase in total content investment in 2023 but a lesser 8 per cent year-on-year growth compared to 25 per cent in 2022,” commented Hannah Walsh, Research Manager at Ampere Analysis says. “Services will continue to focus on original content to compete in a crowded, cost-sensitive market, but we are already seeing a shift in content commissioning to incorporate a greater volume of cheaper unscripted formats.”